Richard Murphy points out the futility of Article 123, Lisbon Treaty

From The Telegraph:

[Jeremy Corbyn] has proposed a “People’s Quantitative Easing” scheme in which the Bank of England would “be given a new mandate … to invest in large-scale housing, energy, transport and digital projects”...

Mr Corbyn’s proposals would clash with Article 123 of the Lisbon Treaty, which forbids central banks from printing money to finance government spending. Lawyers warned that a lengthy fight with the EU would be a certainty, and could mean that infrastructure projects end up incomplete.

Traditional QE was introduced by the Bank in 2009, since when it has intervened in the bond market to buy Government debt. Key to this is that the Bank buys bonds from the so-called secondary market - from private investors rather than directly from the Government.

Buying the instruments directly from the state is illegal under Article 123 of the Lisbon Treaty. Richard Murphy, who Mr Corbyn has named as the architect of People’s QE, has proposed “a ruse” in order that the Labourite’s plans not attract the ire of EU lawmakers.

“The bonds have to be sold into the financial markets first, but there is no reason at all why this could not be for an agreed fee akin to underwriting, after which the bonds are, indeed purchased by the Bank,” he has said.

Mr Murphy said that Article 123 was clearly a piece of legislation whose “sell-by date had passed”, and that some fiddle would be required to get around it. But the EU may not look kindly on attempts to bypass its rules.

Whatever the merits or otherwise of Corbyn's suggested projects are (housing is a great money spinner, you'd struggle to lose money on that), Murphy is bang on with that one.

The Bank of England was originally set up to borrow money from the general public and give it to the government to spend on enlarging the navy. It has somehow turned into a 'central bank' over the years, but that is a question of fact and degree.

HM Government, HM Treasury and the Bank of England are all different parts of the same thing. Why would it make any difference which one of them borrows or prints money to finance public expenditure? Who cares what the book debts between different parts of the government are, it all nets off to nothing.

To cut a long story short, if I need money to pay for my loft conversion, it doesn't make any difference whether I borrow the money in my own name; whether my wife and I borrow it jointly; or whether she borrows it and then lends it on to me. Our total household indebtedness and our total household assets are exactly the same. The only relevant question is this: "is it worth getting a loft conversion done?", that is all.

The UK's liability for Greek debts

From Hansard, 8 June 2010 (page 3):

Lord Pearson of Rannoch: To ask Her Majesty’s Government whether Article 122.2 of the Treaty on the Functioning of the European Union has been or could be used to require the United Kingdom to underwrite £9.6 billion of other European Union member states’ debts.

Lord De Mauley: My Lords, EU finance Ministers agreed on 9 May that up to €60 billion of emergency finance can be provided to any member state in accordance with Article 122.2. Only where there are defaults on loan repayments would there be a cost to the EU budget. Member states would be liable for a share.

Based on the United Kingdom’s contribution to the 2010 EU budget, the UK’s share would be approximately 13.6 per cent, or up to a maximum of around €8 billion. Euro-area finance Ministers have also agreed a €440 billion package of assistance to be provided through a special purpose vehicle. The United Kingdom has chosen not to participate in this, and there is therefore no question of any liability arising to the United Kingdom.

Lord Pearson of Rannoch: My Lords, I thank the Minister for that Answer, and I welcome him to his new position. However, I have to point out that this article can only be used legally to help with natural disasters, such as earthquakes and so on. Is he aware that the Eurocrats are also violating Article 125, which prohibits financial bailouts of any kind? If so, can he tell us what the sum of all this illegality is going to cost us?

Secondly, since this year we have to send a further £9.7 billion in net cash to Brussels, and since the TaxPayers’ Alliance puts the cost of our overall membership at £120 billion a year, has the time not come to review that membership, starting perhaps with an independent cost-benefit analysis?

Lord De Mauley: My Lords, there were several questions in there. I shall first answer the noble Lord’s question about Article 125 — the so-called bailout clause — which states: “The Union shall not be liable for or assume the commitments of... governments... A Member State shall not be liable for or assume the commitments of... governments…of another Member State”.

That does not rule out member states lending each other money*. The noble Lord refers to a figure of £9.6 billion. The Government do not recognise that figure. If he can give us a basis for it, we will look into it.

* Oh yes it does. It says "A Member State shall not assume the commitments of governments of another Member State".

Via UKIP Daily Bulletin.

Tactical Voting

This whole pseudo debate about the pro's and con's of tactical voting, which the leaders of the three main parties now officially oppose is all rather arid, and of course begs the question of why we don't move to some form of PR*.

My view is, sod it.

Vote for the party whose policies you like best, in my case UKIP. Will UKIP win any seats? Possible but unlikely. Will it make a difference to how our government behaves if ten per cent of people vote UKIP (i.e. if 2.5 million people vote for us as did at the EU Parliament elections last summer)? I very much think it would.

Would it make a bigger difference if our share of the popular vote was the same as last summer (i.e. about 16.5%)? Yes, of course. None of these votes would be 'wasted', every additional one per cent of people who vote for us has a small, but measurable impact on what will happen over the next five years. Maybe we'll even get an in-out referendum or something...

* Having looked at all the options, it strikes me that the simplest and best being multi-member constituencies, where every voter casts one vote (or several votes, in the case of some people) for one named candidate; the candidate with the highest number of personal votes chooses which of the sub-constituencies (i.e. an existing constituency) he or she wishes to represent, and then the candidates with the second and third highest number of votes choose one of the other two sub-constituencies.

Whether three or four or five is the right number of existing constituencies to be merged into a super-constituency or a multi-member constituency is a separate debate.

Loophole Of The Week

From Allister Heath's editorial in CityAM:

The EU is caught between two provisions of its constitution.

Article 125 rules out bail-outs in ordinary circumstances: "The union shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of any Member State".

However, Article 122 provides a loophole: when "a member state is in difficulties or is seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control, the council, on a proposal from the commission, may grant, under certain conditions, union financial assistance."

See also here.

Vaclav Klaus vs. The Sudeten Germans etc.

There's an interesting but depressing article here, which is all the more interesting for what it doesn't say as for what it does. This part, however, sets me off on a tangent:

Klaus signed the EU reform Lisbon treaty on Tuesday after the Constitutional Court (US) ruled that it is in line with the Czech constitutional order, and after the EU met his demand for an opt-out for Czechs from the Charter of Fundamental Rights, part of the Lisbon treaty. Klaus demanded it in fears that the charter might enable the transferred Germans to claim their former property on Czech soil, confiscated from them on the basis of the post-war Benes decrees...

As I said in my previous post:

... the only pre-requisite for land ownership is a state to guarantee title*; and once you have a state you have land ownership (even if the land belongs to 'the state' or is earmarked as common land). Land-ownership and the state are two sides of the same coin.

So this is an excellent example of land-ownership and the (sovereign) state being two sides of the same coin. The Czechs are giving up part of/a lot of** their "sovereignty" and with it are giving up the right to guarantee the title to land that their state had granted to others under the Benes decree.

Those pesky Sudeten Germans might now find that a higher 'state' (i.e. the EU) is now guaranteeing their title to that land, which trumps the Czech government's guarantee. OK, in practice, I'd expect them to be compensated in cash rather than actual Czechs being physically evicted, but the principle stands.

* Unlike any other form of 'property' which can only arise from an individual's efforts and free exchanges with other individuals.

** Delete according to taste.

Nine years? Really?

From TheParliament.com:

Pöttering,who was president [of the EU Parliament] for two-and-a-half years until June, added, "Some may suggest the EU went too far to placate Klaus but, let us remember that this is a treaty some of us have been fighting nine years for."

Denis Cooper's comment (via email):

Oh, surely not? Surely this is a new and different treaty, one which didn't need the UK referendum promised for the previous treaty?

Bugger.

From the BBC:

Czech President Vaclav Klaus has signed the European Union's Lisbon Treaty, the final step in its ratification....

I genuinely feel a bit depressed now.

Power Grab Of The Week

Condensed version of email from Denis Cooper (with kind permission):

"An EU official has told The Times of Malta that one item in the draft conclusions of the two day EU summit which starts today, will be to extend the term of the EU Commission for an extra six months.

I've looked carefully, and there is definitely no specific legal basis for extending the term of the Commission under these circumstances, not even in a "caretaker format". And over two weeks ago I emailed the office of Commissioner Neelie Kroes about it, and the bloke (one Jonathan Todd) broke off the exchange when I posed the question: "But on what legal basis could the Council of Ministers authorise the present Commissioners to remain in post beyond the end of their five year term, which expires on October 31st?"

Anyway, they think they can do whatever they please by invoking the catch-all Article 308 TEC, on pdf page 179 here:

"If action by the Community should prove necessary to attain, in the course of the operation of the common market, one of the objectives of the Community, and this Treaty has not provided the necessary powers, the Council shall, acting unanimously on a proposal from the Commission and after consulting the European Parliament, take the appropriate measures."

Although in this case they might have a problem consulting the European Parliament before midnight on Saturday."

More EU DoubleThink

From the BBC:

Germany's Constitutional Court has ruled that the EU's Lisbon Treaty is compatible with German law - but has suspended ratification of it...

And why, pray tell?

... The court said extra national legislation was needed to ensure that the German parliament participated fully in adopting EU laws.

Surely, if they have to amend German domestic law first, then the Lisbon Treaty is not compatible with existing German domestic law?

Your guess is hopefully better than mine

My forecasting record so far on how the Irish will vote in a treaty to approve or reject The Lisbon Treaty is precisely zero out of one, as a year-and-a-bit ago I assumed, along with Paddypower and everybody else that they'd vote 'Yes'.

So a big thanks to everybody who took a view in last week's Fun Online Poll - a healthy majority (me included, but this is just gut instinct) think that the result will be another 'no'. I just hope that your combined forecasting abilities are better than mine were last time.

Staying with the Euro-theme, this week's Fun Online Poll is "Which was the first country to join the Euro-zone?". Cast your vote here, or use the widget in the sidebar.

I was surprised to hear them say this

Andrew Marr interviewed David Cameron this morning, and asked him whether he would have a referendum if the Tories won the next General Election after the Lisbon Treaty/Constitution had already been ratified.

Dave just waffled and waffled of course and refused to give a 'yes' or 'no' answer. Unless my ears were deceiving me, Andrew Marr hit back at the waffle by saying "So UKIP are right, then." The transcript should be available here soon and I hope that they leave that bit in.

Also nice was seeing Selina Scott tell Charlie Kennedy that she wanted there to be a referendum on the Lisbon Treaty/Constitution.

“Nice farming industry you’ve got here. Shame if anything were to happen to it…”

From The Irish Independent:

FRENCH Agriculture Minister Michel Barnier last night warned Irish farmers that failure to support the Lisbon Treaty next time around could have severe ramifications for farming and rural communities, writes Aideen Sheehan.

Mr Barnier made his comments at the presentation in Paris of a French government award to Fianna Fail MEP Liam Aylward for his political efforts in support of the European food and agriculture sector.

Mr Barnier's words will be seen as a rebuke to the IFA for their refusal to give their support to the 'Yes' campaign in the Lisbon Treaty referendum until the last minute in a bid to gain political leverage in the World Trade Organisation talks.

Via Christina Speight.

Post title shamelessly pinched from Julia M.

Reader's letter of the day

From yesterday's London Lite:

DAVID CAMERON could easily save the Irish from the pain of a second referendum on the Lisbon Treaty. Pledge as Prime Minister to hold the long-promised referendum [in the UK] and that should kill it off for good.

Dr D R Cooper, Maidenhead.

The full, unedited version appeared in The Scotsman.

Irish* angered by Czech President

From today's FT, with no apparent deliberate irony:

Micheál Martin, Irish foreign minister, said "the very political [i.e. EU-sceptic] comments" Mr Klaus made at a dinner given by Declan Ganley, a leading campaigner against the [Lisbon] treaty, were "an inappropriate intervention" at a time when the "Irish government is engaged in discussions with our partners in the European Union".

* That should read "Certain members of Irish government ...", of course.

Luton votes against the EU

More details here.

German court declares smoking ban 'unconstitutional'

I can't be bothered translating this article, but the bare bones are that the German Constitutional Court has lifted the smoking ban for smaller pubs and clubs.

Yup, that's the same Court which has put ratification of The Lisbon Treaty on ice.

"Poland in new blow to EU treaty"

Thank you, Mr Kaczynski!

Productivity gains in the Civil Service

Two short days ago, the gummint's line was ... In relation to ratification, there were all sorts of procedures that needed to be gone through, involving the Great Wafer Seal, and it always took several weeks for these procedures to be completed.

According to a PA report of today, as quoted by Open Europe, finishing off ratification is now only going to take "days or weeks"!

Did they stumble across the how-to guide on this 'blog?

Via Denis Cooper.

Damn and blast

Per the BBC website "Stuart Wheeler has lost court attempt to force referendum on EU treaty. More soon".

Now let's see if it really takes the f***ers "weeks or even months" to sort out a couple of pages of paperwork.

Instruments of ratification

There was much huffing and puffing last week, when the judge in the Stuart Wheeler case told the gummint it ought to stay ratification of the Lisbon Treaty until he had delivered his ruling (which ought to be any day now!).

Our Sub-Prime Minister then "told a Brussels press conference that the court ruling fitted the government's ratification timetable, which could take weeks or even months to complete."

Denis Cooper did a bit of digging on this; it turns out that 'Any lie will do, if they think they can get away with it':

The FCO's internal procedures (see part 5 of this) could probably be sorted out in a day or two, bearing in mind that these people all work within a few hundred yards of each other and have e-mail and telephone and stuff. If they need a steer on Step 5b) "Treaty section to draft Instrument of Ratification", they can just cut and paste from this handy two-page template for an 'Instrument of ratification'.