UPDATE. The following is probably also relevant here:
Bond Repayments: Motion [Private Members]
“That Dáil Éireann:
calls on the Government:
— to immediately lobby the European Central Bank for a one-off exemption from the rules of monetary financing, to allow the Central Bank of Ireland to destroy the €25 billion in sovereign bonds issued in February of this year, in lieu of the remaining promissory notes, plus the €3.06 billion bond also being held by the Central Bank of Ireland in payment for the 2012 promissory note; and
— to cease any and all interest payments currently being made on those bonds.”
- The first part of the debate on this motion is available here.
- UPDATE 2: The final part of the debate on the above motion is now available here.
37 replies on “Collins -v- The Minister for Finance & Ors”
Looks like “The Finance Minister” is enabled, by law, to give it all away well into the future. Methinks the line was ‘in the opinion of The Minister’ ….
Oh for the Swiss system of democracy ….. and a referendum on how the sovereign became a proxy_sov
The Sovereign is dead; long live the memory of The Sovereign!
Very clear. The pNs were lawful I provided the Minister acted reasonably and in the best interests of the public……but the court did not consider these tests as the plaintiff did not ask for same. So, did the Minister act reasonably in the best interests of the public if he did not have full or accurate info at the time….? Could a plaintiff prove that he didn’t? Could the Minister prove that he did (at the time)? It would be word against word, as there does not seem to be a written rationale from Minister Lenihan.
The MInister does not need a ‘rationale’ – his/her ‘opinion’ is sufficient. We discussed this on the blog years ago.
Ok, as there does not appear to be anything official written down to demonstrate Minister Lenihan’s “opinion” at the time.
So can a minister bypass the dail by going this route sayings it’s an emergency, in my opinion. Why do we have a dail full of baa baa backbenchers admittedly
Oh, and would it kill the judges to write a one page non binding explanatory memo. It’s our money, they are our judges. One page. Plain English. Too hard?
As the judgement points out in its opening paragraph;
“Apart from the intrinsic importance of the validity of this procedure, the plaintiff has also raised a series of constitutional questions in relation to the operation of the State’s finances many of which have heretofore received little or no judicial consideration.”
The question of the powers of the Dáil and the public representatives that make it up is the most significant example.
95. It may be recalled that Dáil Éireann is described by Article 15.1.2 as a House of Representatives of the people. Budgetary allocation and the raising of taxation are, therefore, not only integral features of the operation of the democratic nature of the State prescribed by Article 5, but represent key features of the representative duty of each Dáil Deputy. It is by these decisions that the Dáil (and the wider Oireachtas) shape the very society in which we live. It is for this reason that the individual members of the Dáil are directly answerable to the People in the electoral process provided for in Article 16.
96. Budgetary allocation is, therefore, a fundamental responsibility which Articles 5, 11, 17 and 28 of the Constitution cast upon the Dáil and its individual members. This constitutional responsibility may under no circumstances be abrogated, whether by statute, parliamentary practice or otherwise. It must be stressed in this regard that Article 28.4.1 requires that the Government “shall be responsible to Dáil Éireann”.
Unfortunately, it is plain to all that the constitutional responsibility has been abrogated. (Listen for the phrases regularly emanating from the mouths of ministers such as “I have allocated this sum or that sum” for a particular purpose, milking the announcement for maximum political advantage. Indeed, it is clear that in the minds of most TDs there is utter confusion as they see them selves as going to ministers seeking funds – and not without good reason – on behalf of their constituents rather than deciding on budgetary allocations and ensuring that ministers spend them correctly).
This is an exceptionally clear and useful judgement which should help redress the situation. Expecting any immediate dramatic change would however be Utopian.
back to March 2010 – on opinions herding elephants quietly …
Did you expect anything different? The alternative was chaos. It is disappointing as BL points out that some initial parameters have not evolved on this. The judges will conveniently claim that they are not the Legislature…but they obviously make legislation (law) all the time via interpretation. Fairly tame stuff here from them…but expected.
No. But alternative is/was not ‘chaos’ but solvency and a possible life for a certain generation. The Citizenry has been successfully ‘gamed’ and the blog’s leading spinner is ‘crowing’ …
Chaos has a certain order – not easy to fabricate real chaos.
Of course theres always the Supremes. They have history of overturning the Highs. Its like the panto
Oh yes you are (Mr Justice Higher)
Oh No your not (Ms Justice Supreme)
The Derivatives Death Star is still over Frankfurt …
“96. Budgetary allocation is, therefore, a fundamental responsibility which Articles 5, 11, 17 and 28 of the Constitution cast upon the Dáil and its individual members. This constitutional responsibility may under no circumstances be abrogated, whether by statute, parliamentary practice or otherwise. It must be stressed in this regard that Article 28.4.1 requires that the Government “shall be responsible to Dáil Éireann”. ”
It would appear this bit:
“This constitutional responsibility may under no circumstances be abrogated, whether by statute, parliamentary practice or otherwise”
…is now historical if a Fiscal Compact Treaty target is cited by government; viz:
“No provision of this Constitution invalidates laws enacted, acts done or measures adopted by the State that are necessitated by the obligations of the State under that Treaty”
Remember that one?
BTW, bet they can’t wait to invoke it to reduce former ministers’ and TDs’ pension “entitlements”…er…
the alternative was the non payment of the pay and rations of the public service and the unemployed (or part thereof). The 65% of the population not so dependent on the cheque in the post would have survived. Sorry I meant 50%…er no…45%…
If you read the Fiscal Treaty, it is clear that it binds the state to do certain things but nationally; to balance the books in effect. As this touched on core responsibilities of the Dáil, one must assume that the wording you refer to was inserted to ensure legal certainty. The treaty contains no obligations that I can see in the management of national budgetary procedures. It would never have been ratified by the countries involved if it did. (I would be of the view that it was unnecessary to insert the wording that you mention in the circumstances).
Draft of the German coalition agreement (courtesy the blog of a Green).
That seems, if I may say so, a touch patronising.
Of course it binds the state to do, or not do, as the case may be, certain things and meet certain targets. Of course, it is the state itself that takes those decisions (unless things get extremely bizarre at some point). The point is that the wording of the constitution amendment above allows such actions to be carried out, by the state itself, without them being open to the possibility of being held unconstitutional – provided they are deemed “necessary” to meet the FC obligations.
Whatever the draftsman or his advisors had in mind, what they wrote is what they wrote.
Not being a lawyer, I steer clear of definitive observations on legal texts, as you may have noted. How this can be construed as patronising escapes me.
If you can identify the “obligations” other than the general ones contained in the operative articles of the treaties, I would be glad to consider them.
OK, IMHO, patronising: “If you read the Fiscal Treaty…”
The “obligations” are general ones – like meeting deficit targets. In order to meet those obligations, governments will carry out specific acts, measures etc that they decide are “necessary” to meet those obligations.
It is those acts, measures etc that, the constitutional amendment says, cannot be found unconstitutional.
If they intended to amend the constitution so that no “general obligations” under the FC Treaty could be found unconstitutional, they didn’t word it that way.
I don’t know if we’re ready for the Portuguese world where the courts can overturn specific fiscal measures.
I do not know what they intended. The wording was simply borrowed from the first EU amendment to the Constitution (which applies to the Six-pack and the Two-pack). I am assuming that it was a political belt and braces approach (which the electorate approved 60% to 40%).
The obligations of the FC were in relation to debt and deficits. The obligations were:
– Balanced budget rule
– Debt brake rule
– Automatic correction mechanism
– Debt issuance co-ordination
– Embedding the Fiscal Compact rules into domestic law
So the clause you refer simply says the debt and deficit rules.
Implementing measures to meet those rules is separate and remains subject to the domestic laws and provisions. The Fiscal Compact does not require any specific measures; nor can any measure be ‘forced’ through on the basis that it is necessary to meet the rules in the Treaty. We were ‘forced’ to write the rules into national law but that is as far as obligations under the Treaty go. We can choose to meet them any which way we wish.
I’m sure that was the intention, however the drafting was loose.
“So the clause you refer simply says the debt and deficit rules”
No, it says what it says: “No provision of this Constitution invalidates laws enacted, acts done or measures adopted by the State that are necessitated by the obligations of the State under that Treaty”
ie, anything the government does which it finds it needs to to meet its obligations under the Treaty. viz:
– Debt brake rule
– Automatic correction mechanism, etc
See recent LPT drafting fkcup for the worth of reading the words sans assumptions.
The question I find interesting is who or when anyone will find it suits them to get the courts to decode what it actually means!
Oh to have a Swiss type choice where voters can demand a referendum to change our constitution to limit the feudal powers of government backed up by the judges (appointed by the government).
It may take a long time but change must happen if we are to have any real functioning democracy. How can we call ourselves a democratic republic if the biggest financial decision in the history of the state (bank guarantee) was made without a proper meeting of government ministers let alone a vote in our parliament?
We have to look beyond Kildare St, for solutions.
From 1992 but still valid even if unaddressed.
“I steer clear of definitive observations on legal texts, as you may have noted.”
No such thing as “definitive legal” when it comes to white collar issues in extremis.
After a certain level of trína chéile everything becomes political. Particularly when there are no allocation procedures such as bank recap in place. This is one of the reasons the EZ is such a dog’s dinner.
“The name of the game is power and if you ain’t playing power you are in the wrong place ”
“calls on the Government:
— to immediately lobby the European Central Bank for a one-off exemption from the rules of monetary financing, to allow the Central Bank of Ireland to destroy the €25 billion in sovereign bonds issued in February of this year, in lieu of the remaining promissory notes, plus the €3.06 billion bond also being held by the Central Bank of Ireland in payment for the 2012 promissory note; and…”
Jens sends his Greetings from Planet Earth, and was wondering when it was likely Ireland’s Central Bank would start selling off its portfolio of Irish government bonds?
Of course it is about power! What matters is how it is being exercised i.e. whether within an organised system of law or the law of the jungle. The European continent has had plenty experience of the latter. For the moment, the conduct of business remains with the former. However, it is neither a kindergarten nor, to quote Olli Rehn, a morality play.
I followed the debate in the Dáil, and it is clear that a bloc of TDs think that it is a mixture of the two. Poof! And the Wizard of the ECB makes a debt of €25 billion in bonds disappear! The government front benches sat like rabbits caught in the headlights afraid to call their bluff just in case the electorate may still believe it.
Incidentally, the chapter on Europe in the German coalition agreement remains as in the version leaked. It is very positive in tone to the extent that it reiterates Germany’s commitment to the country’s “European vocation”. The SPD grassroots is now going to vote earlier than envisaged and a new German government should be in place to allow a decent level of preparation for the European Council. Watch this space!
Reuters picks up the core elements of the coalition agreement in respect of Europe.
I would guess that neither Jens or Shane (& his man servant Stephen ) are on planet EARTH. The Irish CB will sell the portfolio at the agreed pace. Have there been any sales yet. Did you stay short all the way in to the current levels. I do not recall you being bulled up at the widest spreads.
Interesting case here…kinda similar…except for the influence…
Tull, I’ve told you before that you are barking up the wrong tree imagining me as a short of Gilts.
If you recall, there is a minimun pace agreed for the sales. The requirement for such sales will be reviewed most likely annually. No sales have yet been expected or reported.
The point is, that the idea these gilts will be “destroyed” while Ireland enjoys its booming real estate market and resurgent employment – all within the Euro – is somewhere off in another galaxy. Jens, by comparison, merely makes occasional trips to the upper stratosphere.
Please be aware that the ideal scenario for bond investors has always been, in the most general terms, an economy with modest GDP or GNP path where there is little or no inflationary pressure. Near or actual recession is perfectly OK, unless solvency looks dodgy. It is quite common to be simultaneously underwhelmed by a state’s economic prospects and positive wrt its bond market. Bonds do not give you an equity interest in a state – all that matters is (i) will they pay out, and (ii) what is the inflation and currency risk?
I remain scathing of the idea the Irish will default or leave the Euro and inflate.
The only commentators who seem to both favour have thought the consequences of the latter have no power to influence events at all.
Some plain speaking in the debate!
“Deputy Jim Daly: This ludicrous, childish and silly motion has been put down to the effect that we should write away €25 billion.
Deputy Stephen S. Donnelly: That is because Deputy Daly does not understand it.
Deputy Jim Daly: Dear Santa, how are you? I am sorry that the day ever came when it dawned on me that Santa did not exist, because I would love to send the motion off to him.
The money system exists for better or worse. The fundamentals of any money system are that one borrows and one pays back. Those responsible for the motion think that we are in some dream land where we can subvert that system and then wake up when it has all gone away. The writers of “Dallas” would have a challenge on their hands to come up with something like this.”
I would agree with you that the only circumstances in which the portfolio will disappear in the manner envisioned by Shane and Stephen is the break up of the euro. We will not be able to default on sovereign liabilities and maintain the same pay and rations for the domestic trough.
That said, I believe there are circumstances in which this portfolio will disappear or be termed out to infinity. These involve the destruction of the European architecture by the offspring of the same elite that caused the last two episodes of destruction and mayhem.
WW2 started in Sarajevo, if not well before. It was about more than the Germans. Both wars were driven by crises of capitalism.
This book gives a good overview of the breakdown of the international financial system in the 1930s.
There is no Santa giving out money, eh? Except to banks of course, which is where that twenty five billion and another forty plus went.
It truly is an an odd conversion to scroogery after the Europhile right’s enthusiastic support, nay demands, for giving borrowing sixty five billion to give to the private financial sector to save EMU/the financial sector/widows and orphans/national dignity/proud place among the most highly indebted first world nations of the Earth.
This is the repellent, rank, treasonous, amnesiac hypocrisy of the right in Ireland.
The Unsustainable Reality …. Michael Taft
When measured against GNP, our debt is through the roof. Interestingly, the debt still has yet to stabilise completely even by 2016. Even more interesting, Greek debt is projected to be 173 percent of GNI (a similar measurement to GNP) in 2015 – so were’ not that far off from the worst performing EU country.
I am sure that most commentators would agree that 150 percent debt is at, or beyond, the unsustainability benchmark. And that’s where Ireland is if we use GNP. [Michael Taft]