Britain Could Lose Its Economic Sovereignty Tomorrow

by Shamit Ghosh writing in PickledPolitics on May 17, 2010

Britain can now be forced by ECOFIN to change its own budget and we do not have a veto – thanks to the Lisbon Treaty. In effect, we have lost our economic sovereignty – thanks to the former Labour Government and Lib Dems who refused us a referendum.

Tomorrow Spain and Portugal Governments would be presenting their national accounts to EU’s Council of Economics and Finance Ministers (ECOFIN) to highlight that both countries have taken appropriate fiscal measures to reduce their deficit. This was a requirement set out by the ECOFIN last week before it approved the 750 Billion Euros to bolster the Euro. In other words, fiscal policies of EU member states are in effect now under the control of the European Union.

Last Wednesday, the President of the European Commission, Jose Barroso, announced plans to integrate European economies further. He said “In the end, we cannot have a monetary union without an economic union,” and this was reiterated by the unelected President of the European Council, Herman van Rompuy, when he told the media ““We can’t have a monetary union without some form of economic and – er – political union.”

The European Commission proposals have three key elements:

Firstly the national budgets of EU member states would have to be open to supervision & scrutiny from all other EU nations operating under the direction of the European Institutions.

Secondly, the European Commission would be monitoring macroeconomic imbalances and can recommend to the ECOFIN to require changes in a member states budget as ECOFIN operates under a qualified majority vote – no member state would have veto powers over its own budget. In other words, even if the UK Government feels it is important not to cut certain public expenditures, under these proposals it would have to comply.

Third, if a member state refuses to comply with the directives of the ECOFIN, then it would be penalised and the payments it receives from the European Union.

Fourth and finally, Europe would be creating a European Monetary Fund (EMF) similar to IMF which would be the lender of the last resort – Ollie Rehn, the European Commissioner for Monetary Affairs made it clear that the terms of the loans from would be so drastic that no member state would be voluntarily seeking assistance from this body.

While these proposals are primarily aimed at those 16 members of the Eurozone, the European Commission has made it clear that this would be applicable to all 27 member states in the European Union.

There have been protests against these measures from France, Germany as well as Sweden however these protests have been mostly related to the review of budgets by other member states. However, no member state has objected to these measures based on the erosion of national sovereignty and signing over economic independence to Brussels and unelected European Union institutions. Except for the United Kingdom, where governments past and present object to the European Institutions usurping power of democratically elected governments.

These measures, like the Lisbon Treaty are grossly undemocratic where a democratically elected government of a member state can be overruled on its own budget by other members of the European Union. This is a travesty of democracy and accountability of elected officials and this would mean in all effect the creation of an European super state without receiving any approval from Europeans.

During the debate on Lisbon Treaty, those of us who were opposing this treaty being implemented through the back door were rightly highlighting how the United Kingdom by accepting this treaty would sign over sovereignty to the European Union.

The Deputy Prime Minister Nick Clegg and his party were the cheerleaders of the Lisbon Treaty along with the discredited Labour Government who pushed through the treaty without giving us a voice in the matter. And, now we have no legal power to stop European Union dictating how we should run our own finances and when and where we should be cutting public expenditures.

The Deputy Prime Minister, over the past weeks have made people power his rallying cry yet when it came to action, his party along with Labour party forced this treaty upon us which is now undermining our democracy.

The British public was promised a referendum on the European Constitution, and when this publication and others, highlighted how the Lisbon Treaty was not much different from the Constitution, our concerns were pushed away saying this was not the Constitution and therefore we should not have a vote. All three main political parties at the 2005 election promised us a referendum and the only ones who were willing to keep their word on this were the Conservative Party. And today, our worst fears are being realised – EU member states can order the democratically elected British Government how to manage its own budget and Britain does not have a veto.

Who should we hold responsible for undermining our democracy?

I have a number of comments:

The Lisbon Treaty was of such importance that only national ministers, that is national officers, voted on it.

Yes there was a requirement, set out by the ECOFIN last week before it approved the 750 Billion Euros to bolster the Euro, that Eurozone members submit their budgets.  Yes, fiscal policies of EU member states are in effect now under the control of the European Union.  The reason being that at the May 2010 European Summit, the EU Finance Ministers announced a region of global governance, specifically a federal economic, political,  and monetary  government,  with funding of a EU Treasury which has  the authority to buy ailing sovereign debt and to exercise seigniorage. Mr. Trichet is tasked as the EU’s Treasurer and Chief Banker.

Their announcement effected a bloodless coup de etat; a new era of global governance has commenced; the affect is that the age of national sovereignty is history; sovereign nations are a principal of a bygone age.

In the 27 member european area, one is no longer a citizen of a nation; rather one is a resident of a region of global governance.

While these proposals are primarily aimed at those 16 members of the Eurozone, the European Commission has made it clear that this would be applicable to all 27 member states in the European Union — the reason being the exceptional conditions clauses of treaty law.

Yes many in the United Kingdom object. Ambrose Evans-Pritchard is on his patriotic pulpit about every other day; like when will he get it — democracy died.  Yes, we have witnessed the creation of an European super state without receiving any approval from Europeans, as there was an economic crisis of epic proportions, that threatened the stability of the Euro, and the EU Finance Ministers and Leaders of State announced a European Economic Government. 

As we stand tonight, the European Economic Government, specifically ECOFIN, is the Sovereign of the 27 member european area ; and Mr. Trichet is its Seignior.