Saturday, September 10, 2011

9/11: Ten Years Since the Twin Towers Fell

Hat Tip @susan51684

Wednesday, September 7, 2011

Euro Rescue Operation or Mass Usurpation of Parliament?

The following posting on the site of the German publication Welt Online, written by Gunther Lachmann is relaying a video that has lately gone viral on the German language section of the Internet, much to the dismay of supporters of the parliamentary system.

- Will Europeans defend
their sovereignty? - 
What started out as a bailout program for Greece and Ireland, rendering these former proud sovereign nations de facto wards of state of the EU, has now grown into a hatchling Leviathan, EFSF. By 2013 it is to morph into a fully fledged monster (ESM) that will usurp the Parliamentary budget right of all euro zone countries.

We are sleep-walking into serfdom. The future will be taxation without representation! Where is the EuroTeaParty?

It's important to keep an eye on Germany. The Constitutional Court has pulled the brakes at the ratification of the Lisbon Treaty, when politicians forgot for a moment that Europe isn't (yet) a state. In fact, there's a new ruling:

Update: ZeroHedge: "Explaining The German Constitutional Court Ruling".

Here's a translation of Lachmann's piece:

~ o ~

Video Reveals the Hidden Agenda Behind the Euro Rescue Operation

The new EU financial authority is seeking rights for itself that has left democrats dumbfounded. Politicians know it since May - and are keep stum about it.

For several days now a video about the European Stability Mechanism (ESM) has been making the rounds on the Internet. The video analyzes the draft agreement that the euro-zone countries have charted out in spring of this year. Two interesting things have emerged. First, the features have not yet been publicly debated in Germany, although the draft treaty has already been delivered to the parliamentary parties in May. Secondly, elected officials do not speak directly about the issues as mentioned in the video.

Here is some background information: As of 2013 the ESM will succeed the temporary euro rescue operation (EFSF). The German federal parliament will debate the EFSF later this month. The ESM is to be adopted in December.

In the video, the following points from the preliminary draft Treaty ESM are discussed:

  • The ESM is to get a share capital of €700 billion. That's twice as much as the entire German federal budget this year.
  • The ESM members agree "irrevocably and unconditionally" to payment "within 7 (seven) days".
  • The Board of Governors may decide to change the share capital.
  • The ESM, its property, and its financial assets enjoy full legal immunity.
  • The property, funds and assets of the ESM are "exempt from access through search, seizure, forfeiture, expropriation and any other form of seizure, taking or foreclosure by government action or a judicial, administrative or legislative action"
"Welt Online" confronted all parliamentary parties with the findings, produced a "" video and asked for a brief assessment of the points highlighted in the video. On the advisory board of "deputies" are journalists, such as former "Welt" editor Adam Konrad and longtime "FAZ" correspondent, Karl Feldmeyer.

The SPD announced that it will refrain from "commenting on the video" because of the "dubious campaign" against the euro by "a single operator of various websites - including one on which present video is found". "For further information on its euro policy" the SPD referred us to their Home Page. And since the ESM contract was currently under renegotiation, the statements in the video are outdated and untrue anyway.

What does the Union think

The CDU/CSU parliamentary group is defending the ESM. The financial affairs spokesman Klaus-Peter Flosbach wrote down in their stance for "Welt Online": "The video is much too biased to be informative. This only deepens the voters' confusion. Important issues, central to the functioning of the European stability mechanism, are omitted.

It does not, for example, point to the particularly high hurdles under which financial assistance may be granted. Also missing is information about the participation of the private sector, or that Germany has veto power. This video is but one example of the great need for information. We need to better explain to the voters why we have taken this route in dealing with the European sovereign debt crisis".

What say the Greens

The Green Party said that they had been in conclave the past week and spoke "very intensely about the problems as mentioned in the video". This has led to the following conclusions:

"Despite the need for improvement, the European Stability Mechanism (ESM) is a useful tool. Therefore, we support it. The ESM must be made operational quickly and credibly. Only that will calm down the financial markets and will a market-driven debt crisis be prevented from happening in the future. At the same time, the rights of the legislature as imposed by the Federal Constitutional Court ruling regarding Lisbon and the integrity of the German Parliament, must be maintained. Therefore a far-reaching involvement of the German Bundestag in important".

The existing laws on the participation and involvement of the German Parliament in matters concerning the EU will serve as a model for the future involvement of parliament in ESM. The Greens call for:

- "The nature, amount of German contributions, and the instruments must be determined by law and can only be changed by an amendment.

- Similarly, should other countries apply to be included in the permanent rescue plan, the agreement of the Bundestag is mandated. Should the federal government for any compelling reason disagree with the decision of the Bundestag, the Bundestag must be immediately informed before the crucial vote takes place.

- Furthermore, the government must inform Parliament of any action in the ESM and decision-making bodies at the earliest possible date, comprehensively, continuously and in writing and orally. The information includes relevant documents, including preparatory articles".

However, should the parliament not agree with the billions of aid, the Greens will immediately reserve their right of democratic participation:

"But the ESM must be able to act in a crisis and be able to respond quickly. Therefore, a mandatory decision of the Bundestag before the granting a loan would hamper coping with the crisis".

But they expect that "the European Parliament will be fully involved: the ESM is to insure financial stability in the euro zone as a whole".

What does Die Linke

Alexander Ulrich, chairman of the Group in the European Union Committee, spoke on behalf of Die Linke about the video: "Die Linke rejects the European stability mechanism - probably the only group in the Bundestag - off hand". Their reasons, however, are different from those in the video. The video completely ignores the participation rights secured by the German Goverment.

"Decisions are either taken unanimously or by a majority which includes a German vote," said Ulrich. Also, the participation rights of the Bundestag are misrepresented in the video, for example that the ESM can't raise capital independently. The Bundestag has set the ceiling for German participation in national law.

"But it is true: Parliament should have more rights in the future, and decide on euro rescue packages," said Ulrich. "What these participation rights should be is up to parliament to negotiate in the forthcoming ratification of the ESM Treaty".

Criticism of the ESM is justified, but the real weaknesses must be pointed out: "We can't waste billions of taxpayers' money in order to save banks and speculative profits. Recipients should not even be driven into recession by socially unjust and economically nonsensical reduction programs that raise their debts instead of lowering them, "Ulrich wrote.

De Linke therefore demand euro bonds and loans from a European Bank for public bonds, so that exorbitant rates of capital markets and speculators are reigned in.

Criticism of economic law expert, Kerber

Outside of politics the issue is viewed differently, says a Berlin economic law expert, Markus C. Kerber, who represents 50 entrepreneurs in a Court action against the policies of the federal government: "The ESM is the future of Finance. The ESM contract will lead to the elimination of the budget right of Parliament". He specifically warns against this road.

More contributions by Günther Lachmann

Courtesy @hlelowrold & @berryhoning


- Orphans of Liberty: "The European Financial Stabilisation Mechanism", by James Higham

RatePoint Business Reviews