Markets vs. Democracy - Round 278

The Irish government has just announced that it will hold a referendum on the euro fiscal compact. The Irish Taoiseach Enda Kenny said he had taken advice from the country’s Attorney General, and made the decision to call a public vote. He also said he would sign the fiscal compact treaty at the meeting of EU leaders on Friday, and the details and arrangements for the referendum will be sorted and announced in the coming weeks, with a vote to be held before the summer.

The Irish government had previously said that the chances (or risks if you ask the markets and EU elite) of a referendum were always 50-50, so this was far from a foregone conclusion. And, as Zerohedge put it, markets have reacted badly to the news of democracy, with the euro weakening significantly. But what is the precise significance of this announcement?

• The vote will essentially determine whether Ireland has access to future bailout funds or not. For a country to access the ESM, the eurozone's permanent bailout fund, it must have ratified and fully adhered to the treaty, according to the terms attached to the deal. The Irish government has already given indications that it will tie its approach closely in with the prospect of further bailout funding, with Deputy PM Eamon Gilmore pointing out the link between emergency funds and the fiscal pact approval. These scare tactics are likely to grow throughout the referendum campaign, with the flip-side of rejecting the treaty being seen as tantamount to a vote for eurozone exit. In other words, the Irish will vote with a gun to their head.

• It provides yet another illustration of the clash between different parliamentary/constitutional democracies (in this case the German vs the Irish constitutions) that time and again have served as an ‘obstacle’ to perceived crisis solutions.

• Irrespective of the outcome, the vote will not derail the euro fiscal compact as it only requires 12 member state ratifications before entering into force, though it could well limit the impact of the pact.

• Those that thought that the complicated political situation in Europe could be reduced to a simple 26 vs 1 narrative, following Cameron’s ‘veto’ to an EU27 Treaty back in December, have received another reminder as to why that isn't the case.

In sum, it would have been difficult to avoid this referendum and we're glad the Irish government did not engage in the legal gymnastics that have been going on elsewhere in the eurozone (*cough* Frankfurt). If further fiscal integration is ever going to succeed (leaving aside whether it's desirable), it will have to happen with a clear and strong mandate from the people. This is also a practical point which market players should ponder. Changes built on a clear mandate from the people (particularly when wrapped in pretty heavy austerity) have a far greater chance of standing the test of time.

But the likely approach of tying a Yes vote to access to more bailout funds and greater security and a No vote to a eurozone exit is already worryingly over-simplistic. Finally injecting some democracy into the eurozone crisis should not be watered down by pigeonholing it into tightly defined categories.

That said, as we've noted, the fiscal pact has already been watered down itself and signing up to it would not be the end of the world for Ireland - but only if that's what the people decide after a full discussion of the issue.

BBC: Utterly unacceptable

Sophie Raworth, reading from the autocue live on the BBC One O'Clock news, has just made this quite unbelievable introduction to a piece on events in Ireland today:

"The people of Ireland return to the polls today in a referendum on whether to accept the Lisbon Treaty on enlarging the European Union."

Hat-tip to friends in Northern Ireland who alerted us to this.

This is a quite unacceptable distortion of the facts - the Treaty has nothing to do with enlargement, otherwise we might be campaigning for a 'yes' vote. This Treaty is about giving the EU more powers. What is the BBC on?

We've made a complaint - and we urge everyone else out there to do so too, and as soon as possible. The same piece reported that most people in Ireland are still to vote, many of whom may not yet have made up their minds. This kind of ridiculous and false statement might just tip the balance.

http://www.bbc.co.uk/complaints/homepage/

Speaking for Europe

If you're still making up your mind on Lisbon, see here for the dozens of pleas from pro-democracy people all over the EU, urging a 'no' vote:
http://www.europesaysno.org/index.html

Here's a handful of some of the latest comments:

Leo Beata, Sweden:

"To the Irish people, please vote "NO" .. for Europe, for a little bit of democracy, for sovereinity, for some power to the small countries...In Sweden we were promised exceptions when we were to vote for the EU-membership 14 years ago. Today they are all gone, and EU roles our lives and we just have to obey... For a peaceful future, please vote "NO" on friday."

Ninetta Donizetti, Italy:

"Europe has been bullying Ireland for too long! It's time Ireland and its people were treated with respect."

Tim Spencer, UK:

"Everyone in Europe should have the right to vote on this treaty. We are being treated with contempt. Where is the democracy in the EU?"

Gudrun Sievers, Germany:

"All european People looked for Ireland because in Germany we can not speak for yes or no to die Lisbon Treaty. The Idea of EU is fantastic, but not enough democracy - but we can not vote! Many Peoples (80%) are not for die Treaty! in Germany! Good Luck for the Vote. Please say no!"

Lave Broch, Denmark:

"Lisbon Treaty is the wrong way for Europe. The treaty does not make changes to EU's custom union towards the rest of the world and it strengthens the militarization of EU. It is also very undemocratic that only the Irish people got a referendum on the Lisbon Treaty and it is even more undemocratic that the Irish no in the first referendum was not respected."

G. Kissamitakis, Greece:

"IRELAND PLEASE VOTE NO!!! Greece, the place where Democracy was born, denied our right to vote!!! I ASK YOU TO VOTE NO to the LISBON TREATY ON BEHALF OF ALL GREEKS AND EUROPEAN CITIZENS!!!"

Martha Browne, Ireland:

"An appeal to my fellow citizens, cast your vote correctly in the NO box. If not, it could be the last chance to vote for anything meaningful ever again."

Lisbon in action

As Irish voters go to the polls today for the second time on the Lisbon Treaty (welcome to Venezuela the European Union), there is growing coverage of the news that Tony Blair is in all liklihood set to become the first EU President within a matter of weeks. This news was first uncovered by Open Europe as we reported on secret meetings hosted by the Swedish EU Presidency.

Most people in Britain and indeed Europe thought they'd seen the back of Blair when he left the House of Commons in 2007, saying, "That's it - it's the end."

But no doubt partly thanks to the invaluable work of his good friend Peter Mandelson in keeping the flagging Labour government alive long enough to get Lisbon enforced, Blair could be flying around the world in Blair Force One before we've started saving up for Christmas.

Assuming that the new EU President will be paid the same as the President of the European Commission, Jose Barroso, this means he or she will receive roughly the same basic salary as Barack Obama - the democratically-elected President of the United States.

Just think about that for a moment. A man voted in after years of high-profile campaigning and public debate and with the support of 69 million people, will be rubbing shoulders on the world stage with a man who just weeks before his election has not had a public word to say about the idea, and who will be nominated by 14 people (a majority of Heads of State, as per the Lisbon Treaty) behind closed doors in a meeting in Brussels, with no public input, not even from national parliaments.

And the people pulling the strings in the corridors of Brussels are amazingly arrogant about it. This week an unnamed senior French diplomat commented that although most people in Europe will be against the idea of Blair for EU President, because of his position on the Iraq war, that makes no difference at all, because "only public opinion is concerned about this, not the 27 Heads of State and Government that will vote him in".

Who, among the 'yes' campaign can honestly say this is not a step backwards for democracy in Europe? Amont many others, Brigid Laffan of the Ireland for Europe campaign has marked her campaign with shrill and hysterical outbursts against British people calling for a 'no' vote. If she is so anti-British, how can she possibly support the idea of Blair as EU President for the next two and a half years? Because that is what Irish people will be voting for today if they approve the Lisbon Treaty.

The same goes for all those Lib Dem delegates at conference a couple of weeks ago, who supported a motion saying Blair must not become EU President. Bit late for that, Lib Dems. It's precisely thanks to your "leader" Nick Clegg that such a position can even be created in the first place, given that he controversially allowed the Lisbon Treaty to sail through Parliament without the referendum he promised in his manifesto. Even if we wanted to, Britain wouldn't actually be able to stop Blair becoming EU President, because he only needs the support of a majority of EU heads of state.

This is probably just the first of many, many concrete and all-too-real examples of why Lisbon is bad news that will, if the Treaty is passed, start to hit us one by one over the coming months and years as we face up to the full implications of what we have done by allowing this to happen.

simple but (hopefully) effective

This one is a particular favourite...

A matter of trust

Irish PM Brian Cowen has announced there will be not be another referendum if Ireland votes 'no' to the Lisbon Treaty tomorrow.

He said: "There won't be a Lisbon Three -- that's for sure."

But hang on, that's exactly what they said last time. Click here to see Dick Roche, Irish Europe Minister, suggesting ahead of the first Irish referendum that it was 'delusional' to say there would be a second referendum.

He said:

"There is no plan B and there is absolutely no possibility of this Treaty being subject to a further renegotiation. The idea that we can reject this Treaty and have another Referendum as happened with the Nice Treaty is a dilusion. That cannot and will not happen."

And yet here we are.

The Irish government likes to pretend that no-one bullied them into voting again on the Lisbon Treaty after it initially gave the 'wrong' answer, but given Roche's unequivocal stance, clearly they did.

Wild claims

On 14 June 2009 the Irish Independent reported that Margot Wallstrom, European Commissioner for Communication, said during a visit to Dublin that the Lisbon Treaty would "encourage" affordable childcare in the EU.

A question was tabled to her in the European Parliament, by Syed Kamall MEP, asking the simple question:

"Can you please clarify which articles in the Lisbon Treaty will encourage affordable childcare in the EU?"

The question was tabled in order to deliver a response mid-September at the latest. However, having delayed this far, our Commissioner for "Communication" has, at a minute to midnight today declared her response will only be ready on 6 October, conveniently after the Irish referendum has already taken place.

So this completely unsubstantiated, nonsense claim from the politician we pay good money to communicate the Lisbon Treaty is allowed to stay just as it is, with no explanation.

We're reminded of The Economist column last week which described Wallstrom as "a Swede whose 'kum-bay-yah' approach grated with colleagues". It's grating with us a bit too.

If you haven't already checked it out you should have a look at her here on Newsnight after the last Irish referendum, when she failed spectacularly to explain what on earth people are supposed to do to reject this Treaty, since voting no is clearly not enough.

Double standards part 125

In an extraordinary admission today Ryanair boss Michael O'Leary confesses to his real motives behind his €500,000 campaign for a 'yes' vote in the Irish referendum on Friday.

He said: "One of the reasons that I am campaigning for a 'yes' vote is that our Government is incompetent, yet I need to persuade them to sell me Aer Lingus." Funny that. In June 2007 the European Comission blocked a bid by Ryanair to purchase rival airline Aer Lingus on competition grounds.

And in a clear conflict of interest, the EU Transport Commissioner Antonio Tajani spent six hours last week campaigning aboard a Ryanair flight alongside O'Leary.

Don't expect the Irish media to jump up and down about this though. If Declan Ganley had let slip that he was campaigning for a 'No' vote for some similarly dubious reason, all hell would of course have broken loose.

Don't count those chickens

Reuters has the story that Ireland's largest independent bookies, Boylesport, is already paying out on a Yes vote for the second Lisbon Treaty referendum, to be held on 2 October.

Apparently their spokesman said, "With odds at 1/12 a positive outcome looks like a foregone conclusion at this stage", before adding, "although we do expect it to be tight."

Rival betting company Paddy Power has said they won't be paying out a penny before 2 October, perhaps wary of getting their fingers burned like last year when they paid out more than 180,000 euros to those who had placed Yes wagers, before even a single vote had been counted.

While the Yes side do have a lead in the polls, the latest Millward Brown poll at the weekend shows that 21% of people still say they don't know how they are going to vote, which means there is still time to convince people that the Treaty is a bad deal for Ireland and a bad deal for Europe.

See here to read why http://www.europesaysno.org/

How you are paying for the Irish 'yes' campaign

Apparently the Young European Federalists are launching yet another 'yes' campaign to urge Ireland to adopt the Lisbon Treaty.

They write:

“The absence of a strong No side demonstrates that there are no real arguments to reject this treaty.”

Or maybe it’s more to do with the fact that there’s no public money being pumped into the ‘No’ side. The YEF, on the other hand, enjoys funding from the EU Commission in order to promote European integration, as we pointed out in our December publication, 'The Hard Sell'.

The group received a rather sizeable €132,927 from the EU between January 2005 and October 2007.

But don't take our word for it - check out the YEF's own website, where they proudly show off their EU funding.

Turn up the sound and click here for an example of the sort of stuff this group is spending your money on to get you to support EU federalism (warning - it's possibly the cringiest thing on the internet).

As regards the Lisbon Treaty, they believe it "is crucial to put the EU back on track on the road to unification".

One proposal they've put forward recently is for a single EU Olympic Team, an idea they came up with when Britain was doing well winning medals last year in Beijing. After the idea was covered in the newspapers in the UK, Toni Giugliano , the Vice-President of the group issued this extraordinary statement. Here's an extract:

“It’s great to see that the British press have reacted so passionately to the proposed European Olympic Team, especially since this is the year that team GB finally showed the continent and the world that Britain is not only the heart disease, cancer and diabetes capital of the world, nor the couch potato Rupert Murdoch reading state that everyone makes it out to be. No! Brits really do love playing sports, and winning at them too!... It may be the case that team GB did better than usual in these Olympics. Perhaps they fed their athletes with Special K instead of the usual fried chips ‘n egg. Mmmm, they’re learning.”

Quite why taxpayers should be paying for this kind of amateur rubbish is beyond us.

Nothing to fear from a 'no' vote

Good piece in the Wall Street Journal today, about how Ireland has nothing to fear from a 'no' vote.

Well worth a read.

Europe Says No

Check out this new pan-European campaign: "Europe Says No: No to Lisbon, Yes to Democracy" - http://www.europesaysno.org/

As well as explaining in detail why the Treaty is so bad for democracy, there's also a place to add your comments, and to show your support by signing up to the Facebook group.

Reading through all the comments, you can see how Charlie McCreevy got the idea that 95% of Europeans would have said 'no' to the Treaty if only they'd be allowed a say on it...

EU leaders admit Lisbon is unnecessary

Following an interview with the Swedish Secretary of State for Europe, Maria Asenius, a headline on EurActiv(German) reads: “EU can function without Lisbon Treaty” (including quote marks).

It reports that several "leading EU politicians digress from the thesis that the Lisbon Treaty is necessary for the effective functioning of the enlarged EU. The new message is that, without the Lisbon Treaty, the EU would be as capable of acting as hitherto."

Maria Asenius is quoted saying, "We cannot wait forever for a decision on this issue. We need a new Commission to continue EU businesses. With or without the Lisbon Treaty. We've got no choice."

This comes hot on the heels of Swedish Prime Minister Frederik Reinfeldt's admission that the Lisbon Treaty is not necessary in order for Ireland to keep its EU Commissioner, as claimed by the Irish government and the 'yes' campaign.

This kind of honesty - that the EU will continue to function as normal without Lisbon, and that it isn't, in fact, important enough to warrant the sacrifice of so much democracy - is most welcome at this stage in the debate.

Europeans for Democracy

For those of you unable to make it to Dublin for our recent event, "Europeans for Democracy", which brought together various people from across the EU to discuss their reasons for rejecting Lisbon, you may wish to read the transcript or listen to an audio recording over on our events page.

Lots of food for thought, and we would welcome your comments.

Astounding hypocrisy

The Vice-President of the European Commission Margot Wallstrom has today given an extraordinary interview to the Irish Herald, in which she attacks "false statements" from the 'no' side, and then goes on to pretend that Ireland is having a vote on its membership of the EU, rather than a Treaty.

In what reads like the lyrics of a love ballad, she says: "Ireland would be so much worse off without Europe.... Maybe we don't tell you often enough: We want Ireland in the EU ... Ireland being in the EU, to the rest of the EU, it means so much."

It also reads a bit like a threat to kick Ireland out if it does vote 'no'.

The paper says: "The Swedish politician is in Dublin to seek support for the Lisbon Treaty."

But the European Commission has repeatedly claimed in no uncertain terms that it does not get involved in national referendums.

See here for example, where the Irish Commission office claims: “It has been the long standing policy of the European Commission not to interfere in internal elections or referenda in Members States".

Or here, where Wallstrom's spokesperson Joe Hennon says: "There will be no advocacy or publicity campaign ahead of the second referendum."

We look forward to reading the full interview tomorrow, which, according to the Herald includes how the European Central Bank is prepared to put "an enormous amount of money" in Ireland and "Ms Wallstrom's view that Charlie McCreevy must regret his loose tongue."

No doubt she is referring to McCreevy's admission that 95% of EU countries would have rejected the Lisbon Treaty if their citizens had been allowed a say on it. Or perhaps his statement yesterday evening at Gresham College, when he said that last time around "Irish people in their wisdom decided... against the advice of everybody and said No."

We can only wonder how Mr McCreevy will feel about being publicly chastised by his colleagues for speaking his mind in his own country.

He's back

The Wall Street Journal carries an interview today with Declan Ganley, who is back from the wildnerness to fight the Lisbon Treaty.

His belief?

"Approving the treaty would be a betrayal of those in France and the Netherlands—not to mention the millions of others who were never offered a vote on the Constitution or Lisbon."

Without a hint of irony...

European Parliament President Jerzy Buzek has flown to Dublin to tell the Irish people to beware of 'outside' influences telling them how to vote in next month's Lisbon Treaty referendum. He described the Lisbon No campaign as “made up of marginal groups…and some [located] outside your country”.

He then went on to say that he had no wish to “tell people how to vote”, before telling people how to vote by suggesting that the referendum should not be “used for domestic messages” to bash the Irish government.

We've talked about the various EU institutions' penchant for meddling in the Irish referendum many times before but these remarks are a fine illustration of how seemingly intelligent people manage to lose all sense of reason and self-awareness.

Swedish PM lets the cat out the bag

Swedish Prime Minister Frederik Reinfeldt has finally admitted what no other EU leader dare say ahead of the second Irish referendum on the Lisbon Treaty.

He has drawn attention to the fact that, contrary to what Irish politicians are saying, the current, Nice Treaty rules represent a far better and far safer deal for Ireland in terms of its representation in the European Commission.

As we've argued many times before, the Nice Treaty arrangements do indeed call for the size of the Commission to be reduced. But only by one member. This means that if we were to stick to the current rules, Ireland would be without an EU Commissioner for 5 out of every 135 years (there are 27 member states, and each one would take it in turns to forego their commissioner for a five-year period at a time).

The Lisbon Treaty, however, still clearly states (go and check it out if you don't believe us), that the number of EU Commissioners must be no more than two thirds of the number of member states. Under these arrangements, Ireland will be without a Commissioner for 5 out of every 15 years.

In an effort to appease Irish people long enough to get them to say 'yes' to the Treaty, EU leaders made a political (not legal) agreement in June that, in return for ratifying the Treaty and giving the EU swathes of new powers, every member state would be able to keep its Commissioner.

Here's the thing. In the event that future EU leaders (they are bound to be different to the ones who made the promise in June) decide to stick to the promise made by their predecessors, and vote to allow the Commission to remain at 27 members (of which there is no guarantee), nobody knows how long that arrangement will last. As we said, the text of the Treaty remains unchanged, and the default Lisbon position, under which EU leaders will by then be operating, remains that Ireland will be without a commissioner for 5 out of every 15 years. There is absolutely nothing to stop them reverting to that default position at any time in the future.

As admitted by the Swedish Prime Minister.

Under the headline "Keeping our commissioner without Lisbon", the Irish Times' Europe correspondent Jamie Smyth writes on his State of the Union blog, that following an interview with Fredrik Reinfeldt, "a no vote would be respected and the Nice Treaty would prevail. Contrary to some of the exaggerated claims of yes campaigners the sky wouldn't fall on Ireland's head."

Smyth also reports that Reinfeldt said a "26 plus one" plan is favoured by diplomats and the probable solution, with 26 member states keeping a Commissioner, and the last state taking the 'High Representative' role currently played by Javier Solana.

Crucially, he quotes Reinfeldt saying: "We might in the future get back to this discussion. What if we keep on enlarging?"

Indeed.

Double standards II

As the Lisbon campaign in Ireland gets into full swing things are starting to get heated.

Ireland's Defence Minister Willie O'Dea yesterday told us to butt out after we published research showing that the Irish government only managed to get 24 percent of their proposed amendments made to the EU Constitution Lisbon Treaty, when it was negotiated back in 2002-2004 by Europe Minister Dick Roche. The fact is he was dead against some of the things the government is now pushing - such as a permanent EU President, a change to the voting weights, which will see Ireland lose 40% of its power to block decisions it disagrees with, and many of the important veto losses.

It seems fairly inevitable that the Government would have a pop at us for publishing facts they desperately would prefer to hide. But in light of the recent interventions from the EU Commission in the debate, it seems highly hypocritical to tell us to "butt out".

Only two weeks ago, the Commission felt the need to weigh in and rebuff claims made by the 'Farmers for No' campaign. Maybe the Irish government was too busy that day to do the rebutting itself, or maybe it wasn't considered to be up to the job by the "experts" (ha ha) occupying the corridors of DG Communication.

Other imaginative ways to use our taxes its resources to promote a Yes vote include sending EU officials into schools, to foster that all important pester power, and sending Communication Commissioner Margot Wallström to Ireland later this week to speak at various events, including the 'Lisbon Treaty Business Lunch with European Chamber of Ireland' and the 'Labour Women's Conference'. That's not to mention the appearances already seen by EU Commissioners Neelie Kroes, Magelena Kuneva and senior EU Commission official Catherine Day.

Will their salaries be included in the public cost of the 'yes' campaign?

"Trust me, I'm a Yes campigner"

It may be Thursday already, but it's not too late to tell you about an op-ed by Richard Waghorne in Saturday's Irish Daily Mail, which is important food for thought in the Irish Lisbon debate - now in full swing.

It notes that, while people have been very quick to mock the No campaign for "its various supposed links", little is said about the Yes side. His article has some pretty key revelations about two of the leading Yes campaigners in this year's second referendum.

Firstly, Waghorne notes:

"Concluding, understandably, that they are too discredited to sell the treaty themselves this time, ministers have largely stepped aside in favour of supposedly non-political pro-Lisbon groups. The problem is that the two people heading up the leading two pro-Lisbon front groups set up for this purpose are hopelessly compromised by the very real ghost of their political pasts."

We then learn that Pat Cox, the former President of the European Parliament who has been drafted in to head the 'Ireland for Europe' organisation, is in fact:

"a director of two heavyweight Brussels lobbying firms, one called CAPA and the other called European Integration Solutions. So whatever else happens between now and polling day in six weeks’ time, we are presented with the odd spectacle of a man in the pay of a variety of vested interests heading the chief Yes outfit."

More is to come as it is revealed that neither of Cox's lobbying firms have signed up to the European Commission's voluntary register, which would provide brief details of their workings and an estimate of the amount of cash spent lobbying the EU institutions. The firms are in fact so secretive that they do not even have public websites.

Cox has also been a special advisor to one of the EU Commissioners while retaining his links to these lobbying firms. Waghorne notes that: "In more robust jurisdictions, that would be considered a conflict of interest."

But this is Brussels we're talking about - remember Lord Mandelson's sojourn on a certain aluminium-exporting Russian oligarch's yacht while he was Trade Commissioner?

Waghorne then focuses his attention on another leading Yes campaign group 'We Belong', which is aimed at younger voters. This outfit is headed by Olivia Buckley, who was "central to [former Prime Minister Bertie Ahern's] attempts at media management in the months when he was lying about money lodged in his private account while he was finance minister."

All very unsavoury stuff, I'm sure you will agree.

Today, Ryanair boss Michael O’Leary has also thrown his hat into the ring, promising €500,000 to the Yes campaign and various PR stunts such as cheaper seats on planes. He has proudly claimed to have read the Treaty - something which PM Brian Cowen and EU Commissioner Charlie McCreevy failed to manage first time around.

However, it seems O'Leary may have been 'skimming', if that. Asked by the Irish Daily Mail how the Treaty would affect the EU's Single Market, all he could muster was: "I’m not going to get into explaining the European treaty; go read it yourself."

He went on to pluck some very familiar general arguments out of thin air, such as: "Without Europe and the euro, the Irish economy would be run by our incompetent politicians, our inept civil service and the greedy public sector trade union bosses."

Yet, in the same press conference he readily admits that, if there's a no vote, "I don’t think we’ll get drummed out of the euro." As we've said before, it is highly misleading and patronising to pretend that this is a referendum on being 'in or out' of the EU, or the euro. This is not a question of being "with" or "without" Europe - it is specifically about the kind of Europe we want to see. Even the Editor of the Church of Ireland Gazette felt compelled this week to appeal to campaigners to stop using this kind of "moral blackmail."

(It's also plain wishful thinking to suggest that Lisbon would be the remedy to Ireland's economic ills. Again, as we've pointed out before, any 'EU bailout' would require at the very least the tacit support of German taxpayers, which is simply not forthcoming.)

We've noticed that the 'yes' campaigners are increasingly falling back on these shallow 'in-out' arguments in the absence of anything decent or detailed to say about the actual Treaty.

Very poor effort, people. Very poor.