Government has power to have blackmail clause removed

Government collusion in Treaty blackmail clause exposed. Blackmail clause in ESM Treaty is currently inoperable, requires Dáil ratification. Government must use its power to have clause removed. Taoiseach must make immediate statement.

The United Left Alliance today issued a challenge to the Government to force the removal of the ‘blackmail clause’ from the ESM Treaty and the European Fiscal (Austerity) Treaty – which it has the power to do.

Speaking at the ULA press conference, Paul Murphy MEP said:

The main argument of the government in support of the Austerity Treaty is blackmail: vote yes, or there will be no money from the European Stability Mechanism when we need another bailout. But this is a fraud – because the ESM Treaty with its blackmail clause, and the related amendment of the Treaty on the Functioning of the European Union, both still have to be approved by the Dáil.

Joe Higgins TD said:

The government therefore has a unique opportunity to get the ‘blackmail clause’ removed because unlike the Fiscal Treaty, Ireland does have a veto in relation to the amendment of the EU Treaties. If the government wants a free and fair debate on the merits of the Fiscal Treaty it should refuse to ratify the ESM until the ‘blackmail clause’ is withdrawn.

Richard Boyd Barrett TD said:

All serious analyses of the Austerity Treaty show that it will not solve the economic crisis in Ireland or across Europe: the arguments of the ULA and others on the left, that austerity will deepen the crisis, are supported by the likes of Paul Krugman, cuts supremo Colm McCarthy and head of the IMF Christine Lagarde. The experience in Greece is that austerity has made the situation much worse.

In that context, the blackmail clause has been presented as the only significant reason why the people of Ireland should vote for the Austerity Treaty: if we don’t vote ‘yes’, we will be refused money from the ESM if another bailout is required in a few years time. However, it is now clear that the government has the power to have this clause removed and then have a debate on this Treaty without this shameful threat hanging over people.

Joan Collins TD said:

Labour and Fine Gael have the power to force the removal of this blackmail clause. Enda Kenny and Eamon Gilmore agreed to the blackmail clause so that they could frighten people into voting ‘yes’ in case the government was forced to hold a referendum here. But it is not too late for this blackmail clause to be removed. Massive pressure has to be built on the government now to force them, at the very least, to veto the ESM Treaty unless the blackmail clause is withdrawn.

Seamus Healy TD said:

We call on the Taoiseach to immediately make a statement on this matter. If he wants a free and fair debate on the Fiscal Treaty, he should say he intends to use the government’s veto powers to get rid of the blackmail clause. But if he intends to ratify both the amendment to Lisbon and the ESM with this clause in place, he and the Government are guilty of colluding with Merkel and Sarkozy in making this stick to intimidate the people into voting for the Austerity Treaty.


Notes:

In December 2010, the European Council agreed to amend the Treaty on the Functioning of the European Union (TFEU) in order to set up the European Stability Mechanism (ESM). This amendment is being carried out under Article 48.6 of the Treaty on the European Union (Simplififed Revision Procedure) and must be ratified in all EU member states by 1 January 2013 if the ESM is to come into force. This is proposed to be done in the Dail with the European Communities Act 1972 (Amendment) Bill.

Michael Noonan declared on February 14 that primary legislation will be needed to ratify the ESM Treaty in Ireland. A Bill to ratify the ESM Treaty as well as to ratify the amendment to the TFEU is likely to be presented to the Dáil in April as the Treaty on European Stability Mechanism Bill.

In the original ESM Treaty that was signed on 11 July 2011, the ‘blackmail clause’ was not present. However, in January 2012 the Heads of Government agreed to insert a blackmail clause into the ESM Treaty and it is included in the ESM Treaty that was signed on 2 February 2012. This clause means that Member States must ratify the Fiscal Treaty if they are to access to bailout funds from the ESM in the future (see clause below).

This clause has been presented in the debate as the main reason why the people of Ireland should vote for the Austerity Treaty: if we don’t vote ‘yes’, we will be refused money from the ESM when another bailout is required in a few years time.

The ULA has pointed out that the government has collaborated with the insertion of this clause. The amendment of the ESM Treaty could only have been agreed unanimously, which means that the government actively or passively participated in the insertion of a clause, the main purpose of which is to intimidate people into accepting the Fiscal Traty.

The government has tried to create the impression that the ‘blackmail clause’ is already in existence. However, this is not the case. In order for the ESM Treaty and the relevant clause to enter into force, the amendment to the TFEU has to be ratified by all of the member states. That means that the government could refuse to ratify the amendment to this Treaty unless the clause is withdrawn.

The reference within the Fiscal Treaty of the condition of ratifying this Treaty in order to access funding from the ESM is irrelevant. The key text determining access to ESM funding is the ESM Treaty itself.

Extract from ESM Treaty, as revised in January 2012 and signed on 2 February 2012:

On 9 December 2011 the Heads of State or Government of the Member States whose currency is the euro agreed to move towards a stronger economic union including a new fiscal compact and strengthened economic policy coordination to be implemented through an international agreement, the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union (“TSCG”). The TSCG will help develop a closer coordination within the euro area with a view to ensuring a lasting, sound and robust management of public finances and thus addresses one of the main sources of financial instability. This Treaty and the TSCG are complementary in fostering fiscal responsibility and solidarity within the economic and monetary union. It is acknowledged and agreed that the granting of financial assistance in the framework of new programmes under the ESM will be conditional, as of 1 March 2013, on the ratification of the TSCG by the ESM Member concerned and, upon expiration of the transposition period referred to in Article 3(2) TSCG on compliance with the requirements of that article.

Extract from Treaty on Stability, Coordination and Governance in the Economic and Monetary Union (Austerity Treaty), page 3:

STRESSING the importance of the Treaty establishing the European Stability Mechanism as an element of a global strategy to strengthen the Economic and Monetary Union and POINTING OUT that the granting of assistance in the framework of new programmes under the European Stability Mechanism will be conditional, as of 1 March 2013, on the ratification of this Treaty by the Contracting Party concerned and, as soon as the transposition period mentioned in Article 3(2) has expired, on compliance with the requirements of this Article,

The amendment to Article 136 of the Treaty on the Functioning of the European Union to allow the ESM to come into existence is the following:

“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 area as a whole. The granting of any required financial assistance under the mechanism will be made subject to strict conditionality.”

Extract from article 48.6 of the Treaty on European Union which is the procedure which is being used to amend the Treaty on the Functioning of the European Union and clearly requires unanimity:

“The European Council may adopt a decision amending all or part of the provisions of Part Three of the Treaty on the Functioning of the European Union. The European Council shall act by unanimity after consulting the European Parliament and the Commission, and the European Central Bank in the case of institutional changes in the monetary area. That decision shall not enter into force until it is approved by the Member States in accordance with their respective constitutional requirements. The decision referred to in the second subparagraph shall not increase the competences conferred on the Union in the Treaties.”