The treaty amendment represents a huge change in the relationship between the United Kingdom and the European Union

The House of Commons considered, yesterday, a motion of approval of the Government’s support for the proposed Article 48(6) decision – the European Council’s draft decision amending Article 136 TFEU, so that “Member States whose currency is the euro may establish a stability mechanism to be activated if indispensable to safeguard the stability of the euro area as a whole.

During the debate Bill Cash made the following interventions:



The Minister for Europe (Mr David Lidington): I beg to move,

That this House takes note of draft European Council decision EUCO 33/10 (to amend Article 136 of the Treaty on the Functioning of the European Union with regard to a stability mechanism for Member States whose currency is the euro) and, in accordance with section 6 of the European Union (Amendment) Act 2008, approves Her Majesty's Government's intention to support the adoption of draft European Council decision EUCO 33/10.

Under the terms of the European Union (Amendment) Act 2008, the House should approve this motion on the proposed change to the European treaties so that the Prime Minister can then support the adoption of the draft European Council decision to amend article 136 of the treaty on the functioning of the European Union at the European Council scheduled for 24 and 25 March. It is my belief that agreement to this, which is about the narrow change brought forward to enable the countries that use the euro as their currency to establish a permanent stability mechanism from 2013 onwards, is profoundly in the interests of the United Kingdom.

Mr Bernard Jenkin (Harwich and North Essex) (Con): Can we be absolutely clear what we are doing here? It used to take months, even years, to change a European treaty. Tonight, we are going to debate this motion for 90 minutes and then the Government will go to the European Council and agree to that change in the treaty. That is correct, is it not, because the next time this comes back for scrutiny it will be a fait accompli?

Mr William Cash (Stone) (Con): My right hon. Friend is going through all the procedures and the technical side of things, but, as he knows, that is not really what the treaty is about. I hope he will agree that it represents a huge change in the relationship between the United Kingdom and the European Union. Anyone who cares to look back at what those of us who have argued this case before have said, and to look in particular at The Economist this week, will know that the treaty is a hybrid one that is being devised, driven and pressed forward by Germany and those countries that wish to acquiesce in Germany's dictated terms. Does he agree?

Mr Lidington: No, I am afraid I do not agree with my hon. Friend on that point. As I have said, it is in the interests of the United Kingdom for there to be stability in the eurozone. To some extent, the measures that the eurozone countries are now taking are a response to the kind of critique that he and other Members of this House made 10 or 11 years ago when the euro was first created. They-I was very much in this camp-argued that it would cause huge difficulties to create a currency union involving a single interest rate and single monetary policy that did not have some way of reconciling very different rates of growth, inflation and unemployment in the countries in that single currency area.

I want to finish on the procedural points and then move on to the content. If the draft decision is adopted by the European Council, all 27 member states will have to approve the treaty change and ratify it in accordance with their respective constitutional requirements before the decision enters into force. The treaty amendment cannot come into effect until we-and everybody else-ratify the adopted decision.

My right hon. Friend the Foreign Secretary and I have already given an assurance at this Dispatch Box that this and every other future treaty change will be considered in accordance with the terms of the European Union Bill, once that enters into force. That Bill will require Ministers to lay a statement before Parliament within two months of the commencement of part 1 of the Bill, explaining whether the treaty change would fall within clause 4 of the Bill-namely, whether it would involve a transfer of competence or power from the United Kingdom to the European Union.

The treaty change will then have to be ratified by primary legislation-a full Act of Parliament-before the United Kingdom is able to say formally that it has completed the ratification process, so even when we get to that stage, the final version, agreed by all 27 Heads of Government, has to come back to Parliament for ratification and will be debated in all the stages of primary legislation. Tonight is therefore not the only opportunity that my hon. Friends will have to debate the measure.

Mr Cash: As my right hon. Friend will know, according to Reuters and many other news agencies Portugal is on the brink of needing a bail-out because its economy is imploding. Does he accept that, as this debate continues, we will be exposed under the EFSM to the tune of up to whatever is the proportion that we should contribute under the proposals until 2013, and that we should have insisted that that was repealed and revoked when the other arrangement was entered into? That is the concession that we should have got, and the Government did not even seek to achieve it.

Mr Lidington: We inherited from our predecessors a legislative measure that was brought in under an existing competence and treaty base and that was, from that time, legally binding. My hon. Friend will understand that I am not going to be drawn into speculating about the position of other individual member states. My understanding, on the basis of the most recent information that I have, is that no other member state has been asking the EU authorities for additional financial help.

As the Prime Minister has made clear many times in this House, securing a tight and disciplined budget for the future is the highest priority for the European Union. At the last European Council meeting, Britain led an alliance of member states to unprecedented success in limiting the 2011 EU budget increase to 2.91%-a very marked improvement on our predecessors' performance in the previous year. Crucially, in moving forwards, working alongside key partners such as France, Germany, Netherlands and Finland, we are committed to a real-terms freeze in the EU budget in the new perspective, which we expect to run from 2014 to 2020, and we have written collectively to the President of the European Commission setting out our position.

Mr William Cash (Stone) (Con): The essence of this debate is not just the technicalities, which we heard about at great length from the Minister, but something far more fundamental-the political landscape of Europe. The Minister knows it and the Foreign Office knows it. To give an example, there was a massive row between Nicolas Sarkozy and Mr Kenny about the terms of European economic governance only a few days ago. Furthermore, as was said this week in The Economist:

"Mrs Merkel has struck a Faustian bargain with France's Nicolas Sarkozy."

He knows that France is losing influence, and as one senior EU official commented:

"France needs Germany to disguise its weakness, and Germany needs France to disguise its strength".

The fact is that we have the strength to prevent this hybrid treaty arrangement, which presents Germany with a predominant role. We have great sympathy for Germany's predicament, given that it contributes so much to the European Union and is having to pay out so much. I have fairly regular meetings with German politicians, who tell me that if their country had the opportunity, it would almost certainly go back to the Deutschmark. There is a serious crisis in Europe, but the response is about the nature of a treaty, something in which this Government are acquiescing-it is not far short of appeasement.

The plain fact is that this is a serious moment for the future of Europe. This is a new, unprecedented situation, and it is accompanied by other proposals, which, as I understand it, will also be considered on 24 and 25 March, namely the proposals for the euro pact, which has otherwise been known as the competitiveness pact. However, nobody really knows exactly what the ingredients of it are, any more than they knew about the ingredients of the proposal that we are discussing this evening in its earlier stages. Indeed, I had to use an urgent question to extract from the Government the fact that it was even being made. That is the manner in which Europe works: by secrecy and behind closed doors. Indeed, there are already signs of committees meeting, and we are discovering-through leaks and otherwise-the manner in which they are going forward.

One element in all this is that, as my hon. Friends have rightly said, it would have to be determined by unanimity, so we would have the leverage to stop this juggernaut moving forward. I described it the other day as being like an aircraft carrier in comparison with a rowing boat, but we in Britain will not be regarded as a rowing boat by any means. If such arrangements were being made co-operatively by a voluntary association of nation states, I would be the first to say, "This is fine", but they are not. They are being dealt with in the context of a legal treaty. We are parties to it, which is why clause 4 of the European Union Bill is such a disgrace. I say this with great respect for my right hon. Friend the Minister, but he talks about how we would be under no legal obligation and how there would be no transfer of powers or competences, but that is not the issue. The issue is whether the United Kingdom is affected. That is the point that I put to the Prime Minister repeatedly, and he cannot answer it. The fact is that the arrangements in question do affect the United Kingdom. They are matters of foreign policy; they are not just constitutional questions relating to sovereignty, competence and powers.

Martin Horwood: I hope that the hon. Gentleman appreciates that I am missing the Cheltenham festival to be in Parliament this week, which I do not mention flippantly. The festival is enormously important to my constituency economically, and it depends enormously on Irish euros to make it succeed. If in the long run the outcome of the stability mechanism adds some discipline and rigour to eurozone economies such as Ireland, can he not see that that would be of enormous benefit to the festival, to Cheltenham and to the whole of the UK, and should we not do everything in our power to facilitate it?

Mr Cash: I was one of the first-in fact, I think I suggested that we should help Ireland through the bilateral Bill that we eventually produced. However, the Irish are now being put under pressure, at the dictation of Germany in particular, to reduce their corporation tax. That will not do much for the Cheltenham gold cup.

There is a serious problem, because the Government are effectively obscuring the nature of this measure by giving the impression that it is all about institutions. It is about realpolitik. In the days of Bismarck, the German states were brought together in a customs union. That was done for understandable reasons; I do not want that to be misunderstood. However, there is now a problem for Europe. Our problem is that, in the 43 minutes that the Minister spent addressing the House, he did not deal with the politics of this matter at all. That is most unfortunate. In every serious commentary on this issue, including those in the Financial Times, the real question is whether Germany is becoming increasingly predominant, and whether that is intentional or whether it is happening by accident and Germany is making the most of it.

Germany is making the most of the financial crisis to get a greater degree of political control, and the question of whether we can influence that by entering into an arrangement of this kind-which affects us even though we are technically excluded from it-is a serious foreign policy matter for the innermost parts of the Foreign Office. It is also a matter for this House. I believe profoundly that these issues, including the euro pact itself, are not being properly disclosed. The Minister might know what is going on, but we do not. We are not being told. We do not know what the strict conditionality affecting the other member states in the eurozone will be under article 138 as amended. The plain fact is that in that conditionality a crisis lurks. If over-severe conditions are imposed, we will have another crisis in Europe.

This is a bad treaty proposal. The leverage comes now, when we have the opportunity to say no. The Government propose that this will be dealt with in a Bill, but that will be far too late. The Government are acquiescing in this, and I regard that as a form of appeasement to the modern problems of Europe in the form of a predominant Germany, which is not in the interests of Europe, not in the interests of the United Kingdom, and not in the interests of Germany itself.

Question put.

The Deputy Speaker's opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 23 March (Standing Order No. 41A).

3 thoughts on “The treaty amendment represents a huge change in the relationship between the United Kingdom and the European Union

  1. Anne Palmer

    “The ESM Treaty ‘intrudes’ (I use “intrudes” as a polite way of putting it) on the Treaty of Lisbon which is lodged in the Vienna Convention on the law of Treaties. This ESM Treaty affects all 27 member states that ratified the original Treaty, and not just the 17 in the Euro area. The 17 can’t just “go off” on a tangent with a new Treaty. However, if they can, then so can THE REMAINING 10 COUNTRIES NOT IN THE EURO CAN ALSO-AND MUST-, MAKE A VERY DIFFERENT TREATY LIKE TAKING THEIR FISHING BACK AND WHAT GOES ON IN THEIR 12 MILE LIMIT, MOST CERTAINLY NOT ALLOWING THEIR ENGLAND TO BE DIVIDED UP INTO EU REGIONS AS REQUIRED BY THE EU’S LOCALISM BILL GOING THROUGH OUR PARLIAMENT AT PRESENT etc, etc. MY GOODNESS, THE LIST IS ENDLESS.
    WITHOUT DOUBT THE ESM TREATY DOES REQUIRE A REFERENDUM HERE IN THE UK
    And this is from the ESM TREATY and just part of one Article-which our Prime Minister says we do not require a referendum on!
    ARTICLE 27
    Legal status, privileges and immunities
    1. To enable the ESM to fulfil its purpose, the legal status and the privileges and immunities set out in this Article shall be accorded to the ESM in the territory of each ESM Member. The ESM shall endeavour to obtain recognition of its legal status and of its privileges and immunities in other territories in which it performs functions or holds assets.
    2. The ESM shall have full legal personality; it shall have full legal capacity to:
    (a) acquire and dispose of movable and immovable property;
    (b) contract;
    (c) be a party to legal proceedings; and
    (d) enter into a headquarter agreement and/or protocols as necessary for ensuring that its legal status and its privileges and immunities are recognised and enforced.
    3. The ESM, its property, funding and assets, wherever located and by whomsoever held, shall enjoy immunity from every form of judicial process except to the extent that the ESM expressly waives its immunity for the purpose of any proceedings or by the terms of any contract, including the documentation of the funding instruments.
    4. The property, funding and assets of the ESM shall, wherever located and by whomsoever held, be immune from search, requisition, confiscation, expropriation or any other form of seizure, taking or foreclosure by executive, judicial, administrative or legislative action.
    5. The archives of the ESM and all documents belonging to the ESM or held by it, shall be inviolable.
    6. The premises of the ESM shall be inviolable.
    7. The official communications of the ESM shall be accorded by each ESM Member and by each state which has recognised the legal status and the privileges and immunities of the ESM, the same treatment as it accords to the official communications of an ESM Member.

    Reply
  2. Anne Palmer

    Can you explain THIS in full please so that we can ALL-all those that actually pay towards our MP’s to actually govern this Country according to its Common Law Constitution-so that we all understand what is meant by this debate and its outcome. What exactly have the others voted for?
    “23 Mar 2011 : Column 1063
    Deferred Division
    Section 6 of the european union (amendment) act 2008
    That this House takes note of draft European Council decision EUCO 33/10 (to amend Article 136 of the Treaty on the Functioning of the European Union with regard to a stability mechanism for Member States whose currency is the euro) and, in accordance with section 6 of the European Union (Amendment) Act 2008, approves Her Majesty’s Government’s intention to support the adoption of draft European Council decision EUCO 33/10.
    Page 3 of EUCO 33/10 states quite clearly “is conditional upon the subsequent approval by the Member states in accordance with their respective constitutional requirements.” As we may be forced to join the Euro if we remain in the European Union, see above entry, this alteration in the Treaty WILL affect ALL UK subjects of Her Majesty Queen Elizabeth 11 and the promised referendum must therefore, be held, for this Treaty Change affects us all.
    The House divided: Ayes 310, Noes 29.” You voted “NO” for this,
    Whether or not others understand this, in effect almost all of the Tory MPs have just voted in favour of the UK-at least, as I understand it- being forced to join the euro – not immediately. Is that correct? Or, am I reading this all wrongly?
    These are the ones below that actually voted for their own Country and true to their solemn Oath of allegiance and it I had my way, a plaque would hold all your names.
    Bone, Mr Peter
    Campbell, Mr Gregory
    Campbell, Mr Ronnie
    Carswell, Mr Douglas
    Cash, Mr William
    Chope, Mr Christopher
    Corbyn, Jeremy
    Davies, Philip
    Dodds, rh Mr Nigel
    Donaldson, rh Mr Jeffrey M.
    Drax, Richard
    Gray, Mr James
    Henderson, Gordon
    Hollobone, Mr Philip
    Hopkins, Kelvin
    Main, Mrs Anne
    McCrea, Dr William
    Nuttall, Mr David
    Paisley, Ian
    Percy, Andrew
    Redwood, rh Mr John
    Shannon, Jim
    Sheerman, Mr Barry
    Shepherd, Mr Richard
    Simpson, David
    Skinner, Mr Dennis
    Stuart, Ms Gisela
    Tapsell, Sir Peter
    Wilson, Sammy

    Reply
  3. Anne Palmer

    As I understand it, for a Treaty change all 27 Countries have to agree and then ALL have to ratify, to amend the original Treaty. Here in the UK for such a Treaty change the people are to have a referendum because any change NOW will affect every citizen here in the UK if ever it HAS to join the Euro in future. (Lisbon-The Currency of the Union shall be the Euro”).
    I am aware the UK has an “opt out” on this matter, it also had an “opt out” on the EIO and the first thing this present Government did when it came into power was to “opt in” to the EIO.
    However, Mr cash has made very clear when he said, “I hope he will agree that it represents a huge change in the relationship between the United Kingdom and the European Union”.
    So, the people MUST have their say. We have to look to our future and it is not bright. No ‘ifs’ pr ‘buts’ a referendum on this matter for without the people behind you, there will be no United Kingdom in the European Union at all if this promise is broken and more sovereignty is given away.
    While I am on and aware of the recent “Bail Out” etc. I am reminded of this which is perhaps a violation of the Treaty of Lisbon?
    Article 125.1 of the Treaty (consolidated version) which says:
    The Union shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of any Member State, without prejudice to mutual financial guarantees for the joint execution of a specific project. A Member State shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of another Member State, without prejudice to mutual financial guarantees for the joint execution of a specific project.
    At the very least, as our Country is “fined” extortionate fine for any minor misdemeanour of EU Regulations, isn’t it about time the Member States fined the EU for allowing such as this?

    Reply

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