The IMF and Article 6 of the Constitution

later12

Now the question of whether the IMF need to be here, or need to be here at this time, is one thing. My question relates to the constitutionality of their influence over the current government based on the following Article, Article 6 of the Constitution of Ireland

Article 6

1. All powers of government, legislative, executive and judicial, derive, under God, from the people, whose right it is to designate the rulers of the State and, in final appeal, to decide all questions of national policy, according to the requirements of the common good.

2. These powers of government are exercisable only by or on the authority of the organs of State established by this Constitution.

Now, firstly, it is clear that the IMF and indeed the EU are not directly ruling this state.

But could it not be argued that in the course of negotiations they do have a stronger hand than the government on our governance. They are perfectly entitled to refuse to lend money to the state if the state refuses to adhere to their advice on such governance. In such a situation, we would, undoubtedly, 'go broke' because the idea of bondholders investing money in us if the IMF wouldn't, is a joke.

The IMF, therefore, being of a stronger disposition to command governance, in that they are the people who control the purse strings, are at least our partial rulers if not our ultimate rulers.
Yet we have not chosen them, and surely it is not within the constitutional remit of the Government to hand over or to share governance, partially or wholly, to any other organisation or union other than that which has been directly elected by the people.

By the way I am not anti-IMF. I am just questioning the constitutionality of their influence, directly or otherwise.

PeterIanStaker

I didn't vote i.e. choose FF, but they still manged to make a hames of things.
Besides, the 1937 constitution is so worthless at this stage, I may nearly follow Kerrigans' lead and burn the thing. Never thought I'd write that, although I know who to blame.

later12

PeterIanStaker wrote: »

I didn't vote i.e. choose FF, but they still manged to make a hames of things.

Yes, but the people did and the article, and other articles like it in setting out our sovereignty and our status as a democratic independent country, refers to the people appointing the leadership.

Scofflaw

The state has the right to reject any suggestion or condition made in respect of the bailout - the price is not getting the money. The question of constitutionality doesn't arise in that sense, but one could make a case that the government cannot accept certain conditions without a referendum.

cordially,
Scofflaw

PeterIanStaker

A referendum to accept the bailout? Can you imagine? FF would be the "no" side.

later12

Scofflaw wrote: »

The state has the right to reject any suggestion or condition made in respect of the bailout - the price is not getting the money.

Of course, the state has the right but realistically is in no position to turn down serious IMF demands with regard to governance. If they do, the state will run out of money and be unable to find any source of sustainable finance.

I have mentioned in my OP that of course, this IMF ntervention only amounts to influence. However the magnitude and the sheer strength of that influence is far more serious and more great than anything we have ever encountered in our history as an independent Republic.

The loss of our autonomy is simply unquestionable at this stage. The nature and legality of that loss of autonomy is what is questionable.

Hogzy

PeterIanStaker wrote: »

A referendum to accept the bailout? Can you imagine? FF would be the "no" side.

I dont think anyone would vote no if we REALLY do need this bailout.

later12

Probably not, but you can never underestimate public anger. Anyway, the bailout is possibly necessary, but at least inevitable. I'm just talking about the constitutionality of the government's negotiations with the IMF.

Hogzy

later10 wrote: »

Probably not, but you can never underestimate public anger. Anyway, the bailout is possibly necessary, but at least inevitable. I'm just talking about the constitutionality of the government's negotiations with the IMF.

Perfectly consitutional. Its not as if the IMF is coming in to make its own decisions and telling the Legislature/Judiciary and Executive to F off. They will only be recommending. They cannot force us to do anything as that would breach our sovereignty. However their recommendations will have a heavy weight because if Ireland dont play ball, we wont get money.

Also the fact that the introduction of the IMF is MASSIVELY in the common good there isnt much of a constitutional argument.

TBH im kind of welcoming the IMF. They will more than likely make decisions our government wont make because they are scared to upset someone.

The IMF will make fair decisions IMO. They are neutral in political leaning which for one thing will be a positive in this FF run country.

PeterIanStaker

Hogzy wrote: »

I dont think anyone would vote no if we REALLY do need this bailout.

Do not underestimate the stupidity of both FF and the percentage that will still blindly vote for them.

Hogzy

PeterIanStaker wrote: »

Do not underestimate the stupidity of both FF and the percentage that will still blindly vote for them.

I know, for the first time ever i trust Sky News more than RTE about our own national affairs. When every news station in Europe was talking about our economic situation RTE didnt seem to give much of a toss.

I feel im being lied to by the government.

Week 1 "Ah sure were grand" - FF
Week 2 "We are not in talks with the IMF" - FF
Week 3 "We are talking with the IMF but we dont need a bail out" - FF
Week 4 (Probably next week) "We need a bailout but only a small one" - FF

Week 5 Country for sale. 500,000,000,000 ONO.

up them Schteps

Hogzy wrote: »

TBH im kind of welcoming the IMF. They will more than likely make decisions our government wont make because they are scared to upset someone..

The Irish government have austerity measures in place already to be brought in, in the new budget. The IMF don't need to be in Ireland until at least the middle of next year as we have enough bonds issued this year to see us through until next year. The IMF is here 5 months too early imo!

The government have already made strong cuts in the last year, even the EU has praised the depth of the cuts and even stricter measures will be introduced when the budget is announced.

PeterIanStaker

I know the feeling. I've http://bbc.co.uk/news bookmarked.

meglome

up them Schteps wrote: »

The Irish government have austerity measures in place already to be brought in, in the new budget. The IMF don't need to be in Ireland until at least the middle of next year as we have enough bonds issued this year to see us through until next year. The IMF is here 5 months too early imo!

The government have already made strong cuts in the last year, even the EU has praised the depth of the cuts and even stricter measures will be introduced when the budget is announced.

We probably had two and a half years to make some hard decisions. The government didn't make them and it dragged out, thus costing us a shít load of extra money. They (or you) can spin it otherwise all you want.

up them Schteps

meglome wrote: »

We probably had two and a half years to make some hard decisions. The government didn't make them and it dragged out, thus costing us a shít load of extra money. They (or you) can spin it otherwise all you want.

Your letting emotions flow there but realistically the government (who I don't support) should not even be talking to the IMF cause we don't need them yet. The recent rise in the bond yields was caused by the german chancellor's comments. If she kept her opinions to herself the the IMF would not be in so early to pre-empt the problem we will face trying to issue bonds next year cause we are now in junk bond status.

meglome

up them Schteps wrote: »

Your letting emotions flow there but realistically the government (who I don't support) should not even be talking to the IMF cause we don't need them yet. The recent rise in the bond yields was caused by the german chancellor's comments. If she kept her opinions to herself the the IMF would not be in so early to pre-empt the problem we will face trying to issue bonds next year cause we are now in junk bond status.

Nope I'm pretty calm about it. I saw the government faff around when this whole thing started in 2008. Hard decisions could have been made but the only way they know how to do anything is to throw money at it. So they ran around like headless chickens until they were forced to make a decision at each stage. I think the bonds might have more to do with the fact the ECB was buying our bonds and not the open market. Personally given our governments track record I'll happily take the IMF/ECB.

up them Schteps

meglome wrote: »

Personally given our governments track record I'll happily take the IMF/ECB.

Me too. There really isn't any alternative government in Ireland imo. Just as long as we don't lose the corporation tax!!

Also saw this the other day, very sobering! It's not just Ireland who is in trouble Europes Debt Bomb

Hogzy

up them Schteps wrote: »

Me too. There really isn't any alternative government in Ireland imo. Just as long as we don't lose the corporation tax!!

We wont. Unless the IMF and other states never want to see a dime of the money they might have to give us.

Merkel changed her stance on the raising of the Corp Tax anyway. She seems a little stupid tbh(in an all round sense)(linky)

later12

Hogzy wrote: »

Perfectly consitutional. Its not as if the IMF is coming in to make its own decisions and telling the Legislature/Judiciary and Executive to F off. They will only be recommending.

The IMF will make fair decisions IMO. They are neutral in political leaning which for one thing will be a positive in this FF run country.

But I am not saying anything differently. I reiterated a number of times that the IMF are not the Government of this country, nor are they directly ruling this country. Furthermore, the question of how beneficial they shall be for the state's economic future frankly has nothing to do with the issue of constitutionality.

I am simply stating that in a financial transaction between the IMF, the European Union and the Irish Republic, there would, one would presume, be some sort of contract, stipulation or formal understanding that the Republic will amend policymaking to suit the conditions of the loan, or bailout.

This would, would it not, be indicative of a new departure in the command of the economic policies on this Republic. i doubt anyone seriously denies that the IMF intervention is a loss of autonomy at this stage.

The bailout of Greece has also been a point of constitutional debate in that country and also in Germany, whose constitution pledges to preserve private property and uphold social fairness. I'm just wondering if, depending on the nature of the bailout agreement, the same might apply here, whereby the Government might be interpreted as putting our governance up for sale or acting in contradiction with Article 6 of the Constitution.

Whether that is to our benefit or not is another issue.

later12

By the way, a statement on IMF conditionality as it is relevant to our Constitution

PDF: http://www.imf.org/External/np/pdr/cond/2002/eng/guid/092302.pdf

The IMF provides financing to assist a member country to resolve balance of payments problems. IMF conditionality specifies how the Fund’s financing will be linked to the member’s implementation of an adequate program of policy adjustments in response to its external imbalances.

- Taken from the International Monetary Fund's Statement on Conditionality

later12

hogwort wrote: »

They cannot and it is not within their remit to re write the irish constitution,or anything to that degree,however they can excercise control over what our government may and may not fund

Nobody is saying they can rewrite or interfere with the Constitution.

Yes they can influence Government. The question I have is to what extent does this influence amount to control, if any, and whether a formal agreement between the IMF, the EU, and the state would itself be constitutional.

,i would GLADLY HAVE THE IMF IN ANYDAY THAN THE BONDHOLDERS ANYDAY,AND WE DO NOT HAVE THE CHOICE NOW EITHER..

Well actually it has not been established that we cannot approach the international bond markets, or that we couldn't have had done so prior to IMF intervention. To date, we have never had a problem raising funds - we've just had to pay more for these funds.

Again I'm not necessarily anti IMF, although I do question the necessity of their arrival so soon. In any event, even if they are a great thing for the economy, the country or anything else is immaterial to the question of constitutionality.

PeakOutput

later10 wrote: »

This would, would it not, be indicative of a new departure in the command of the economic policies on this Republic. i doubt anyone seriously denies that the IMF intervention is a loss of autonomy at this stage.

nope because the goverment can choose to let the country go bankrupt

they can then choose to leave the euro and go back to the punt which they can control

if the goverment thinks that that is not the best thing for the country then the only other option is the ecb and the imf(if we run out of money before the bond markets regain confidence in us)

all of these things are the choices of the goverment which they were elected to make nothing is being forced on anyone

if i understand things correctly this is how it is going to go

the imf and ecb are talking to the goverment and telling them what needs to be done as they see it in this budget

the goverment can choose to heed their advice or not

after the budget(weather or not we took their advice) we wait and see if the bond markets become an option again

if they dont then we have to go to the ecb and imf and if we are in a worse and if we didnt heed their advice this time then it will probably be worse then as we will be 6 months or so worse off

also the offering of 100billion under certain conditions dosnt mean that we need to take all 100billion at once or even ever its just that its there if / when its needed

if they dont

trellheim

This is silly. EU membership is Article 29

Our sovereignty is not compromised; no request has been made to the IMF/EFSF.

However, they are in doing due diligence, to react when Ireland does indeed make a request.

And then, like any loan, there are repayment-type consequences "we'll only give you the cash if you promise to do this" .... and under Article 6 we can decide to do that.

Scofflaw

trellheim wrote: »

This is silly. EU membership is Article 29

Our sovereignty is not compromised; no request has been made to the IMF/EFSF.

However, they are in doing due diligence, to react when Ireland does indeed make a request.

And then, like any loan, there are repayment-type consequences "we'll only give you the cash if you promise to do this" .... and under Article 6 we can decide to do that.

I'm genuinely not entirely sure we can, though, or rather I'm not sure the government can do so on our behalf. Most treaties the government signs have some form of quid pro quo, but whether we're getting something or not, the point at issue is that if the EFSF/IMF attach formal conditions to a bailout that interfere with sovereignty, the government has no right to sign such an agreement without the consent of the people, because the government, under the Constitution, doesn't have full freedom to dispose of the sovereignty which the people have vested in them.

Sovereignty, in the Irish Constitution, derives solely from the people. Any legal limitation of it on foot of an agreement by the government requires the consent of the people. If we accept a bailout on the formally agreed basis that we keep our CT rate above a certain threshold, for example, the government has agreed to a limitation of Irish sovereignty, and it can't legally do so on its own.

By way of analogy, let's replace 'sovereignty' with the right to freely use a particular beach. Say there's a group of people who have that right, and they decide that it will be easier, since some of them are away pretty regularly, if that right is managed on their behalf by a management company that will look after the beach for them, and charge them a fee to do so. It should be obvious, in that case, that the company cannot sign up to an agreement with a nearby hotel that gives away that right over some part of the beach without the consent of the members of the group, because the management company doesn't own the right - it derives from the people, not the company.

Similarly, the government has the right to set taxes, but no right to agree to give away the right to set taxes without the consent of the people. So a formal agreement to keep CT rates over a particular threshold would be legally quite questionable. It doesn't fall under the protective article already in the Constitution, because agreeing to an EFSF bailout - even an EU-only bailout - isn't an obligation of EU membership.

That doesn't preclude the government agreeing freely to a plan that includes raising CT rates, as long as there is no formal agreement that requires that specific policy decision.

cordially,
Scofflaw

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later10 wrote: »

Of course, the state has the right but realistically is in no position to turn down serious IMF demands with regard to governance. If they do, the state will run out of money and be unable to find any source of sustainable finance.

The state - basically - has run out of money. Our finances aren't sustainable if we even need to contemplate the possibility of needing IMF help.

But then, again the state's finances have been in serious trouble since Summer '07 and very little was done to stop the financial blood-flow.