The past two weeks have seen a dizzying array of proposals from virtually every organ of the EU claiming that they can make the eurozone more efficient, durable, and solvent. If you noticed that no one is saying that they will make the eurozone more democratic, you're not the only one. And the most anti-democratic organ which is being set up is a permanent bailout fund, the European Stability Mechanism (EMS).
The ESM will not only be a permanent bailout fund, it will have the ability to raise funds from member states without democratic accountability, while also making it impossible to leave the eurozone if the rest don't want you to.
The ESM is intended to replace the current bailout fund, the European Financial Stability Facility. The ESM was signed in July of this year and is expected to be ratified sometime in 2013 by the signatories. It purports to enshrine for all time the various legal inadequacies of the EFSF.
The ESM will raise 700 billion euro from eurozone members in pro-rata shares by GDP. The Board of Governors is made up of finance ministers of countries that do and do not get bailed out as well as who does and does not get punished for not paying their share, and vote mostly by qualified majority. Member state contributions are mandatory, the obligation to pay enforceable in the European Court of Justice. Contributions can be raised without limit if the Board of Governors agrees. All future members of the euro must sign on to the ESM.
Ominously, these obligations are to be permanent. "ESM Members hereby irrevocably and unconditionally undertake to provide their contribution to the authorised capital stock" (Article 8(4)) and to "pay," not guarantee, certain capital calls voted on by simple majority within seven days (Article 9(3)). This provision does not seem to fit with the manifest ability of member states to leave the Union and the euro simultaneously. If the obligation already undertaken is really irrevocable, what contributing country would ever leave the eurozone if it could?
The practical effect of such arrangements is that the eurozone configuration of the Council of Ministers (or Council of the European Union) has just increased its powers grandly without a vote as the treaties call for.
It's the member states paying in that lose, both by the creation of another huge bureaucracy inside the Union not all have agreed to, and in the knowledge that the Union can effectively now tax them directly, redistribute the money the way finance ministers alone see fit, and call it a bailout.
The document takes power away from national legislatures. Imagine if all finance ministers agree to raise the total subscription amounts from 700 billion to 1 trillion euro. Each country would have seven days to pay. No legislation will be needed to relieve a member state of its money, so the legislature and accordingly the citizenry are without recourse to decide whether to keep its money.
An aggrieved national population, assuming it is even made aware of the transfer, has only one arrow in the quiver: replace the government in the next election. This is a very blunt instrument indeed given it would be only one of many issues upon which an election could turn. Thus heads of state, and of course their finance ministers, have little to fear by giving away their people's money by this method.
Further, the ESM, though founded during a crisis, is not an emergency provision. Maybe France and Germany will amend the treaties over the next couple of years to backfill the glaring impropriety of the origin and substance of the ESM to make it seem more legitimately wrought. But if this is the state of things to come in December, democracy is in for as rough a ride in Europe as national pocketbooks.
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The Lisbon Treaty governs the 27 nations, not only the 17. But why should the 10 non- Euro members, especially those who clearly opted out of the Euro, have a vote and a say in how the Euro countries run their currency and budgets?
Why should members of the European Parliament from countries that have not joined the Euro have a vote and a say in budget decisions of the 17 member countries? Or - for example - an EU Commissioner as kind of a Financial Minister who's not a representative of a EZ member country?
Must, on the other hand, the European Union only ever go as far as the most reluctant member (UK?) allows or can't the other nations, in their own, sovereign decision they that they integrate further than the UK wants? Or, to phrase it differently, by what right should Downing Str/ Westminster have a say in the international affairs of other nations?
Last but not least: How about the demographic and legitimization problem that a fully legitimated must be elected on the principle "one person, one vote"? Given the sheer size of France and Germany in comparison to, let's say, Luxembourg, Malta and Cyprus, the smaller countries would have a hard time to be represented.
To do nothing, to stick, like Mr Cimbalo suggest, to the very letter, the strictest interpretation of the Lisbon Treaty and only act if the treaty was amended in no uncertain terms would simply mean to cave in to the euroskeptics and let the whole EZ and most likely the EU collapse completely and return to 27 national states. I am not sure if a majority of Europeans would prefer that; polls suggest otherwise. Also, it would have certainly a devastating effect on all economies if the union crashes.
"The document takes power away from national legislatures."
This is not (necessarily) the case - just look at the example in Germany. First of all, the agreement has to be ratified by the 17 parliaments into national law. We have representative democracies, not direct democracies so this is (like with all international treaties) due process and fully democratically accounted.
Secondly, the provisions of the German law (after a ruling by the Federal Constitutional Court) only give an imperative mandate to the Financial Minister; in other words, he is bound regarding each vote and each decision, to a preliminary vote either by the parliament as a whole or by the parliament's budget committee. He has to vote exactly like the parliament tells him; he's not free in his decision.
What will the other eurozone countries do?
Declare war and invade the departing country?
All these SOVEREIGN nations....and they all got mixed up with this eurozone business.
Who will really rule over all these countries?
Germany?
And is it even possible?
(Which I highly doubt.)
I predict political and social unrest sooner or later if the taxpayers of the strong countries get stuck bailing out the weak countries while suffering from the bad economy at home.
"Liberte" is foundationally incompatible with the European understanding of "Egalite", and the European character is one that prefers a meagerly fed peasant existence to a hard-scrabble independence.
The current situation, and the inevitable arc it is traveling, will not surprise even the most casual readers of history.
An agreement between the Greek government and the other 16 EZ governments which would provide Greece with money (they else can't raise) to keep their government/administration/public services afloat. Receiving the money was conditionally (I'd at any time freely debate if the conditions or what the Greek government makes of them are smart or fair, but fact is, they were there).
Then there was a narrow frame of time: Greece was about to run out of money in mid- December at the latest.
So, let's say the Greek government had organized the referendum in early December. Any referendum could only have been binding about the Greek part of the agreement. The Greeks hardly could, by referendum, decide that their part of the agreement was invalid but that the part of the other 16 (=providing the money) would have had to happen anyways.
Had the Greeks voted down this agreement, the EZ governments would have had to renegotiate (and ratify) another one. And if we follow your logic, this too would have been put to a Greek referendum. By that time, mid- December would long have passed and Greece would have been without money and in default.
What about the people in the other EZ countries; you could equally well say that if Greeks can hold a referendum on their part of the deal, why shouldn't the French, Dutch, German, Finnish, Austrian and all the others have a referendum if we want our governments to loan money to Greece?