Bruce Arnold

Critic of Public Affairs, writing about art, theatre, music and politics

We are about to strip ourselves of all remaining control over our sovereignty and our money. We should think again

There is growing concern about further diminishing of our sovereignty in the referendum at the end of May. Other EU legislation provokes even greater alarm. In practical terms this involves money and huge further surrender of state control over our fiscal resources affecting our wealth and our well-being.

We face a future where the more successful we are in getting ourselves out of the debt we were plunged into by the 2008 bank guarantee, the more we will be made to contribute to enormous and growing debts in the euro-currency area. Italy and Spain, whose financial difficulties dwarf ours, will help to soak us dry. These are the details. There are two relevant treaties, the ESM Treaty -- which is not an EU treaty but which we still have to ratify -- and the Fiscal Compact Treaty, which we vote on in the May referendum.

The treaty establishing the European Stability Mechanism is most frightening since it will have the power to call on Ireland to make a contribution to the agency (not to the EU) of up to €11,000,000,000. This is one-third of government tax revenue in 2011.

This can be increased by the ESM at its sole discretion at any time in the future. There is no limit to what may be sought from members of the 'mechanism', which has wide-ranging immunities in the exercise of its powers. Our Government is seeking to pass this into law by simple Dail legislation, allowing a body outside Ireland -- and outside the normal safeguards of the EU -- to intrude massively into the control over our revenue and expenditure. We have tasted this with the troika. It is nothing compared with what is to come.

The mechanism will order us to raise sovereign debt and hand it over. The mechanism will then decide where, when, whether and how to use it. Once handed over, Ireland will have no claim or say in what happens. We will not benefit by right. We may be helped, but at the discretion of the ESM.

As of now, our Constitution still controls government disposal of funds raised by taxation. We still decide and look forward to when such decision-making will be restored fully. The Constitution defines that limited privilege.

Under the ESM Treaty we will hand over massive economic, fiscal and budgetary powers. The coming referendum, creating as a new law the complementary Fiscal Compact Treaty is only the stepping-stone towards this disaster. These powers cannot and should not be alienated as proposed by the Government. The idea of doing this while 'reforming' the Constitution is laughable.

In the Crotty Case a quarter of a century ago we thought this had been settled. On that occasion the late Brian Walsh, speaking in the Supreme Court, made this point:

"It is not within the competence of the Government, or indeed of the Oireachtas, to free themselves from the restraints of the Constitution or to transfer their powers to other bodies unless expressly empowered so to do by the Constitution. They are both creatures of the Constitution and are not empowered to act free from the restraints of the Constitution."

There is a view, supported by the former Attorney General, Paul Gallagher, that an amendment to Article 136 of the TFEU (Treaty on the Functioning of the European Union) will solve the problem and legitimise the ESM in EU law terms. The amendment reads: "The Member States whose currency is the euro may establish a stability mechanism to be activated if indispensable to safeguard the stability of the euro as a whole."

This mechanism will not legally come into force until 2013. How then can it legitimise the ESM Treaty which it authorises now? Surely it cannot? Surely by then, at the rate the EU changes its collective mind, we will be in new territory?

We cannot govern ourselves -- or allow ourselves to be governed by others -- on a future undertaking with which, in all conscience, the Irish people could not possibly agree. Surrender one-third of annual tax revenue to a new and untried organisation, not part of us nor part of the EU? Such is the way of madness. The wording of the Article 136 Amendment confirms that it requires all euro member states to ratify the proposed stability mechanism. Yet the ESM Treaty requires only a minority of eurozone states to ratify it. The Fiscal Compact Treaty can come into force when 12 states ratify it. So the Amendment needs all of us, in 2013, to do something which is being treated as law now! How can it make what we do now constitutionally alright both now and in 2013?

The amendment authorising the ESM Treaty was not so designed and cannot be approved as a promise. Think of all those promises broken by the eurozone/euro area countries by those powerful manipulators of our future, Angela Merkel and Nicolas Sarkozy!

We cannot establish this European Stability Mechanism as it stands and make it work in law and in practice, not to mention the different constitutional situations in other eurozone member states (in Germany a constitutional challenge is already being mounted, also in Estonia). Others are expected to follow.

The rule of EU law is not operating properly. Most notably, it cannot lawfully give us the ESM now and we cannot change the Constitution on a promise. We have already made the sovereign change, in 1972. It binds us still now. The ESM stands outside the EU framework. It has not been universally ratified as it should have been. Not only is it something that we have yet to approve, it is also open to question whether the approvals in other countries conform to constitutional acceptability under EU law. The casualness is astonishing.

One example will suffice. Whatever happened to ESM Treaty Number One? The previous ESM Treaty was signed in July 2011 by Michael Noonan and by other eurozone finance ministers. It was never sent round for ratification. That ESM Treaty said bondholders should be "burned" before eurozone states could draw on the proposed stability mechanism. Treaty number two has abandoned that provision. This was signed by eurozone ambassadors on February 2. Are we due yet another version?

I view Enda Kenny and the Government he leads as dedicated, honest and sincere. Yet they are woefully bound by duty and loyalty to our rulers in the EU and to other governments bent on our subjection, if not our incidental further destruction. They are moving on this issue in the wrong direction and our ruin is the likely outcome.