The Express reports: “DAVID Cameron was under mounting pressure last night to hold a referendum on EU membership amid claims that the Coalition is paving the way for full eurozone financial integration.” Bill Cash was quoted as saying: “Allowing the other member states to go ahead towards fiscal union is a disaster. We must have a referendum in the light of such a profound change in our political relationship with Europe.”
Bill Cash was also quoted by The Observer.
It was also reported that the European Scrutiny Committee will conduct an inquiry into the effect that fiscal union for the eurozone would have on the UK's economic independence.
thanks. good to know.
It is now five months since March 25th, when David Cameron quietly agreed to a radical amendment of the EU treaties wanted by at least some of the eurozone countries, without asking for or getting any quid pro quo to protect, let alone advance, our own long term national interests.
The treaty change was agreed through European Council Decision 2011/199/EU, which may be read here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2011:091:0001:0002:EN:PDF
It was agreed under one of the simplified treaty revision procedures introduced by the Treaty of Lisbon, Article 48(6) TEU, and consequently under Section 3 of the “referendum lock” law, the European Union Act 2011, the UK cannot finally ratify the Decision until it has been approved by an Act of Parliament.
However under Section 4 of that Act a referendum is not legally required, and the government has already stated that it does intend to hold a referendum.
Over the past five months the UK media have hardly even mentioned that this treaty change has already been agreed, let alone discussed its potential implications.
In essence the effect of the amendment would be to insert this paragraph into the EU treaties:
“The Member States whose currency is the euro may establish a stability mechanism to be activated if indispensable to safeguard the stability of the euro area as a whole. The granting of any required financial assistance under the mechanism will be made subject to strict conditionality.”
Clearly this takes the form of a licence which the 27 EU member states as a whole are granting to a class of EU member states, the (now) 17 EU member states in the eurozone:
“The Member States whose currency is the euro may … ”
so that EU law would then permit them to “establish a stability mechanism …” etc.
Of course the very fact that it is considered necessary to quietly change the EU treaties so that henceforth the eurozone states “may establish a stability mechanism” confirms that the stability mechanism they have already established, the European Financial Stability Facility or EFSF, lacks any legal base in the present EU treaties – which is also indicated by the notable absence of any of the usual legal citations in the relevant Decisions taken on May 9th 2010, and the fact that careful searches fail to locate those Decisions recorded in the EU’s Official Journal or in the Eur-Lex database of EU law.
Unlike the first post-Lisbon treaty change, which was needed to sort out a legal pickle over the numbers of MEPs, this cannot be considered a trivial or technical amendment.
Bearing in mind that Christine Lagarde, then French Finance Minister and now head of the IMF, described the actions agreed on May 9th 2010 as “major transgressions” of the present EU treaties, which are “very straightforward – no bailing out”, clearly a treaty change to legitimise similar actions in the future must be seen as a major treaty change, and assenting to that major treaty change without getting anything at all in exchange must be seen as a correspondingly major concession on the part of the UK government.
There is the important, so far unaddressed, question of the eventual extent of the licence which the EU member states may be unwittingly granting to the eurozone states by agreeing to this EU treaty change.
Ostensibly the purpose is restricted to setting up something rather like the EFSF, but legally and permanently, but with creative interpretation of the wording of the amendment the eurozone states could go far beyond that.
And here the crucial point is that interpretation of the terms of their licence would rest with the eurozone states themselves in the first instance, and ultimately with the EU’s Court of Justice, and the governments of non-euro states such as the UK would be inhibited from interfering with whatever the governments of the eurozone states might agree to do among themselves, arguably even if what they were proposing to do would breach other parts of the EU treaties, provided only that their actions and the immediate consequences appeared to be confined to the eurozone.
Therefore those who assume that euro-integrationist measures such as “eurobonds” or a “fiscal union” or a “transfer union” would require further changes to the EU treaties, when the UK government would have the opportunity to extract concessions and re-patriate powers in exchange for its agreement to the desired treaty changes, could well be mistaken.
Provided that such measures were confined to the eurozone and did not apply across the rest of the EU, then the relevant treaties would not involve all EU member states but would be made between just the eurozone states.
Such as this one, a Treaty establishing the European Stability Mechanism:
http://consilium.europa.eu/media/1216793/esm%20treaty%20en.pdf
which the eurozone states are hastening to erect on the new legal base in the EU treaties, even before that legal base has actually been provided by the EU treaty amendment which was agreed on March 25th but which has not yet been ratified by all EU member states and come into force.
The UK would have no involvement in those intra-eurozone treaties, and no veto over them, and therefore no leverage at all for extracting any concessions even if the UK government was disposed to do so.