EU Treaty De-constructed. - Reasons to Vote No.

Mr. Incognito

I have to say, i have two law degrees and it took me a long time to go through this Treaty.

If is dense, ill definded, cross referenced and difficult. Purposely so.

If people have a copy of the Text beside them and a pen this will work best. Line references are to the copy that came in the doorsteps.

Article 3- This is the "Trigger"- when the Treaty will come into force.

Contracting Party should be:
(a) balanced or in surplus

or the Treaty provisions apply. There are complicated measures but the language is vague. It is not even below 60% of debt to GDP but rather "significantly" below 60%.

For your own reference Ireland is 96.2% presently debt to GDP
France is 81.7% and Germand is 83.2%
Italy is 119% Debt to GDP.

http://en.wikipedia.org/wiki/Stability_and_Growth_Pact

Article 3 is also the home at (e) of the famous "correction mechanism". This obligates the offending party to implement measures.

What are these measures??

That is outlined in Article 3(2) line 7 "The Contracting Parties shall put in place at national level the correction mechanisms referred to in paragraph 1(e) on the basis of the common principles to be proposed by the European Commission.........."

Soooo, the measures are those, undefined at present that we will dream up later. This is carte blanch to the European Commission to bring in whatever measures they deem necessary.

Now, firstly under

Article 4 states if Government Debt exceeds 60% of the value reference one must reduce it by one twenth per yer.

What is "it"? 20% of the excess of 60%, it's not clear. This makes no provision for government debt that is triggered by a stimulus package for example.

Article 5 outlines that a country must do its economic homework and submit its plans to the European Council and European Commission.
What form this takes is to be defined in European Law- basically we'll tell you later.

Article 6 is the reporting of 5.

Article 7 is the where a country may block or veto the Treaty obligations. Basically where a Qualified Voting Majority (QVM) (not including the country who is subject to the provisions) say no. A QVM is 85%.

Article 8
Is where the contracting country says no thank you to your ridiculous plans for us, they will be fined and subject to financial sanctions. They will be taken to the European Court of Justice under 1. and fined under 2.

Article 9 is a where the Contracting Parties "undertake to work jointly towards an economic policy................through enhansed convergence"

^^^^^^^That is a provision that is promoting future tax harmonisation. Make no mistake.

______________________________________________

Now what the hell does that all mean??

It means that The European Commission is making a political power grab under the guise of fiscal stability.

Government Debt DID NOT cause this Financial Crisis. Foisting PRIVATE banking debt and investment losses onto the Public Purse that could not afford them did

Now under the guise of appeassing the same markets that were bailed out the Euro Zone is trying to keep the currency afloat by making sure that everyone is paying back debt they obviously cannot afford. Until European develops a strategy to write down all the real losses that have happened we will never get out of this mess. Land was over valued and used as security to finance all sorts of business, personal and government loans. That value is gone. That money is gone. People can't afford to pay it back. Developers cannot afford to pay it back and European countries, even banded together do not have enough money to pay back the inflated losses. Deal with it Europe.

It WILL be applied inconsistenty and using all sort of financial nonsense based on the vague language. Germany and France watered down it's previous incarnations when it suited them.

But imagine the following scenario. Ireland is gone to the wall. The European Commission says- raise corporation tax to 30% under a "correction mechanism under Article 3. Ireland says get lost and is brought to the ECJ under Article 8 and forced to implement it.

It can happen. The preamble states at Page 6 "Taking Note of the European Commission's intention to present further legislation proposals........"

In short we don't know what we are signing.

This Treaty is a distraction from the real problems. The sooner we tear it up and face them the better.

If history has shown us one thing economically over and over and over and over it is that you cannot tax your way out of a recession.

So all the lipservice to jobs and stability and every other promise that is being made is just hyper bull. It doesn't address any of these issues.

stringed theory

Mr. Incognito wrote: »

Soooo, the measures are those, undefined at present that we will dream up later. This is carte blanch to the European Commission to bring in whatever measures they deem necessary......


But imagine the following scenario. Ireland is gone to the wall. The European Commission says- raise corporation tax to 30% under a "correction mechanism under Article 3. Ireland says get lost and is brought to the ECJ under Article 8 and forced to implement it.

I agree that the treaty is vague in certain ways, but it has more to do with politics than economics. You are afraid that it might strengthen the Commission. But most people think that a strong Commission benefits the smaller countries, in the balance of power within the European Union.
Your assumption that the Commission is likely to act in a way totally against our national interests is not born out by its historical record.

Mr. Incognito

stringed theory wrote: »

I agree that the treaty is vague in certain ways, but it has more to do with politics than economics. You are afraid that it might strengthen the Commission. But most people think that a strong Commission benefits the smaller countries, in the balance of power within the European Union.
Your assumption that the Commission is likely to act in a way totally against our national interests is not born out by its historical record.

Look, I'm a lawyer not a politician, and a vague law is a bad law. In any country.

Even the triggers like the 60% is "sufficiently below 60%"- Well how long is a piece of string.

What we have is a mechanism whereby Countries can be hit with sanctions that have not even been defined yet.

The Commission has acted against countries Interests ALL THE TIME. That's why we have always had one country one vote and everyone had a Veto. Now we will be moving to Qualified Voting Majority and Ireland's veto is gone.
How does a mechanism which moves from one country one vote to majority rule benefit the smaller countries??

That is utter nonsense. It's patently illogical and untrue.


And what do we get in return? Nothing. This treaty does not promote jobs, stability, economic recovery. Nada. Oh we get access to the ESM. Great. We already have Greece being threatened with it and on the back of that European Bonds have gone to ****e. This is not confined to the smaller counties, Italy, Spain and France will be in default, and ARE in default of the Treaties provisions already.

ixtlan

Mr. Incognito wrote: »

Now, firstly under

Article 4 states if Government Debt exceeds 60% of the value reference one must reduce it by one twenth per yer.

What is "it"? 20% of the excess of 60%, it's not clear. This makes no provision for government debt that is triggered by a stimulus package for example.

This is one of the clearer bits. Where do you get 20% from? It's one twenth, 5%, of the excess over 60%. It's been discussed in several threads here, with some examples indicating that even modest growth as experienced during the difficult eighties would be sufficient to allow Ireland to avoid further cuts as part of this criteria.

It's true it makes no allowance for a stimulus package. Clearly it can't if the government has to borrow to do that. However there might be ways around that. For example, if money from the ESM or a similar fund were to be used as an investment vehicle, the burden, and importantly the returns would accrue to the investors, with the state (hopefully) getting only the stimulous benefit. Of course it's true that there's no guarantee this will happen, but richer states are more likely to do something like that if on the other side of the equation they know a program is being followed.

Ix.

kippy

Thanks for the write up, will be following this post.
Can anyone answer me this?
Wasn't there "figures" stated in previous treaties? I recall hearing that France AND germany were the first countries to break these earlier "rules" but nothing came of it - which treaty had these rules in it, and why were they not enforced? Is the "enforcement" side of it the "new" part in this treaty?

Also, will this treaty stop "us" having the same issues we've had in the past decade? (from what I can tell, it won't)
(building an economy on large, one of consumption taxes, based around a bubble)

beeftotheheels

kippy wrote: »

Thanks for the write up, will be following this post.
Can anyone answer me this?
Wasn't there "figures" stated in previous treaties? I recall hearing that France AND germany were the first countries to break these earlier "rules" but nothing came of it - which treaty had these rules in it, and why were they not enforced? Is the "enforcement" side of it the "new" part in this treaty?

Also, will this treaty stop "us" having the same issues we've had in the past decade? (from what I can tell, it won't)
(building an economy on large, one of consumption taxes, based around a bubble)

Yes, Politics, Yes, and partly.

Yes, the existing Stability and Growth Pact as supported by the more recent six-pack actually has more stringent rules than are in this treaty (requiring budgets be balanced or in surplus, the new treaty allows for a small deficit). SGP is based on the Treaty on the Functioning of the European Union Art 121.

On to politics, when a State broke the rules in the SGP a [qualified] majority of the council had to vote to sanction them under that provision, hence it was difficult to enforce against e.g. Germany when France and Italy and Greece were also breaking the rules and thus incentivized not to vote to sanction Germany.

Yes on sanctions, now the sanctions apply automatically (under this treaty) unless a majority vote to prevent them applying making enforcement much easier. So why any way to stop sanctions? Well, say there was another Ireland 08/10 where a MS broke the rules due to global matters outside their control, and that State was doing everything possible to fix the problem and working with others, such that penalties would only add to the problem, in that kind of case a majority might vote to stop the sanctions. But only for a crisis, not for ongoing failure to get your house in order.

Finally the partly comes in 2 parts.

Had the SGP been applied against Germany and France and others and forced them to reform it is possible ECB interest rates might have been higher which would have helped us. The big boys stagnating was what forced the ECB to keep the rates so low.

But the other side is the new treaty requires the Gov to have an independent fiscal council which reports on the state of Gov finances and should report on any weaknesses in the economy. Had this been in place such council should have reported in the years up to 2008 that the country was overdependent on the property market and that this was a huge weakness. The new rules don't just look at the final number (which in our case was a positive in the years running up to the crisis) but also looks at the constituent parts which make up that number (which would have highlighted our vulnerability to property and banking). Not a magic wand, but a definite improvement on where we were pre 2008.

Mr. Incognito

ixtlan wrote: »

This is one of the clearer bits. Where do you get 20% from? It's one twenth, 5%, of the excess over 60%. It's been discussed in several threads here, with some examples indicating that even modest growth as experienced during the difficult eighties would be sufficient to allow Ireland to avoid further cuts as part of this criteria.

It's true it makes no allowance for a stimulus package. Clearly it can't if the government has to borrow to do that. However there might be ways around that. For example, if money from the ESM or a similar fund were to be used as an investment vehicle, the burden, and importantly the returns would accrue to the investors, with the state (hopefully) getting only the stimulous benefit. Of course it's true that there's no guarantee this will happen, but richer states are more likely to do something like that if on the other side of the equation they know a program is being followed.

Ix.

Apologies. It is one twentieth. But one twentieth of what. The Treaty simply says under article 4:

When the ratio of a Contracting Party's general government debt to gross domestic product exceeds the 60% reference value referred to in Article 1 of the Protocol (No. 12) on the excessive debt procedure,............the Contracting Party shall reduce it at a rate of one twentieth per year as a benchmark.

Now firstly what is "it". Is it the Government Debt to GDP. Is 60% the benchmark or the amount that is "Significantly below 60%"

Are they reducing the overall debt to the 60% measure or just reducing the debt generally by one twentieth, and what portion of Govenment Debt. This is not defined. What measure are they using for Government debt.

If is vague for a reason, so that there is wiggle room after and those with various interests can interpret this in their own self interested way. Legislation should never ever be drafted like this. I read a LOT of legislation on a daily basis. I have never seen "it" drafted anywhere in legislation.

Secondly, while we are arguing over what "it" means, we are missing the point in that reducing government debt is just a fancy way of saying cut spending. Cutting government spending means no hope of stimulus packages in the foreseeable future. No targeted programmes. Economic recovery is about flexibility. Codifing a universal one twentieth rule is one size fits all. This doesn't work. It is crayon economics.

Mr. Incognito

beeftotheheels wrote: »

But the other side is the new treaty requires the Gov to have an independent fiscal council which reports on the state of Gov finances and should report on any weaknesses in the economy. Had this been in place such council should have reported in the years up to 2008 that the country was overdependent on the property market and that this was a huge weakness. The new rules don't just look at the final number (which in our case was a positive in the years running up to the crisis) but also looks at the constituent parts which make up that number (which would have highlighted our vulnerability to property and banking). Not a magic wand, but a definite improvement on where we were pre 2008.

My friend I worked in taxation throughout and up to 2008 and the IMF produced a very clear report that showed that we were greatly over-relient on property and stamp duty. This was endorsed by persons such as Morgan Kelly who was told by An Taoiseach of the day to go commit suicide and the report was roundly condemned.

Please do not tell me that a reporting body, and there were plenty, will not be staffed with the same governent interest idiots. This Treaty would have done NOTHING to avoid the crash as it only comes into effect when countries are running Debt to GDP ratios and we would have been in surplus.

I am sick of all this mis-information.

beeftotheheels

Mr. Incognito wrote: »

My friend I worked in taxation throughout and up to 2008 and the IMF produced a very clear report that showed that we were greatly over-relient on property and stamp duty. This was endorsed by persons such as Morgan Kelly who was told by An Taoiseach of the day to go commit suicide and the report was roundly condemned.

Please do not tell me that a reporting body, and there were plenty, will not be staffed with the same governent interest idiots. This Treaty would have done NOTHING to avoid the crash as it only comes into effect when countries are running Debt to GDP ratios and we would have been in surplus.

I am sick of all this mis-information.

I also worked in tax in that time (although I suspect that as a Big 4 director at a slightly different level to you), I also have a couple of law degrees, but unlike you I not only made the effort to read the treaty but also the six pack etc to understand what the treaty actually changes.

You're arguing that because some realised that our Government were over reliant on transactional taxes (No $h!t Sherlock), and nothing was done, we should vote against a treaty which could prevent that from happening unchecked?

The treaty gives the Commission oversight of our budgets because the structural deficit will necessarily require the exclusion of purely cyclical income (as our transactional taxes were). Sure, it's not perfect, "structural deficit" being difficult to define, but even in the treaty (so ignoring the economists involvement) it excludes cyclical amounts so it is an improvement.

"annual structural balance of the general government" refers to the annual cyclically-adjusted balance net of one-off and temporary measures;

I can't help but think that maybe you have not thought this through.

By the way, Karl Whelan actually does have a decent bit on "it"

http://karlwhelan.com/blog/?p=434

Scofflaw

Mr. Incognito wrote: »

I have to say, i have two law degrees and it took me a long time to go through this Treaty.

If is dense, ill definded, cross referenced and difficult. Purposely so.

If people have a copy of the Text beside them and a pen this will work best. Line references are to the copy that came in the doorsteps.

Article 3- This is the "Trigger"- when the Treaty will come into force.

Contracting Party should be:
(a) balanced or in surplus

or the Treaty provisions apply. There are complicated measures but the language is vague. It is not even below 60% of debt to GDP but rather "significantly" below 60%.

For your own reference Ireland is 96.2% presently debt to GDP
France is 81.7% and Germand is 83.2%
Italy is 119% Debt to GDP.

http://en.wikipedia.org/wiki/Stability_and_Growth_Pact

Article 3 is also the home at (e) of the famous "correction mechanism". This obligates the offending party to implement measures.

What are these measures??

That is outlined in Article 3(2) line 7 "The Contracting Parties shall put in place at national level the correction mechanisms referred to in paragraph 1(e) on the basis of the common principles to be proposed by the European Commission.........."

Soooo, the measures are those, undefined at present that we will dream up later. This is carte blanch to the European Commission to bring in whatever measures they deem necessary.

Now, firstly under

Article 4 states if Government Debt exceeds 60% of the value reference one must reduce it by one twenth per yer.

What is "it"? 20% of the excess of 60%, it's not clear. This makes no provision for government debt that is triggered by a stimulus package for example.

Article 5 outlines that a country must do its economic homework and submit its plans to the European Council and European Commission.
What form this takes is to be defined in European Law- basically we'll tell you later.

Article 6 is the reporting of 5.

Article 7 is the where a country may block or veto the Treaty obligations. Basically where a Qualified Voting Majority (QVM) (not including the country who is subject to the provisions) say no. A QVM is 85%.

Article 8
Is where the contracting country says no thank you to your ridiculous plans for us, they will be fined and subject to financial sanctions. They will be taken to the European Court of Justice under 1. and fined under 2.

Article 9 is a where the Contracting Parties "undertake to work jointly towards an economic policy................through enhansed convergence"

^^^^^^^That is a provision that is promoting future tax harmonisation. Make no mistake.

______________________________________________

Now what the hell does that all mean??

It means that The European Commission is making a political power grab under the guise of fiscal stability.

Government Debt DID NOT cause this Financial Crisis. Foisting PRIVATE banking debt and investment losses onto the Public Purse that could not afford them did

Now under the guise of appeassing the same markets that were bailed out the Euro Zone is trying to keep the currency afloat by making sure that everyone is paying back debt they obviously cannot afford. Until European develops a strategy to write down all the real losses that have happened we will never get out of this mess. Land was over valued and used as security to finance all sorts of business, personal and government loans. That value is gone. That money is gone. People can't afford to pay it back. Developers cannot afford to pay it back and European countries, even banded together do not have enough money to pay back the inflated losses. Deal with it Europe.

It WILL be applied inconsistenty and using all sort of financial nonsense based on the vague language. Germany and France watered down it's previous incarnations when it suited them.

But imagine the following scenario. Ireland is gone to the wall. The European Commission says- raise corporation tax to 30% under a "correction mechanism under Article 3. Ireland says get lost and is brought to the ECJ under Article 8 and forced to implement it.

It can happen. The preamble states at Page 6 "Taking Note of the European Commission's intention to present further legislation proposals........"

In short we don't know what we are signing.

This Treaty is a distraction from the real problems. The sooner we tear it up and face them the better.

If history has shown us one thing economically over and over and over and over it is that you cannot tax your way out of a recession.

So all the lipservice to jobs and stability and every other promise that is being made is just hyper bull. It doesn't address any of these issues.

This is a rather unimpressive "deconstruction", I'm afraid - overwrought and under-researched.

A large part of the problem you're having is that you seem to be viewing the Treaty completely in isolation from the previous version (the Stability & Growth Pact) from which the limits derive, the interpretive and implementation decisions taken in respect of those limits, and the powers and procedures under the EU Treaties which govern those in the Fiscal Treaty. You likewise ignore, or are unaware of, the 'six-pack' and 'two-pack' measures this Treaty is part of, and you dismiss the fact that procedures mentioned are to be set in law as "a power-grab". You're also shaky on quite basic points - the 60% debt/GDP level is the trigger, the "significantly below 60%" refers instead to the process of determining structural balance benchmarks. The national correction mechanisms will be based on "common principles" provided by the Commission, not run by the Commission as you imply. Provision is clearly made for stimulus packages in the supporting texts for the Stability & Growth Pact to which the Treaty refers for procedural matters. And so on.

I would have thought a law degree or two would teach you to look at any piece of law in its wider context, and at the very least not simply to ignore relevant established precedent and interpretations.

regards,
Scofflaw

Mr. Incognito

beeftotheheels wrote: »

I also worked in tax in that time (although I suspect that as a Big 4 director at a slightly different level to you), I also have a couple of law degrees, but unlike you I not only made the effort to read the treaty but also the six pack etc to understand what the treaty actually changes.

You're arguing that because some realised that our Government were over reliant on transactional taxes (No $h!t Sherlock), and nothing was done, we should vote against a treaty which could prevent that from happening unchecked?

The treaty gives the Commission oversight of our budgets because the structural deficit will necessarily require the exclusion of purely cyclical income (as our transactional taxes were). Sure, it's not perfect, "structural deficit" being difficult to define, but even in the treaty (so ignoring the economists involvement) it excludes cyclical amounts so it is an improvement.



I can't help but think that maybe you have not thought this through.

By the way, Karl Whelan actually does have a decent bit on "it"

http://karlwhelan.com/blog/?p=434

This is very elegant doublespeak.

YOU were the person that raised the question of reporting on the over reliance on property. I have quoted it above. Now that I have pointed out that this is nonsense you attempt to take the no sh!t sherlock approach?

It is along the lines of:

The treaty would have prevented X.

No it wouldn't.

That's what i said!! Duh.

And now you say it would have put in place reporting mechaisms that

we should vote against a treaty which could prevent that from happening unchecked?

How?

The reporti is outlined in Article 8 based on compliance with the aforementioned undefined "correction mechanism" in Article 3(2)

The Budget and economic partnership programme as outlined in Article 5 only applies to "A contracting party sunject to an excessive deficit programme"

So a country has to be in default before the reporting obligations kick in.

How is this preventative.

The treaty gives the Commission oversight of our budgets because the structural deficit will necessarily require the exclusion of purely cyclical income (as our transactional taxes were). Sure, it's not perfect, "structural deficit" being difficult to define, but even in the treaty (so ignoring the economists involvement) it excludes cyclical amounts so it is an improvement.

Can you please provide links for this or where it can be found in the Treaty. I have a feeling that this is conjecture.

http://karlwhelan.com/blog/?p=434

Thank you for this link but it supports the exact point I have been making.

He states:

Unfortunately, neither of these sections are well worded. The problem is the “reduce it” formulation. In both cases, it looks as though the “it” that needs to be reduced by one-twentieth is the debt to GDP ratio itself.

In both cases it is a reference to Government Debt- which is undefined in the treaty.

The rest of his article is based on his interpretation of debt to GDP ratio. I would be willing to bet that maybe this is the intention of the section but it is not clear. Further without an accurate measurment of "general government debt" we simply do not know what the one twentieth is a measure of. Surely you can conceed that point?

He goes on to use previous definitions of the term which are incorporated into previous incarnations of EU law. I'm not going to drop into the math becuase more importantly he states:

If this outcome was to come about, the one-twentieth rule would be the least of our problems. In anything close such a scenario, debt sustainability would have to be restored via a major default.

So what is it you are advocating. Even your own link is stating that dect sustainability is not maintainable, something this Treaty does not address?


It's quite exasperating. I'm also ex Big 4, but I will defer to your Director Status. Perhaps you were my old boss

Mr. Incognito

Scofflaw wrote: »

This is a rather unimpressive "deconstruction", I'm afraid - overwrought and under-researched.

A large part of the problem you're having is that you seem to be viewing the Treaty completely in isolation from the previous version (the Stability & Growth Pact) from which the limits derive, the interpretive and implementation decisions taken in respect of those limits, and the powers and procedures under the EU Treaties which govern those in the Fiscal Treaty.

I would have thought a law degree or two would teach you to look at any piece of law in its wider context, and at the very least not simply to ignore relevant established precedent and interpretations.

regards,
Scofflaw

I would be happy to have you enlighten me and show me where I have posted something that is inaccurate. We can all waive the air dismissively.

Scofflaw

Mr. Incognito wrote: »

I would be happy to have you enlighten me and show me where I have posted something that is inaccurate. We can all waive the air dismissively.

I don't think anyone would be wise to waive (sic) air, whether dismissively or not. Some of your more egregious errors are highlighted in my post.

cordially,
Scofflaw

Mr. Incognito

Scofflaw wrote: »

I don't think anyone would be wise to waive (sic) air, whether dismissively or not. Some of your more egregious errors are highlighted in my post.

cordially,
Scofflaw

Originally Posted by Scofflaw

This is a rather unimpressive "deconstruction", I'm afraid - overwrought and under-researched.

A large part of the problem you're having is that you seem to be viewing the Treaty completely in isolation from the previous version (the Stability & Growth Pact) from which the limits derive, the interpretive and implementation decisions taken in respect of those limits, and the powers and procedures under the EU Treaties which govern those in the Fiscal Treaty.

I would have thought a law degree or two would teach you to look at any piece of law in its wider context, and at the very least not simply to ignore relevant established precedent and interpretations.

16:17

regards,
Scofflaw
I would be happy to have you enlighten me and show me where I have posted something that is inaccurate. We can all waive the air dismissively.

NINJA Edit

16:19

large part of the problem you're having is that you seem to be viewing the Treaty completely in isolation from the previous version (the Stability & Growth Pact) from which the limits derive, the interpretive and implementation decisions taken in respect of those limits, and the powers and procedures under the EU Treaties which govern those in the Fiscal Treaty. You likewise ignore, or are unaware of, the 'six-pack' and 'two-pack' measures this Treaty is part of, and you dismiss the fact that procedures mentioned are to be set in law as "a power-grab". You're also shaky on quite basic points - the 60% debt/GDP level is the trigger, the "significantly below 60%" refers instead to the process of determining structural balance benchmarks. The national correction mechanisms will be based on "common principles" provided by the Commission, not run by the Commission as you imply. Provision is clearly made for stimulus packages in the supporting texts for the Stability & Growth Pact to which the Treaty refers for procedural matters. And so on.

Ah, so they are, sorry I missed them on first reading :rolleyes:

Okay, can we deal with each point in order and not have them crushed on a paragraph although i realise you were under an edit time frame constraint.

I read your overview of the treaty and you did not mention the corrective measures in Article 3(2) anywhere. How did you misss that in any examination of the Treaty? it is one of the most fundamental problems people have with the Treaty.

1. six pack and two pack treaties

I am aware of them, though I admit I have not examined all of their terms as I am only being asked to vote on this treaty so I have confined my examination to the terms and definitions of same. Can you show me where they address the corrections mechanisms to be adopted under Article 3(2)? Or the express definitions of general government debt in relation to the one twentieth rule which I have outlined my problems with.

2. you dismiss the fact that procedures mentioned are to be set in law as "a power-grab"

I do indeed. That's what it seems to me. One country one vote to provisions that allow the Commisssion to impose sanctions on a country that is refusing to toe the majority fiscal line is pretty much a centralisation of power to me.

3. You're also shaky on quite basic points - the 60% debt/GDP level is the trigger, the "significantly below 60%" refers instead to the process of determining structural balance benchmarks.

Indeed I am. That is based on the Treaty language. Can you show me where the significantly below 60% refers to the process of determining banchmarks? Where are these provisions and what are these benchmarks? I'm not an economist and neither are most persons. If you think that this is a basic point then explain it to us all.

4. The national correction mechanisms will be based on "common principles" provided by the Commission

Indeed. But what are they? We are being asked to vote to give them this power. What are these common principles? They are yet to be adopted as per

the preamble Page 6

"Taking note of the European Commissons intention to present further legislation ..............etc

and page 7

"..........the correction mechanism to be introduced by the C P should aim at correcting deviations from the medium term objective or the adjustment path including their cumulated impact on government debt dynamics"

Clear? Not to me. That is vague in the extreme.

or as you say under Article 3(2) "on the basis of common principles to be proposed by the EC"

Which are..............

4. Provision is clearly made for stimulus packages in the supporting texts for the Stability & Growth Pact to which the Treaty refers for procedural matters.

Please link to these packages or provisions.




I have no problem debating the texts or being educated. If you can reference links to your contentions or quote the text that supports your contentions I would be more than happy to debate the points and persons can all benefit from informed debate.

beeftotheheels

Mr. Incognito wrote: »

This is very elegant doublespeak.

YOU were the person that raised the question of reporting on the over reliance on property. I have quoted it above. Now that I have pointed out that this is nonsense you attempt to take the no sh!t sherlock approach?

It is along the lines of:

The treaty would have prevented X.

No it wouldn't.

That's what i said!! Duh.

Not sure that you read my posts. I pointed out that had the treaty been in place there would have been both official reporting and oversight functions, not in place, which Bertie could not just have ignored! Not perfect, but definitely better.

Mr. Incognito wrote: »

How?

The reporti is outlined in Article 8 based on compliance with the aforementioned undefined "correction mechanism" in Article 3(2)

The Budget and economic partnership programme as outlined in Article 5 only applies to "A contracting party sunject to an excessive deficit programme"

So a country has to be in default before the reporting obligations kick in.

How is this preventative.

Given the way our economy fell off a cliff when we lost the transactional taxbase I think it might just be possible that our structural i.e. non-cyclical accounts were in deficit prior to 2008. Do you have any evidence to suggest that jumping head first into a deficit of 7-8% in 2008, rising to 15 odd % in 2009 once our pro-cyclical tax take evaporated suggests otherwise?

Mr. Incognito wrote: »

Can you please provide links for this or where it can be found in the Treaty. I have a feeling that this is conjecture.

Explained above that all evidence suggests we were running a structural deficit while running a surplus and under the newer versions of the rules should have been in EDP.

Mr. Incognito wrote: »

Thank you for this link but it supports the exact point I have been making.

You didn't actually read the article at all did you? He highlights a potential ambiguity and then goes on to analyse that all the cross references to the six-pack lead to the conclusion that the debt reduction rule is 1/20 of the difference as per the existing rules, and not 1/20 of the total debt. Vienna Convention on the Law of Treaties Art 31 would kick in here and support his analysis if one wanted a legalistic approach, since the treaty expressly references and purports to be supporting rather than changing the six-pack/ SGP, thus the existing law is a valid interpretative aid and any ambiguity is resolved.

Mr. Incognito wrote: »

Perhaps you were my old boss

Really don't think that likely, wouldn't tolerate should shoddy research and inability to think through the logic of arguments before making them from anyone on my team. Oh and my team all know Art 31 of the Vienna Convention being the only part of that convention that a tax adviser needs recourse to on a frequent basis when dealing with tax treaties.

RandomName2

Scofflaw wrote: »

The national correction mechanisms will be based on "common principles" provided by the Commission, not run by the Commission as you imply.

Ah here now...

The national correction measure is to be implemented at a national level, but only in a manner that suits the Commission. To all intents and purposes then, it is 'run' by the Commission. The trigger itself isn't, of course (that is, dependent upon some action by the Commission) but that's because the trigger is supposed to be automatic.

Mr. Incognito

beeftotheheels wrote: »

Not sure that you read my posts. I pointed out that had the treaty been in place there would have been both official reporting and oversight functions, not in place, which Bertie could not just have ignored! Not perfect, but definitely better.

Where? Are you saying that during the boom period that Ireland's Government debt to GDP breached the 60% that would have applied the reporting procedures?





Given the way our economy fell off a cliff when we lost the transactional taxbase I think it might just be possible that our structural i.e. non-cyclical accounts were in deficit prior to 2008. Do you have any evidence to suggest that jumping head first into a deficit of 7-8% in 2008, rising to 15 odd % in 2009 once our pro-cyclical tax take evaporated suggests otherwise?

What are you talking about? "i think it might just be possible? Are you just pulling stuff out of the air there. It is easy to look up the figures.


Explained above that all evidence suggests we were running a structural deficit while running a surplus and under the newer versions of the rules should have been in EDP.

This is conjecture. Look it up and prove it please.


You didn't actually read the article at all did you? He highlights a potential ambiguity and then goes on to analyse that all the cross references to the six-pack lead to the conclusion that the debt reduction rule is 1/20 of the difference as per the existing rules, and not 1/20 of the total debt. Vienna Convention on the Laws of Treaties Art 31 would kick in here and support his analysis if one wanted a legalistic approach, since the treaty expressly references and purports to be supporting rather than changing the six-pack/ SGP, thus the existing law is a valid interpretative aid and any ambiguity is resolved.

Yes, and then he goes on to state it's interpretation is a red herring as it doesn't really matter as the interpretation is the LEAST of our problems. You still haven't adressed the point that this Treaty does NOTHING to resolve the actual problems which is the foisting of debt that countries cannot afford onto the public purse



Really don't think that likely, wouldn't tolerate should shoddy research and inability to think through the logic of arguments before making them from anyone on my team. Oh and my team all know Art 31 of the Vienna Convention being the only part of that convention that a tax adviser needs recourse to on a frequent basis when dealing with tax treaties.

Article 31 is relevant to general interpretations where there is ambiguity. I've never had to refer to it on any cross border taxation issues to date. You might let us know how it applies to the Stabilty Treaty at D below.

Are you AITI Qualified or recruited from Revenue?

Please link your conjecture / stated points with links to the treaty, national budgets or other European legislation which supports your points, namely

A. That Ireland would have been in breach of the Treaty trigger mechanisms that would have necessitated reporting to the European Commission whilst returning some of the largest budget surpluses in the history of the State.

:rolleyes:

B. How this would have contributed to any economic policies that would have been preventative. Are you suggesting that a Treaty, which ceades financial governence to the European Commission signing off on our economic policies would have been accepted by the Irish people in 2004?

What planet are you living on? This is utter nonsense and once again- what does this have to do with the Treaty??

C. Simple links that support your stated percentages.

D. Definition of "General Government Debt". Article 31 of the Vienna Convention which simply states that terms should be interpreted in their ordinary meaning in light of it's context and meaning. Supposedly the meaning of this treaty is stability, jobs, employment etc. Nothing illuminating there but you might show me how this seminal and first port of call legislation answers the gaps in definition in the Treaty.

E.

The treaty gives the Commission oversight of our budgets because the structural deficit will necessarily require the exclusion of purely cyclical income (as our transactional taxes were). Sure, it's not perfect, "structural deficit" being difficult to define, but even in the treaty (so ignoring the economists involvement) it excludes cyclical amounts so it is an improvement.

Please provide supporting links for this. You have ignored it in my last post.

You stated it. Kindly support same and outline how it is even relevant? I'm not an economist and it sounds like fancy nonsense to me.

This treaty will not address the cyclical nature of wealth distribution exhibited in an shriking economy where public expenditure is drastly reduced in conjuntion with widening a shrinking tax base.

^^^^^^^^ See that. Fancy sound bullsh1t with no support. I just made it up. Means nothing. That's what your posts are boiling down to with no supporting corroberation or reference to the Treaty.

And for those that want to know what article 31 of the Vienna treaty says:

http://untreaty.un.org/ilc/texts/instruments/english/conventions/1_1_1969.pdf

stringed theory

Mr. Incognito wrote: »

The Commission has acted against countries Interests ALL THE TIME. That's why we have always had one country one vote and everyone had a Veto. Now we will be moving to Qualified Voting Majority and Ireland's veto is gone.
How does a mechanism which moves from one country one vote to majority rule benefit the smaller countries??

That is utter nonsense. It's patently illogical and untrue.

QMV has been in use since the Treaty of Rome, was greatly expanded under the Lisbon Treaty, and is generally regarded as a compromise that benefits the smaller states. Even the four largest states together count for less than 40% of the vote.
Yes the Commission acts against sectional interests in particular countries all the time, for the general good, but that doesn't mean it is acting against the interest of a country as a whole. Of course it requires a certain minimum level of good faith in the intentions of our European neighbours to be able to see that.

Transpirant

Iceland let their banks fail. It was the government that repudiated their debt. Here is a good writeup:
http://www.independent.co.uk/news/business/analysis-and-features/iceland-the-broken-economy-that-got-out-of-jail-2349905.html

Scofflaw

RandomName2 wrote: »

Ah here now...

The national correction measure is to be implemented at a national level, but only in a manner that suits the Commission. To all intents and purposes then, it is 'run' by the Commission. The trigger itself isn't, of course (that is, dependent upon some action by the Commission) but that's because the trigger is supposed to be automatic.

The problem with "only in a manner which suits the Commission" is that the Commission can't make law to suit themselves. Nor would there even be any point in trying, really.

cordially,
Scofflaw

Scofflaw

stringed theory wrote: »

QMV has been in use since the Treaty of Rome, was greatly expanded under the Lisbon Treaty, and is generally regarded as a compromise that benefits the smaller states. Even the four largest states together count for less than 40% of the vote.
Yes the Commission acts against sectional interests in particular countries all the time, for the general good, but that doesn't mean it is acting against the interest of a country as a whole. Of course it requires a certain minimum level of good faith in the intentions of our European neighbours to be able to see that.

I think that's something that makes up a large part of the difference between pro and anti EU positions. If you don't have any faith in the good intentions of other countries, the EU must seem like a schoolyard, where the biggest rule the roost and the smallest keep their heads down or get them punched.

cordially,
Scofflaw

Scofflaw

Mr. Incognito wrote:

The Commission has acted against countries Interests ALL THE TIME. That's why we have always had one country one vote and everyone had a Veto. Now we will be moving to Qualified Voting Majority and Ireland's veto is gone.
How does a mechanism which moves from one country one vote to majority rule benefit the smaller countries??

That is utter nonsense. It's patently illogical and untrue.

Er, the national vetoes apply on the Council of Ministers ("Council of the European Union"), not in the Commission. Again, more research needed.

cordially,
Scofflaw

meglome

Scofflaw wrote: »

I think that's something that makes up a large part of the difference between pro and anti EU positions. If you don't have any faith in the good intentions of other countries, the EU must seem like a schoolyard, where the biggest rule the roost and the smallest keep their heads down or get them punched.

cordially,
Scofflaw

Nail on the head there. I see so many people who just see bad faith from the EU but I find they really can't show what this bad faith actually is. Tends to a bunch of paranoia that because something is technically possible it's also likely.

beeftotheheels

Mr. Incognito wrote: »

D. Definition of "General Government Debt". Article 31 of the Vienna Convention which simply states that terms should be interpreted in their ordinary meaning in light of it's context and meaning. Supposedly the meaning of this treaty is stability, jobs, employment etc. Nothing illuminating there but you might show me how this seminal and first port of call legislation answers the gaps in definition in the Treaty.

First off - there is no ambiguity as to what is meant by General Government Debt, this is the number agreed with eurostat.

The ambiguity is whether "it" refers to the total Government Debt, or the difference between the total Government Debt and the 60% threshold (a part of me can't believe I'm continuing to argue with someone who's misunderstood the point that he is actually trying to make while trying to hold himself out as some kind of expert)

Art 31 provides that

General rule of interpretation
1. A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.
2. The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble

So if we look for the context of the TCSG the preamble provides that

RECALLING the obligation for those Contracting Parties whose general government debt exceeds the 60 % reference value to reduce it at an average rate of one twentieth per year as a benchmark;

and the only "it" which can be recalled is the "it" per the revised SGP which is 1/20 of the difference and not 1/20 of the debt.

Therefore the context, drawing on the preamble for guidance under Art 31, requires that "it" be the difference, not the debt.

View

Mr. Incognito wrote: »

It means that The European Commission is making a political power grab under the guise of fiscal stability.

Please outline how legally speaking the Commission is doing that given that:
a) it is not a contracting party to the treaty,
b) as a non-contracting party it had no role in the final decision making process on the contents of the treaty so it could not "veto" the treaty if it did not like the contents of the treaty,
c) it has no means of forcing any, much less all, of the 25 contracting parties to either sign or ratify a treaty if they don't want to,
d) any mention of the Commission in the Treaty is there because EACH of the 25 contracting parties agreed to it being there since they all have an individual veto on the final contents of the Treaty.

Scofflaw

beeftotheheels wrote: »

First off - there is no ambiguity as to what is meant by General Government Debt, this is the number agreed with eurostat.

The ambiguity is whether "it" refers to the total Government Debt, or the difference between the total Government Debt and the 60% threshold (a part of me can't believe I'm continuing to argue with someone who's misunderstood the point that he is actually trying to make while trying to hold himself out as some kind of expert)

Art 31 provides that

So if we look for the context of the TSCG the preamble provides that and the only "it" which can be recalled is the "it" per the revised SGP which is 1/20 of the difference and not 1/20 of the debt.

Therefore the context, drawing on the preamble for guidance under Art 31, requires that "it" be the difference, not the debt.

You'll also find it here, in the joyously titled "Specifications on the implementation of the Stability and Growth Pact and Guidelines on the format and content of Stability and Convergence Programmes", in the section dealing with Excessive Deficit Procedures (that is, breaches of the limits):

Article 126(3)
The Commission will always prepare a report under Article 126(3) of the Treaty when at least one of the conditions (a) or (b) below holds:
(a) a reported or planned government deficit exceeds the reference value of 3% of GDP;
(b) a reported government debt ratio is above the reference value of 60% of GDP and
(i) its differential with respect to the reference value has not decreased over the past three years at an average rate of one-twentieth as a benchmark

cordially,
Scofflaw