TheJournal.ie uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Click here to find out more »
Dublin: 10 °C Saturday 18 May, 2013

Column: Referendum or no, the fiscal treaty should go to the Supreme Court

This treaty will solidify EU control over Ireland, while most of our politicians are effectively silenced. We need a proper legal hearing, writes Dr John O’Brennan.

John O'Brennan

NOW THAT THE government has responded to Attorney General Máire Whelan’s report on the EU Fiscal Treaty by taking the decision to hold a referendum, the early skirmishing has revolved around the attempts by the left opposition to brand the treaty the ‘EU austerity treaty’.

Meanwhile, Taoiseach Enda Kenny and Minister for European Affairs Lucinda Creighton have said that support for the treaty is crucial to keeping Ireland within both the eurozone and the European Union.

Against this backdrop of a rather predictable political face-off, it is noteworthy that the missing link in the decision to hold a referendum is the Supreme Court – which has been singularly absent from Ireland’s engagement with the EU for most of the last quarter century. Unlike many member states of the EU, we have had no national judicial consideration of the relationship between national sovereignty and EU supranationalism. And in the light of the potentially far reaching consequences of ratifying the Fiscal Treaty, this is an intervention that was badly needed.

The European integration process has presented the most formidable challenge to the constitutional ordering of the domestic political architecture: vectors of so-called ‘Europeanisation’ have helped to re-configure the Irish political landscape in quite specific ways, and, as the ‘European’ layer of governance in Ireland has effectively overlaid the ‘domestic’, the practical institutional effect has been to contribute to a hollowing-out of the constitutionally prescribed functions of the Oireachtas.

Because over time more and more policy areas have ‘migrated’ from the national to the European or supranational level, the decision-making input and authority of purely domestic actors has been continually eroded. If the Irish people say ‘yes’ to the Fiscal Treaty, that pattern is likely to continue and may even accelerate

‘The fiscal treaty would mean a permanent oversight of Irish fiscal policy by EU authorities’

It is ironic that the absence of the Supreme Court from Ireland’s European journey stems largely from one of its own judgments, the celebrated Crotty case of 1987. The most important effect of the judgment was that, subsequent to its delivery, Irish governments interpreted the Court’s position to mean that all future changes to EU treaties had to be decided by popular referendum. The Supreme Court has had virtually nothing to say about the cumulative transfers of sovereignty to Brussels and the trajectory of ever deeper integration pursued by the EU via the treaties of Maastricht, Amsterdam, Nice and Lisbon.

There were two reasons in particular to support a referral of the fiscal treaty to the Supreme Court.

The first is the nature of the fiscal treaty itself and the fundamental change it portends in the management of the Irish economy. The fiscal treaty does not merely constitute an organic or benign evolutionary development in Ireland’s economic relationship with Brussels. If passed into law it would provide for a permanent and deeply penetrative oversight of Irish fiscal policy by EU authorities, embedding this external economic control in domestic legislation and specifying automatic sanctions for transgression which could condemn this country to lengthy periods of economic stagnation.

The fiscal compact is the latest (and may yet prove the most significant) in a series of EU supranational economic bargains that can only be understood as a form of advanced ‘Europeanisation’ of the domestic legislative landscape. A Supreme Court judgment on the fiscal compact would have thrown light on these evolving fiscal arrangements and determined whether they were compatible with the principles of sovereignty enshrined in Bunreacht na hÉireann.

‘There is an overwhelming imbalance in power between the government and the Oireachtas.’

As importantly, a Supreme Court hearing might also have helped define the parameters and deeper long-term significance of Ireland’s constitutional relationship with the EU. In particular the Court might have clarified the responsibilities of and relative balance of power between our domestic political institutions with regard to European affairs. This is especially crucial because of the current overwhelming imbalance in power between the government and the Oireachtas.

Here we should take note of the practice in other jurisdictions where both the courts and national parliaments play a much more prominent part in EU decision-making. The Danish government is constitutionally obliged to take instruction from the European affairs committee of its national parliament, the Folketinget, when it negotiates with EU partners. Thus Danish MPs have an input into EU policy – which their Irish counterparts in the Oireachtas can only dream about.

The balance of power between the institutions of state is also much more nuanced in Germany, where the Constitutional Court has been a visible and increasingly assertive actor within the domestic processing of EU affairs.

Most recently, in September 2011, the Court ruled on three lawsuits brought by prominent lawyers and economists against Germany’s participation in the EU bailout of Greece. Although the court rejected the substantive claim of the litigants, it also handed them a partial victory by insisting that the Bundestag be given a greater role in any future bailouts and – more generally – in German decision-making on EU issues.

The German case demonstrates a clear attempt to claw back power from the EU to the national level of decision-making, and also highlights the extent to which national parliaments have become ‘victims’ of the European integration process. Within individual member states this has manifested itself in the control of EU policy-making by a narrow stratum of executive and bureaucratic actors and the marginalisation of national parliaments as arenas of oversight and scrutiny of governmental activity at EU level.

‘There has been little or no room for the Oireachtas to assert itself’

In Ireland it is clear that the Oireachtas is failing miserably in its duty of control over the executive. Professor Michael Gallagher has noted that with regard to the Dáil that it is only a slight exaggeration “to say that all legislation passed by the Dáil emanates from the government, and that all legislation proposed by the government is passed by the Dáil.” Dáil debates are widely viewed as “dialogues of the deaf” with little incentive for opposition parties to engage constructively and the “Dáil cannot be seen as an active participant in the process of making laws, let alone broader policy”.

Ireland’s membership of the EU has re-enforced existing tendencies toward governmental control and EU policy-making in particular has been overseen by a combination of the departments of Foreign Affairs, Finance and An Taoiseach, assisted by a highly effective civil service. There has been little or no room for the Oireachtas to assert itself, whether in the early stages of policy initiation or the later stages of implementation. This is no small matter of concern as we set out on a fifth EU referendum campaign in just over a decade and one that will unfold against a backdrop of unprecedented economic uncertainty.

So a Supreme Court hearing, brought under Article 26 of the Constitution, would have promised to bring much-needed clarity to the debate on how to ratify the Fiscal Treaty.

In doing so the Court would also have had the first opportunity in almost quarter of a century to consider the compatibility of Ireland’s EU commitments with Bunreacht na hÉireann and the different ways in which EU membership has helped re-configure the domestic political landscape. If it had taken its cues from Denmark and Germany this might well have resulted in a strengthening of the Oireachtas’ ability to control the government in EU matters. This would have been no bad outcome for Irish citizens.

Instead we are facing into a referendum campaign that threatens to bring forth much more heat than light. A win for the ‘Yes’ side in the referendum may indeed provide much needed stability for Ireland within the Eurozone economy. But it may well come at the price of yet again increasing the ‘legitimacy gap’ which characterises EU politics – both at home and EU-wide.

Dr John O’Brennan is a lecturer in European Politics and Society at NUI Maynooth. His email address is john.obrennan@nuim.ie.

Read next:

Comments (31 Comments)

  • The problem is, who would bring it to the Supreme Court? I’d be all for the Court to examine the giving away of our sovereignty but the spineless political parties who are only to ready to cede our hard won independence to another foreign Empire. If the shinners bring it then you will have the usual morons on here and in the press who will go on the attack, not because of the court challenge, but because they hate sinn fein so much that they would be willing to cut off their nose to spite their face. Personally I have no love for SF or any other party but I would support anyone who finally has the balls to stand up and challenge Europe and the gutless wonders who bow and beg at Merkozys feet while doffing their caps and selling us out.

    Reply
  • Great article. It seems that successive governments refuse to acknowledge the incremental erosion of our constitution by the European Union. As a nation we need to take a step back at ask ourselves where is this EU project heading? And at what price does it come?

    Reply
  • Excellent article. How does an Article 26 Supreme Court hearing come about?

    Reply
  • Just a quick comment on the remarks in this thread about the IMFs treatment of Ireland and their comments about how we’re being treated by the other troika members.

    When the IMF are the good guys in the room, you know you’re being royally fu€ked by everyone else.

    Reply
  • I’m rather perplexed how the Supreme Court is supposed to rule on the constitutionality of an amendment to the constitution.

    Re: Article 26 and the Abortion Information Bill [1995] 1 I.R. 1 holds that the sovereign will of the people as expressed in referendum in accordance with the requirements of the constitution is not subject to court review.

    I’m rather concerned that a person can be a lecturer in politics and not know this.

    Reply
    • FYI Mr Shhehan. The piece was written before the government called the referendum. The article was predicated on an assumption that the government’s preference would be to ratify the Treaty through the Oireachtas rather than by popular referendum. And in fact the headline I wanted used was ‘Decision to hold a referendum constitutes a missed opportunity’. The editorial team in their wisdom decided to go with a headline which makes it look like I do not know the condidtions under which an Article 26 referral can take place. I can assure you I do. The more important point is about the effective removal of the Supreme Court from the process by the decision to hold a referendum. And the complete absence of our national parliament from the EU decision-making process in Ireland. People wil have different views as to whether patterns of Europeanization are good or bad for Ireland. My own sense is that they have been (up to now) overwhelmingly positive. The Fiscal Treaty may change that dynamic. It may not. What is absolutely clear however is that the ‘democratic deficit’ which attaches to European affairs in Ireland is set to increase irrespective of whether the people have the right to approve the treaty in a referendum.

      Reply
  • John consistently uses the word Europeanisation as if it is a dirty word. It is our politicians and regulators who oversaw the waste of our resources and have saddled us with crippling debts. The legal profession will only be interested in whether a treaty is legally compliant, not whether it is good for the people of Ireland. A referendum gives us the people a chance to speak. We should get to decide whether closer supervision of our economy by Europe is in our interests or not.

    Reply
  • I’m rather surprised that Dr O’Brennan doesn’t seem to understand that referenda make things constitutional.

    Reply
  • Irish elections of MEPs are treated as warm ups for a run at being aTD. Irish MEPs have quit their seats to contest for the Dail and get elected. Is it any surprise if people feel they’re being treated with indifference by the EU when we’ve exhibited a similar attitude towards european partnership?

    Reply
  • skeolawn 16/03/12 #

    Several people think we should continue on our current path, and that we have no other viable option. Can one of you explain why – how do you think we will eventually recover from the mess we’re currently in?

    Reply
  • Neil 15/03/12 #

    And then who do we borrow from (and at what rate) to have the best paid lecturers and professors in Europe?

    Reply
    • You have heard of the IMF Neil?

      Reply
    • There is always some way of borrowing from somewhere. The EU can’t afford to let us go belly up as the Euro would collapse. The thing is that if we did have to borrow we would be doing it as a sovereign, self governing, proud Irish nation and not not some subservient statelet where people put money before their Irishness.

      Reply
    • Neil 15/03/12 #

      The IMF that want more cuts targeting the elderly? That´s a real vote winner there Kerry.

      Reply
    • Neils right, anyway the IMF and ECB are the same entity, theyre just playing good cop, bad cop. The only place we could get money off would be possibly the BRICS but the terms would probably the same, assets and high interest. Personally i think we should default and start the chain reaction to bring the monetary system down, its just a ponzi scheme and start again with a proper system. Either way a lot of fucking pain but long term there is only 1 way to go.

      Reply
    • Indeed Neil the same IMF that are charging us the lowest interest rate, the same IMF who agreed that senior unsecured bond holders should have been burned and the same IMF who agree that the promissory notes payment schedule and interest rate have to be changed. The IMF have come a long way from the days were (like the EU/ECB currently) they only preached austerity. Time to stop hiding behind the ‘who will lend us money’ quote and look at what is happening to Ireland and discuss how it can be changed.

      Reply
    • Neil 15/03/12 #

      Here we go, those preaching that they have an easy alternative to austerity. That they have a way forward that does not involve massive wage cuts or cuts in social welfare or increases in taxes. Those nice people at the IMF will throw money at us at low rates of interest no problem at all. They don´t care about funding huge budget deficits year after year.

      The IMF are no charity. Anyone saying they are an alternative to austerity is a liar. Ask Latvia.

      Reply
    • I think an Irish default could be contained. We don’t have a gun big enough, a la Spain or Italy.

      A disorganized Greek default would have been far more serious and it could have happened without bringing down the system, man.

      If we default, we will be on our own, living on our means, with a useless punt and sky high interest rates. The IMF have been more in our corner than our so called partners but they will drop us like a hot snot if we try to go it alone. They would have to as a warning to anyone else who was thinking default was a good idea. In the long run, say 10 years, default would probably work out best from a pure economic point of view; however, the social collateral damage in those 10 years, to the marginalized and dependent on State services, would be enormous. This is not a price I am willing to pay.

      Reply
    • Donal
      I expect there would be a measure of collateral damage to our ability to make bond payouts and promissory thingy payments too. I just wonder which is of most concern to the corporately financed political establishment of Europe and Ireland?

      Reply
    • John, you may not realize but the promissory note is not real money. Burning it has no losers.

      And yes, a default means we don’t pay back our bond holders. That’s not collateral damage, that’s just the definition of a default.

      I’m not sure what you mean by your question though. The Troika are lending us money to sort out our banking mess AND fund our health, education and social welfare systems. If we default, both those things will stop.

      Reply
    • @ Neil, Donal & others.

      If we were to leave the Euro we’d have no need to borrow from anyone. Our own currency means by definition the ability to create all the currency we need to finance our economic recovery. The strength of our export sector suggests that a new ‘punt’ would quickly settle to a near value with the Euro. Leaving the Euro is an extreme step but it is doable & once past a short period of ‘uncertainty’, day to day life resumes.

      Please do understand that the MACRO economics & monetary system of a nation with its own currency are NOT like your household or business.

      But, the real point is that we should seek first to use this option as the negotiating point it should have been all along. ‘Partnership’ means give and take. From the beginning of the financial crisis our useless political leaders have negotiated NOTHING. It has all been dictated to us by the ECB, EU Commissioners & Merkozy.

      As economist Ronan Lyons pointed out here last week, fiscal space is a vital tool to provide stability in the ups & downs of the natural business cycle. Arguably, without it, ‘Sovereignty’ is meaningless. If we’re going to give it all to the ECB/EU authorities, which is what this ‘pact’ does, why bother with the Dail at all? might as well just run it like a local council with a County Manager reporting to Frankfurt/Brussels.

      The Euro system is a failure for citizens. It clearly serves only the top few percent & the bankers who designed it. If we don’t push back now & demand properly negotiated reform we can look forward increasing debt servitude & high & wasteful unemplyment in perpetuity. We do have choices, but our politicians will not take notice of us unless we demand it.

      Reply
    • Mike, that ‘create all the currency you need’ thing worked out well for Zimbabwe, didn’t it?

      Reply
    • Thanks Donal.
      What I realize is this, the combined value of these promissory notes when taking account of the cost to the state of recapitalizing Anglo and Irish Nationwide is in the region of over 30billion! I also realize that in layman terms these promissory notes are just posh IOU’s. issued upon the basis of the imposition of extreme measures to extract the money from the citizens of this country.
      Donal, I want my efforts and the efforts of my family to contribute to the state and themselves and not the futile attempts to capitalize a corruptly managed, failed bank that was once privately owned and run as one man’s (Sean FitzPatrick’s) personal fiefdom.

      Reply
    • Donal
      I also understand that these promissory notes are nothing other than a form of government bond issued in respect of it’s arrangement to capitalize a private institution and not the sovereign entity where it’s true obligation lies – hence the definitional difference. In all other respects, particularly regarding the burden on the state, the effect is just the same.

      Reply
    • John, once we nationalized Anglo, it became part of the sovereign entity.

      I am 100% in favour of the Promissory note being torn up; however, we don’t have the option to do it unilaterally without also defaulting.

      Some people seem to be arguing that the consequent social collateral damage that will result from a default is a price worthy paying. I disagree.

      Reply
    • @ Donal

      It’s rather stupid to conflate Ireland with Zimbabwe.

      There’s no great mystique about inflation. It arises when there is more money available than goods or services to be bought – ie productive capacity. Zimbabwe’s productive capacity had collapsed when all the white farmers were evicted. Ireland’s has not, rather it is deflating because money is being siphoned off to pay Europe’s banksters for ‘odious’ debt we citizens do not owe. We have plenty of idle resources & labour to be purchased at present without risk of inflation.

      Whether a country borrows external money (from IMF or other) to add into an economy or creates it with its own currency issuance authority makes no difference whatever to the inflating potential of that money.

      The point being we would not ‘need’ to borrow to finance recovery with our own currency.

      It is a simple matter to regulate the flow of money into an economy to ensure near full employment & price stability. As that point nears, and inflation risk increases, the flow of money is stopped or reversed by moderating gov spending or increasing taxation.

      In practice this already occurs in countries like the US or UK with sovereign fiat currencies. Whilst they pretend some need to ‘borrow’, public debt is rarely, if ever, actually repaid at all, & hasn’t been throughout their history. Debt is merely rolled over. Economic growth looks after the interest burden. As they have their own currency tho’ & can never go ‘bankrupt’, they dictate the interest rate, not private banking ‘markets’.

      But macro economics & monetary systems isn’t your strong point is it?

      Reply
    • Donal
      Once we nationalized Anglo and Irish Nationwide their debt/under-capitalization became a sovereign entity, they are still incorporated as PLC’s just like NAMA and other such like leeches upon the state.
      In simple terms the structures that were set up to patch holes in the private commercial sector of our economy are sucking the life blood out of the national economy and, in my opinion default is not alone preferable but eventually inevitable in some form or other

      Reply

Add New Comment