EURDEMOCRACY

What is happening to YOUR money and that of your children and grandchildren? Grave defects in proposals to create the European Finance and Stability Facility/Mechanism (EFSF), the European Stability Mechanism (ESM), and the Fiscal Compact (TSCG) will radically change your life and all Europeans. Will politicians succeed in destroying sound money by their shenanigans behind closed doors? Will the Commission be turned into a toothless secretariat? Should politicians ‘task‘ it for their own dubious purposes? Or should it be INDEPENDENT?

Would you agree that government ministers,

  • some of whom have been accused or shown to be guilty of fiddling the books,
  • fraudulently breaking European law,
  • undermining the currency,
  • being involved in political corruption,
  • or knowingly colluding with those who do so in secrecy

should HAVE LEGAL IMMUNITY FROM COURT ACTION? Should all their staff be:

immune from legal proceedings with respect to acts performed by them in their official capacity and shall enjoy inviolability in respect of their official papers and documents.

Politicians have created a fraudulent EURO that ignores the Community democratic rules. Their aim was to hide national fraud behind a European cloak — without democratic control or proper elections. If they were again involved in multibillion euro fiddles, why should they be above all Courts of Law? Does anyone have a guarantee that politicians will always be moral and never make any mistake? Democratic control and the Law are there because politicians can be immoral and often make mistakes.

Do you think the public should have a say before this legal immunity of the political class is applied? Should the legal framework be decided by those who have previously been found guilty of wasting billions of taxpayers’ money? Should LAW be INDEPENDENT of Government, especially those who control the budget?

The concept of a supranational and democratic Community demands that the Commission must be independent and composed of universally accepted fair-minded individuals. Their task is to PROPOSE to politicians measures that will be to the benefit of all Europeans. When politicians and government ministers want the Commission to be their secretariat acting at their dictates, the idea of Community is turned upside down. It is hegemonic rule by a Council Politburo. In the past the Commissions were almost entirely non-political. The European Commission was created so that politicians could not turn Europe into a zone of corruption and warfare. Corrupting the Commission and making all members colluding fellow politicians is to place the fox in charge of the chicken-house and all the EU budget too.

What do YOUR lawyers, paid for from your taxes, the Council’s own lawyers, say about these bizarre and extraordinary proposals?

The Council refused my request to see the Legal Opinion of their Legal Service on the following non-Community innovations: the EFSF (European Finance and Stability Facility), the ESM (European Stability Mechanism) and the Fiscal Compact (the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union), TSCG and similar matters. I appealed, reminding the Council that it was both URGENT and of major financial importance, and needed for democratic debate.

After the longest delay possible according to the Freedom of Information Regulation 1049/2001, the Council again refused. I therefore introduced a complaint to the European Ombudsman (0862 /2012). The Council again refused to supply documents paid for by the tax-payer and vital for a democratic debate on what exactly is happening on the Euro crisis. The so-called rescue mechanisms cost multiple times the annual budget of the EU. The crises involve politician-generated frauds and Treaty-busting overspends. Now the politicians expect the public to have politician-generated solutions, legally secure as a sieve. They will waste oodles of money for generations to come.

The following is my reply to the Ombudsman, awaiting his decision.

Council’s Refusal to supply Legal Opinions on the EFSF, ESM and Fiscal Compact.

Please refer to my earlier correspondence with the Council.

The Council has chosen only to reply about the Fiscal Compact, the Treaty on Stability, Coordination and Governance in the EMU.

My reply is in three parts:

(A) The lack of sensitivity and sense of proportion of the Council/European Council to democracy in monetary matters, given its huge financial and democratic importance;

(B) Legal position – the refusal to show a Legal Opinion is in violation to the treaty articles and European court judgements. The Council position is untenable and hypocritical because parts of the legal Opinion have already been published by some Parliaments. Publication is normal and required in any civilized democracy. Legal opinions must be published for democratic debate.

(C) I also ask the Ombudsman to investigate if other Legal Opinions exist for the ESFS Agreement and ESM treaty, by hiding them in other contexts. The ESM treaty for example gives legal immunity from Court action to the staff of the ESM and tax-free status for staff. This is a highly controversial matter given the number of governmental frauds exposed during the euro crises. The ESFS Agreement results in a private company in Luxembourg, ‘tasking’ the European Commission, a tax-paid, EU civil service in the public sector, ‘to perform certain duties and functions as contemplated by the terms of the Agreement’ (Preamble 3). Is the Commission a public or a private body? The Agreement is contracted according to English law and may be dealt with by Luxembourg Courts, although the position of the Commission to act or complain remains dubious as it is considered a skivvy of the Company and only Member States are mentioned in legal action (Art 16). Has the Commission become the private secretariat of a Luxembourg company?

A. Importance of the issue.

1. Practically unlimited amounts of money is involved. Public liability to irresponsible politicians’ action is at stake. A group of countries but not the whole Community of 27 Member States is proposing to implement monetary innovations that represent a budget of FIVE or more times the entire EU budget without proper discussion or control through the EFSF and ESM with dubious control through the Fiscal Compact. The proposed solution lacks adequate democratic supervision. It involves ministers setting themselves up in a private company in a location that many of them previously denounced as a tax haven and subject to utmost secrecy about banking transactions.

Süddeutsche Zeitung, 31 July 2012

France and Italy favour giving the ESM “virtually unlimited firepower” via ECB liquiditySüddeutsche reports that a number of eurozone member states, including France and Italy, as well as leading members of the ECB Governing Council, favour granting the eurozone’s permanent bailout fund, the ESM, a banking licence – which would give the fund “virtually unlimited firepower” beyond its projected 700 billion euro via an open credit line at the ECB. Handelsblatt cites the ECB’s former Chief Economist Jürgen Stark as saying that “an ESM with a banking licence would be a clear violation of European law.”

http://www.sueddeutsche.de/wirtschaft/schuldenkrise-in-europa-eu-staaten-wollen-euro-schutzschirm-ohne-limit-1.1426870

2. Anti-democratic procedures and obscurity adopted by governmental leaders. The subject was discussed at what was a mixed meeting of EU heads of Government and States plus a Eurozone meeting of these leaders (which does not have legal status in the treaties.)

In this case it is not clear who is in charge. Is it the European Council, the Council of Ministers or a grouping of government ministers of the Eurozone? The latter, the ‘Eurogroup’ is an informal group according to the treaties. It is not a decision-making body.

3. Legal obscurity. Only the full Council is regarded as an institutional body for legal decision-making. Thus any decisions taken by the Eurogroup are legally dubious.

4. The euro is in crisis, we have been told, for the last several years. Now politicians say it is urgent and the new arrangements must be done rush, rush, rush. All this while the legal status is highly dubious. This tactic is unworthy of democracies and more common of tin-pot dictatorships trying to fool the public.

5. The European institutions and European national governments have a responsibility to act fairly, lay their cards on the table and take the public into their confidence as the leaders are supposed to be representatives of the public. Legal Opinions are owned by the taxpayers.

6. The EU leadership is presently in a critical low of public confidence, mainly because of lack of accountability of the EU budget, lack of proper accounting procedures where the EU budget has failed to be signed off. TRUST in the EU leadership has fallen to the lowest level EVER, 31%. http://ec.europa.eu/public_opinion/archives/eb/eb77/eb77_first_en.pdf

The European Union and Communities and intergovernmental conferences have institutions that are there for democratic discussion once information is supplied. The draft treaties have to be discussed for safeguards in national parliaments and other democratic fora before ratification.

7. The politicians – whether of the Council or the Eurogroup – have shown great reluctance to present relevant information to the public. I asked Council press officers on 30 January for the Legal Opinions. They did not have them to give me. Instead I was forced to ask via the website, which is more suited to historical archives than news journalism.

8. The response of the council is mechanistical lacking any sort of sense of urgency, proportion or public responsibility. It involves obfuscation and denial rather than democratic accountability, given the enormous sums of money and political implications involved.

9. Political leaders refuse to open a debate on this multi-billion matter. MEP Francis Wurtz said recentlyIt is not because votes in the Council are supposed to be public, or that debates in Parliament are obviously public, that democracy is safe. Everything possible is being done, not through negligence but as part of a strategic design, to avoid feeding understandable information to the man in the street and to avoid a debate on public ideas, in other words genuine grass-roots democracy. You just have to look around you! Speaking on TF1 on 9 September, François Hollande discussed the crisis and the budget, but he did not say a word about the treaty.

B. Legal position

a. Turco Case. European Court of Justice 1049/01 PRESS RELEASE No 43/08 , dated 1 July 2008

Judgment of the Court of Justice in Joined Cases C-39/05 and C-52/05 Sweden and Turco v Council and Others

THE COURT AUTHORISES, IN PRINCIPLE, ACCESS TO LEGAL ADVICE GIVEN TO THE COUNCIL ON LEGISLATIVE QUESTIONS

The transparency of the legislative process and the strengthening of the democratic rights of European citizens are capable of constituting an overriding public interest which justifies the disclosure of legal advice.

Mr Maurizio Turco said later: Democracy and the Rule of Law are based on publicity of the laws and of the decision-making process, hereby including all acts (proposals, amendments, discussions, votes, legal opinions, reports, etc) that are examined and contribute to the determination of a decision having effects on citizens. The EU, as well as Italy, has to guarantee these fundamental principles that allow for citizens to get closer to institutions and to participate in public life, following the principle that it is necessary to have the possibility “to know in order to deliberate“.

b. In’t Veld Case. European Court of Justice Sophie in’t Veld vs the Council

It was the General Court’s judgement in Case T-529/09 to annul the Council’s October 2009 decision insofar as it refuses access to the undisclosed parts of the requested document (11897/09) other than those that concern the specific content of the envisaged agreement or the negotiating directives and considers overall that both the Liberal MEP and the Council were “partially unsuccessful” in their endeavour. The parties will have to settle between themselves what can be disclosed.

Ms in’t Veld – who earlier this year drafted a report for the parliament’s civil liberties committee calling on MEPs to reject the EU/US agreement on the data transfer of flight passengers – described the ruling as “a step forward for transparency in Europe” which establishes a precedent that “negotiations on international agreements are not automatically exempt from EU transparency rules.”

Other ECJ judgement reinforce this requirement for the Council to share Legal Opinions. Publishing opinions is not only a treaty obligation, it is an obligation for democratic debate (TFEU #288) and elsewhere already cited in my correspondence with the Council.

c. Part of the Legal Opinion has already been published!

It is ridiculous and hypocritical to refuse access to any part of the Legal Opinion of the Fiscal Compact (TSCG). I have not been able to check what has been published in all 27 Member States but the following relates to the UK. The UK House of Parliament Library (UKHPL) Research Paper 12/14 of 27 March 2012 prints a number of extracts.

Council Legal Service Opinion

On 26 January 2012 the Council Legal Service issued an Opinion on the compatibility with EU law of draft Article 8 and related preamble recitals, based on the fourth treaty draft. The Legal Service answered four questions:

1. Can the procedure foreseen be described as a dispute settlement mechanism between Member States?

A Member State considering that another Member State had not complied with mutually accepted treaty obligations “is enough to be regarded as a genuine dispute between them” if one takes action against the other. The initiators are Member States, not the Commission, and the Member States could be in breach of their obligations under international law if Court not seized. “There is no convincing reason not to regard Article 8 as a clause that aims at settling disputes between Contracting Parties, which are Member States of the European Union”.

UKHPL research paper adds

N.B. Paul Craig disagreed with the Legal Service view that the Commission was not directly involved in bringing an action before the Court. A negative report from the Commission would trigger a mandatory obligation on one/more Contracting Parties to bring the recalcitrant state to the Court: “The reality is therefore that the Commission is still ‘bringing’ the action”.

2. Can the clause be regarded as a “special agreement”?

Member States can establish in advance “a mechanism that may be made use of, in predetermined conditions, if a dispute happens” but only if the “speciality” criterion is fulfilled. Article 8 fulfils this criterion because it refers specifically to violation of Article 3(2). The Court is limited to reviewing the transposition only of the balanced budget rule, to be accomplished according to a defined legal framework and precise timetable. Therefore, Article 8 conforms to Article 273 TFEU because it “merely anticipates possible incidents of which the nature, the limits and the time of occurrence are known with a relatively high degree of precision at the time of its conclusion”.

3. Do the issues to be brought to the Court relate to the subject matter of the Treaties?

The provisions Contracting Parties adopt must give legal effect to rules that apply within the framework of the “revised Stability and Growth Pact” (Council Reg. 1466/97, as amended by Reg. 1175/2011). This is in line with implementing EU policies, e.g. to strengthen EMU and “conceptually and practically inseparable” from EMU as established by the EU Treaties. “Therefore, although as such the control of the adequacy of national measures transposing rules established outside the Union is not an EU law issue, the assessments required would necessarily involve consideration of problems of EU law and must for this reason be regarded as ‘related to the subject matter of the Treaties’”.

4. Does the Court have jurisdiction to impose “sanctions” on Member States following an agreement between them to have recourse to Article 273 TFEU?

Article 273 TFEU does not exclude the capacity of the Court to impose penalties, but the capacity must be explicit in the dispute settlement clause as it cannot be presumed, as must the procedures, since they differ from Article 260 TFEU. Imposing financial penalties does not alter the nature of the Court’s responsibilities because Article 260 TFEU empowers it to impose sanctions. Article 8(2) therefore does not introduce “an element alien to its existing practice”. Although the violations here are not of EU law, they are closely related to EU law (see note 3 above). Also, it is the Member State(s), not the Commission, which asks the Court to impose penalties, which “does not significantly affect the conditions in which the case will be treated by the Court nor the exercise of its powers”. Article 8 “broadly anticipates the framework that will apply to the norm” when the substance of the new treaty is incorporated into EU law within five years of entry into force, “while being entirely compatible with the legal basis of Article 273 TFEU” before that time.

The Research Paper adds the following:

Craig did not think the Legal Service opinion was the end of the story, as the questions of principle and legality remained unanswered:

The issue of principle presented above nonetheless remains relevant, even if the consent to the use of the EU institutions by non-signatories to an agreement such as the SCG was unequivocal and even if there was no external pressure. This is because the issue of principle in paragraphs 1-6 above is not dependent on whether particular Member States at particular times are willing to allow it to be circumvented.

For Craig the proposition that institutional powers granted under the EU Treaties or EU law could simply be “cut and pasted” into a different, non-EU treaty was “not legally or politically tenable” and “The fact that an EU institution has power pursuant to the Lisbon Treaty or EU legislation to do certain things, cannot per se legitimate use of an analogous power pursuant to a different Treaty”.

The UKHPL research paper adds:

Arrangements for legal procedures under Article 8 TSCG

At the signing ceremony on 2 March, signatories agreed an annex to be attached to the minutes of the signing ceremony on the arrangements for bringing a matter to the Court of Justice under Article 8(1) TSCG. The Annex clarifies that an application to the Court will be made by the Trio of Presidencies as set out in Annex I to Council Decision 2009/908/EU of 1 December 2009 (assuming there are no criteria which would exclude any of these three States, in which case the applicants will be the former Trio of Presidencies), in close cooperation with all Contracting Parties. Technical and logistical support and costs will be provided by the Contracting Parties linked to the case in question. Sub-section 6 provides that, on the basis of the Commission’s assessment that a State Party has failed to comply with the Court’s judgment, “the Contracting Parties bound by Articles 3 and 8 of the Treaty state their intention to make full use of the procedure established by Article 8(2) to bring the case before the Court of Justice, building upon the arrangements agreed for the implementation of Article 8(1) of the Treaty”.

My Conclusions

 

  1. I initially asked for Legal Opinions on the ESFS Agreement between Euro Member States and EFSF Société Anonyme of Luxembourg, the ESM treaty and the Fiscal Compact. I am surprised that the Council says that it has found only ONE Legal Opinion related to the Fiscal Compact and nothing for the EFSF, the ESM treaties. This contradicts what I was told. I would ask the Ombudsman to investigate the matter to see if the Council or some of the Member States, acting separately from the Council as an institution, have indeed asked any Legal Services of any description to provide Legal Opinions and are hiding these by a form of words. For example the ESFS is not a fully Community or EU framework. Yet it takes the Commission (EU civil service) as its servant, says that English law applies and that Luxembourg Courts may be used for disputes (Art 16). The issues are serious. The ESM treaty gives complete legal immunity to its staff in their actions (articles 32,35) and is able to set its own tax rates (arts 5, 35). This is more than disturbing given the nature of the Euro crises. Government frauds, statistical fixing and other matters, which would be prosecuted as crimes in private companies, have been uncovered. Government action must be under control of democratic supervision and the law.
  2. The Fiscal Compact involves a great deal of taxpayers’ money and its use, and should involve multiple democratic controls. For this reason any Legal Opinion must be made public. So should any other legal opinion relating to pseudo-European bodies or companies.
  3. The Fiscal Compact Legal Opinion has at least in part been published by the UK House of Parliament Library and may have been published in part or in full by other democratic institutions. The refusal of the Council to publish it is contrary to ECJ judgements and normal democratic practice. Furthermore instead of publishing the document/s right away it has used the prolongations to refuse in the most uncooperative, undemocratic way possible.
  4. The information requested is urgent and necessary as it is apparent that the governments refused to follow the Community-based guidelines to create a Single Currency given in the Werner Report. They have sought to use European institutions to hide fiscal and monetary irresponsibility in their own governmental systems as is apparent from the crises in Greece, Spain, Portugal, Italy, Ireland, France and also Germany etc. The timely production of this information is necessary for a wider debate on the future of the Euro.
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