Joe’s Blog

The easy and funny argument Spoofers guide to the Lisbon treaty HT: Paul Browne

---

If we vote yes to Lisbon the EU will work better. It will work for us in the areas of energy, immigration and sport amongst others which are added as competences. In times where energy prices are rising and climate change needs to be tackled by EU member states together, these changes are needed sooner rather than later. Immigration is better dealt with together and things like people-trafficking and exploitation can be tackled. Decision making will be faster, more democratic, more open and transparent. A stronger EU is good for us economically, socially and culturally as it has been for the past 35 years and this is a step forward (albeit without a direct cash incentive). We are part of the EU and please vote yes to keep us part of it.

---

If we vote no, Ireland may well be seen as eurosceptic, self-interested and obstructive. There is absolutely no guarantee that we can even renegotiate the treaty. This treaty has been negotiated for many, many years and each change has been fought for vigorously by 27 countries. Going back wouldn’t just be for us. Other countries could re-open negotiations too. As The Guardian notes

There is a strong view that after struggling to get this treaty for so long, the rest of Europe would simply decide to go ahead without the Irish.

If 490 million citizens wish to accept Lisbon via their elected parliaments - who are we to hold them back? We already do not participate in the Schengen Agreement (abolition of border controls), the UK is not part of the Euro Zone while Norway isn’t even in the EU but has access to the common market via the EEA, is oart of Schengen and implements almost all EU directives. Voting no (for the 2nd time) is a clear indication that Ireland is either not willing or able to ratify EU treaties and other states can bolster the argument that enhanced cooperation is needed to allow those member states that are willing to move forward. A no vote increases the likelihood of enhanced cooperation (Ireland isn’t excluded because a rule of enhanced cooperation is that it is open for any state to join when they wish)

---

The NO arguments have not convinced me to date. If anything, they have convinced me that the biggest opponents of the EU don’t want this passed for various reasons - from the extreme left to the extreme right, the fundamentalists and the people who profit from a weak and divided Europe.

First off, corporation tax, arguably the most important factor for multinationals moving here, along with our access to EU markets and educated, english-speaking workforce. Without the EU market, the tax would be meaningless.
Our veto on our corporation tax rate is rock solid It is a direct tax and is a fiscal policy which the European Court of Justice has ruled is a matter for member states, not the EU.

Article 93 of the Lisbon Treaty opens another door to EU tax meddling. Where national differences in company tax lead to “distortion of competition”, it would enable the European Court of Justice to apply the internal market rules on competition, where majority voting applies, to matters of corporation tax thus bypassing our much touted “Tax Veto”, which is relevant to tax harmonization but not other key aspects of Ireland’s tax policy. - Libertas.org

Article 93 clearly states that it applies to indirect taxes, which corporation tax is NOT!

On Questions and Answers, Declan Ganley and Mary Lou McDonald of Sinn Fein changed tack and claimed that enhanced cooperation would lead to our veto being bypassed. This is totally misleading and has nothing to do with the Lisbon Treaty. Lisbon changes nothing with regard to enhanced cooperation apart from increasing the minimum number of countries involved from 8 to 9. Approval of Enhanced Cooperation has been QMV for years and will be whether we vote yes or no afterwards. The Irish Times explains it well too

What is clear, however, is that the Lisbon Treaty doesn’t change the rules on enhanced co-operation or on corporate tax. Tax experts also suggest that groups of EU member states can already club together and try to renegotiate their bilateral tax treaties with Ireland outside the EU framework to create their own common consolidated tax base.

Furthermore, the common consolidated tax base as proposed refers to the method of how taxes are calculated as opposed to the rates. Other countries are opposed to this either in principle like Sweden and the UK or because of their own low corporation tax rates like many Eastern European states.
Rejecting Lisbon does nothing to protect our corporation tax rate unless pissing off our allies somehow helps…

---

The commissioner debate is another red herring. In the next commission there will not be a commissioner for every member state, with or without Lisbon. This is because there are now 27 EU member states and Nice stated that once that number is reached, a system of rotation of commissioners must be agreed. Lisbon only defines how commissioners are rotated. Note that big countries like Germany, France and the UK have signed up to exactly the same rights to nominate a commissioner as us. They have even gone from 2 commissioners to 1 as recently as 2005. Furthermore, commissioners are not national representatives. The treaties specify that they must work independently of national governments and groups. Ireland is represented as a country in the Council where Ireland has a veto and a voting weight. Ireland resolves disputes with a commissioner such as Mandelson at the Council of Ministers where it can use its veto.

“The Members of the Commission shall be chosen on the grounds of their general competence and their independence shall be beyond doubt.

As Nice has been ratified already, any system of rotation could be agreed from my understanding of this text (with or without Lisbon)

The number of Members of the Commission shall be less than the number of Member States. The Members of the Commission shall be chosen according to a rotation system based on the principle of equality, the implementing arrangements for which shall be adopted by the Council, acting unanimously.

The number of Members of the Commission shall be set by the Council, acting unanimously” - Nice Treaty

Voting No does not prevent rotation of Commissioners

---

Privatisation of public services, health and education is another argument thrown out to scare people. But the treaty explicitly states

The provisions of the Treaties do not affect in any way the competence of Member States to provide, commission and organise non-economic services of general interest.

and even if people argue over whether health and education are or aren’t non-economic services, the treaty states that the shared values of the Union in respect of services of general economic interest include

the essential role and the wide discretion of national, regional and local authorities in
providing, commissioning and organising services of general economic interest as closely as
possible to the needs of the users

Lisbon does not force the privatisation of public services
Also, the European Court of Justice reinforces the right of member states to provide things like health services - Case C-222/04 Cassa di Risparmio di Firenze [2006]

Health services are also part of the wider framework on services of general interest. Article 152 of the Treaty makes clear that Community action in the field of health services must respect the responsibilities of the Member States for the organisation, financing and delivery of health services and medical care

---

Agriculture Veto - opponents often say we’re losing the veto on agriculture (or on the WTO talks). Fact is that the veto on agriculture has been gone for 10 years. This isn’t part of Lisbon at all! We have a veto on WTO talks because it relates to services too and because we have a veto in that area, we can veto a WTO agreement.
Voting no to Lisbon does not affect the WTO veto or agriculture ‘veto’. It only serves to piss our allies off, at a time when we need allies to get a good WTO agreement and there is a CAP ‘health-check’ coming up soon too. Things like milk quotas are also being reviewed and we need allies, not enemies in Europe!

---

The nonsense about Lisbon leading to abortion, conscription etc. being introduced. I’m disappointed that people are using such wild and upsetting scare tactics.

---

When I heard a lot of these arguments, I was surprised and concerned. Concerned enough to read the treaty and look for explanations. Time after time, the arguments have proven to be unrelated to Lisbon or distortion of Lisbon itself. The NO campaign has been deliberately scaremongering and the Yes side has struggled to clarify facts convincingly from an opposition that has been given the benefit of the doubt.

---

UPDATE: How could I leave out the scaremongering about this being the last referendum because it’s a self-amending treaty…well that is stretching the truth more than a little.
From the referendum commission;

The Lisbon Treaty now proposes to give the European Council (Heads of Government) the power to propose changes to certain parts of the governing Treaties. Any such changes cannot increase the competence of the EU. Any such proposals must be agreed unanimously by the European Council. This means that any national government may veto such a proposal. If the European Council does agree a proposed change, then in order for it to come into effect, it must be ratified by the Member States in accordance with their own constitutional traditions. This may require a referendum in Ireland as happens at present.

UPDATE 2:And voting no because other countries aren’t having referenda! I believe we should respect the constitutions and elected representatives of other EU member states.

Should we have rejected past EU treaties because some countries ratified them without a referendum?
Should we keep rejecting treaties until we have forced every country to have a referendum on Lisbon?
Places like Switzerland have referenda on non-constitutional laws regularly. Are Ireland’s laws undemocratic or invalid because we didn’t have a referendum on each law?

---

Finally, the text is complicated because it deals with a lot of complicated issues and life is complicated. It is taking account of the wishes and concerns of 27 member states. It is readable and a consolidated version makes it a lot easier. But the information is by no means hidden and there are lots of information booklets and sites explaining what it is. The NO side are confusing the electorate and scaremongering but I hope you’ve come to see that their arguments don’t hold up and their motives are questionable. The voices of reason are advocating a yes vote

Via RTE: Trichet looks to Asian, oil crises for lessons

Trichet stressed repeatedly today that the ECB saw its role amid the turmoil as one of anchoring inflation expectations, making clear that an interest rate cut called for by some investors and politicians should not be expected in the near future

‘If we don’t learn the lessons of the past we will find ourselves faced with the same problems that we encountered during the first oil crisis,’ when countries responded to higher prices by raising wages and salaries, he said.

That had fuelled an inflation spiral, choking off growth and causing widespread, stubborn unemployment that dogged Europe for decades. ‘Never forget, mass unemployment in Europe started with the very bad reaction after the first oil shock’ in 1973, Trichet noted.

Note too that the German economy hasn’t slowed yet and the metal industry there is experiencing the strongest boom in decades. Even the Ifo index has increased this month showing that the business climate has improved in March instead of getting worse.

For MGB Via Geewiz

Also - allegation that Mark Zuckerberg cashed in before Web 2.0 crashed. Quickly followed by clarification that it was a baseless rumour

Nothing much to say really - a few quid here and there which will be meaningless after 5% inflation (caused instead of combated by government policy).

Quite significantly - EU states have agreed a major change in VAT. Now, VAT on e-commerce, telecommunication and satellite television services will go to the country where the consumer is, rather than where the service provider is located. Amazon, Paypal, Skype and Apple’s iTunes are based in Luxembourg partly because of their 15% VAT rate (EU minimum on services). Under these new rules, Luxembourg will probably lose EUR 220m per year.

This moves the VAT collected from low-tax economies to enconomies with a large number of customers and/or high tax rates.

This is worrying for Ireland because a similar principle has been suggested by the same commissioner (Laszio Kovacs) and Charlie McCreevy has some out strongly against it. See this article from the Indo.

Luxembourg used it’s veto twice and were granted a delay until 2015 and 30% of VAT until 2018. I would expect Ireland to use it’s veto too but what caused Luxembourg to cave in ultimately? Size?

Biofuels ‘Emit More Greenhouse Gases than Fossil Fuels’

Did your county make the new All-Ireland Monopoly board?

20 things we’ve learned from the Rugby World Cup

Potsdamer Platz is up for sale! (nod to Eddie Hobbs et. al).

Via Danny - Why Democracy Film

A corporate conspiracy to silence alternative medicine?

How the Green Party and Eamon Ryan are doing more damage to broadband than FF ever did

Forget the The Alka-Seltzer Suit, look at the 2nd video!

Via Off The Meattrack

Eddie Izzard’s Encore on Computers:

Clever dog - Bertie Ahern has €300,000 worth of payments that he can’t explain. So he gives lots of confusing explanations. Try as you might to piece everything together, the story changes on an weeky and monthy basis summed up by judge Mahon:

polar opposite accounts

The sums still don’t add up and even the special formula to explain the $45,000 payment (meant to be GB£) turned out to be non-existant by Mr. Ahern’s own admission.

---

What does this mean though? Was he just a poor man in need of a dig out? Remember that this was a senior figure in the party almost never out of power.

On the night before he was forced out of office in 1994, he changed the tax designation for the Golden Island site owned by Owen O’Callaghan. Eamon Dunphy is giving evidence that Owen O’Callaghan told him that Bertie Ahern

had been bought

he had taken money

he had been taken care of

If there was an innocent explanation for all of this, it didn’t come out at the tribunal and I doubt it will be in his memoirs.

Should he resign? I believe too many people judge the personality that is Bertie Ahern instead of the damage caused to the people living in estates that are incomplete or unsuitable. It isn’t easily apparent to those in the estates whose fault it is that there are no schools nearby, that there are no buses or that the land is prone to flooding. How often do you think a developer uses his reputation and connections to get planning approval or rezoning? Could you compete if you had funding?

The damage that is more tangible will be the value of property. With inflation around 4.5%, a drop of 3% is more than that. And with interest rates increasing (the ECB is only on a short break imho), there will be people finding it difficult to meet repayments, remortgaging, negative equity etc.

---

Not only that, but our economy is now at risk as a result of relying on construction and speculation since 2002. If you had €300,000 to invest, would you put it in a house to rent or in a business idea? Every time you hear someone say that the fundamentals of the economy are stable, think of this

Construction makes up 23pc of Ireland’s GNP and employs 416,000 people

And people have learned to invest in property instead of anything else - how many people are buying shopping centres in Berlin or villas in Spain?

The government itself is massivly exposed to the slowdown in the property sector - up to 45% of a newly built house goes towards taxes and local authority levies such as stamp duty and VAT on materials etc. Add to that the taxes paid by those employed in construction and the services they consume. It isn’t as if there are many other industries for these people to go into. The alternative to residential construction is commercial or public infrastructure projects. But taxes received have dropped substantially in the last few months, we can expect a deficit of €1 billion and with inflation running at 4.5%, there isn’t much room to splash out on capital projects.

If that has depressed you, then A Random Walk picked up some quotes* for every situation

If house Prices are rising.

If house Prices are static.

If house Prices are falling.

What do you say to anyone who says that you’ve been wrong, very wrong to date?

When was the last time you recommended that anyone should hold off on buying?

and for a real quote that A Random Walk spotted:

I think we’ll see a bit of stagnation, maybe a five to ten per cent fall but no real collapse

after Northern Ireland prices rose 51% in a single year.

I like his interpretation of the lexicon too:

• Soft Landing - Anything ranging from house prices rising at the rate of inflation to a 20% drop
• Stagnation - Massive 60% swings in the velocity of house prices, property investors losing their shirts.
• Hard Landing - Eruption of nearby volcano, nuclear war.

Spotted by Damien Mulley in the Examiner and then Damien Blake(FF Cllr.) in the Donegal News

How it works:
1. The victim receives a cheque and lodges it to their own bank account - because the scammer cannot open one….
2. The victim thinks the cheque has cleared after 1 to 5 days, takes a commission and wires a payment to the scammer
3. It is only several days or weeks later that banks, especially international banks process the transaction fully and discover the fraud. The funds are reclaimed by the bank and the victim has lost money. See wikipedia: Check cashing scams

The ad from The Examiner:

and The Donegal News:

German banks have had to make €17.3 billion ($23.3 billion) available to the Saxony state bank (.de) to cover Dublin-based affiliate/conduit Sachsen LB Europe(.ie). That affiliate (or off-balance-sheet investment vehicle) had a fund called “Ormond Quay” which had invested in “asset backed commercial papers” and got into liquidity problems. It has two other funds also - “Georges Quay” and “Sachsen Funding” which are not in trouble (yet).

Via Spiegel: Banks in Germany Wobble and Sachsen LB Europe Statement

---

IRISH BANK COLLAPSES

The crisis claimed its first Irish casualty last week with the collapse of the Dublin-based firm, Structured Credit Company (SCC), with liabilities of $350 million (€259.5 million). - Irish Times

Speaking at the company’s launch earlier this year, the minister for finance Brian Cowen had described SCC as ‘‘a flagship project’’ that would ‘‘help to underpin Ireland’s standing as a centre of excellence for the location of international financial services’’ - Sunday Business Post: Dublin finance firm falls victim to credit crunch

It’s not Brian’s fault of course

I’ve recently discovered A Random Walk - Irish Financial Blog and find it an interesting read on a daily basis, especially considering the US sub-prime mortgages, the worldwide credit crunch, the Irish property bubble and so on.

The ECB has to step in and loan €155.85 billion to banks to save them from a credit crunch.

Goldman Sachs has to plug a hole into one of its hedge funds - at least $2 billion

I think the ECB will raise rates at the next meeting. They used their usual codewords “strong vigilance” but in the meantime the credit crunch hit and the ECB gave out extraordinary loans. BUT the central banks work together and the Norwegian bank gave out a few billion too and still raised rates - Norway Raises Key Rate to Head Off Higher Inflation

Are things okay and returning to normal? The Financial Times doesn’t think so - ECB chief fails to reassure markets

Abolition of stamp duty fails to boost market - Irish Independent, see earlier post (post-election) The Irish Independent & Stamp Duty

Spoken Irish to die out in next 20 years, new report predicts