Budget12: Fiscal Union? No thanks! Open Letter on Openness to President van Rompuy and Parliament President Buzek

Some government leaders and commentators are advocating what they call a FEDERAL fiscal authority to tax everyone and spread this money to governments. Some call this a supranational authority. It is not. It involves reinforcing secretive, cartel-style politics.

But would a FEDERAL fiscal union and a new "authority" help at all? It would tax more money from the public to help those who are already convicted by the facts and public opinion to be

• untrustworthy,
• crooked,
• distorters of statistics,
• in collusion with each other in fraud,
• liable to criminal prosecution under the treaties.

Nearly all governments have shamelessly violated the treaties such as the Stability and Growth Pact to control budget overspending and inflation. (In a Community system overspending and inflation involves stealing from Member State partners as well as deceiving national citizens.)

A fiscal union without openness or proper democracy is a fraudulent fiscal compact or a cartel compact.

In the face of a European Court judgement a few years ago, they shamelessly thumbed their noses at it and said it was up to them to decide whether they -- France and Germany in this case -- would be punished for this violation or not.

The European Central Bank has shamelessly violated specific articles of the treaties -- and done the exact OPPOSITE of what it was supposed to do, because an unelected, technocratic President of the ECB decided -- without asking the public -- that it was necessary to deal with the long-term fraud committed by politicians over decades.

Will a 'normal' FEDERAL-style fiscal union stop fraud among European politicians involved in tax and statistics scams? No. The guardians are the politicians themselves! The Commission has been shorn of all independence. It is a politicians' club.

Will it open up the present secrets of what they discuss behind closed doors? No.

Will it stop the international cartel of political parties acting in their own interests? Hardly, it will only encourage it.

ALL THE LEVERS OF POWER WOULD REMAIN IN THE HANDS OF THE PEOPLE WHO HAVE PROVED THEIR UNRELIABILITY IN THE PAST! -- THE POLITICAL CARTEL OF MAJOR PARTIES, COLLUDING TO THE DETRIMENT OF THE CITIZEN! No checks and balances but reinforced cartel-power!

Supranational means international democracy. Robert Schuman defined supranationalism in terms of democracy and openness -- which is precisely what the Council and the European Council or the EuroGroup are NOT practicing. They want more secrecy now to hide the past and present scandals and political collusion.

What is proposed has nothing of democracy or light about it. If they wanted a supranational institution, it would be dead easy. A complementary supranational institution already exists that would instill HONESTY supervised by taxpayers. But it is in cold storage -- thanks to the Council.

A supranational Community system is a democracy of democracies. We have 27 member democracies at present. WHY should the governance system of European Union be typified by the hyper-secretive EuroGroup or the European Council whose main characteristic is that they do not let the public know what they are discussing, let voters listen to what is said, let companies, associations, trade unions hear what their reasonings are or how the so-called democrats propose to tax and spend the citizens' money?

In the case of the EuroGroup it is not even an official institution of the Community or the EU and it is the EuroGroup that is now ruling the roost. Its chairman says he has to lie for Europe. So the citizens cannot trust even his information about when it will meet. It makes secret treaties, sets up a shady company in Luxembourg that employs government ministers and tries to lever money as if they were a bunch of Wall Street derivative crooks. They lack the expertise. They are already far from the 1.4 Trillion that was boasted about after they set up this ramshackle operation. (That is more than TEN times the annual budget of the EU!)

They lack open confidence of saying whom they are acting for (their parties or their nationals in Europe?) and even their identity (democrats, ministers or perhaps pseudo-bankers, or even conspirators against the too powerful markets?). The dog's tail of the parties is wagging and shaking the nations. The Euro Zone Heads of Government now meet in an huddle or conference that is in NO WAY DEFINED OR REGULATED BY TREATIES. They are not sure whether to call themselves a European Summit, the European Council (which they are not! They exclude the ten non-Euro Member States) or a Council of Ministers (which they are NOT, even though they fraudulently use its letterhead paper to say they are all honest!)

How can Europe get honest finances again? Supranational democracy requires that the Consultative Committees -- the bodies for democratic associations in Europe like the Economic and Social Committee, the Committee of Regions and the equivalent body in Euratom -- be elected based on (1) a reference list of relevant European associations (2) elections within the list of those properly registered associations for a smaller number of seats in the appropriate bodies. (This was part of the Founding Fathers' grand design for Europe and is still active in the body for NGOs in the Council of Europe but has been blocked by Council in the Communities.) The elected body would establish the rules for defining what is a democratic association and what is to be excluded as an unrepresentative lobby.

The Consultative Committee of the European Coal and Steel Community -- even though not properly elected on a European basis because European associations did not yet exist -- was able to control the finances and the budget of the pioneer Community and make sure that housing for miners etc paid out of the European tax did not involve corrupt practice and that the European tax of the Community was properly collected from all firms in the Community. Europe had a real European tax until 2002 -- but this was stopped by the politicians when they decided not to renew the Coal and Steel Community Treaty for another fifty years.

At the start of the first Community politicians delayed the implementation of the changes to make the Consultative Committee a truly European body. They preferred to choose the members themselves which was the interim agreement. Then de Gaulle tried to move the European government system of the Communities to French control inside the Council with its closed doors. De Gaulle is long gone but his undemocratic deformations remain. Can they be reversed? Yes. They will be when we have Europeans with moral courage and honesty. The process of justice and democracy is ineluctable.

We, the citizens, are still waiting for the present Consultative Committees to produce plans for THEIR European elections. Don't hold your breath. The European Parliament took decades to fulfill the minimum electoral requirements in the treaties and still has not once had a proper Europe-wide election under a single electoral statute as required by treaty law.

Such Consultative Committees -- if active -- would have prevented the decades of corrupt and fraudulent practice among Member States, the bad construction of the euro and the present mortgaging of the future planned behind the closed doors of the European Council and the EuroGroup. (See the budget series on http://democracy.blogactiv.eu and the commentaries at http://www.schuman.info/news.htm )

The Consultative Committees should have specialized subcommittees on monetary affairs, representing various types of associations of taxpayers. These would be open and would eliminate much of the comitology -- which is neither open nor democratically approved.

Meanwhile both Parliament and the European Council make sure that Budget matters are dealt with the doors closed to the public.

What is to be done? I wrote to both presidents asking for justification, morally and legally, for what is clearly UNdemocratic practice. The following is the latest correspondence.

5 December 2011

Mr Herman Van Rompuy
President, European Council

Dear President van Rompuy,
A year ago I sent a letter asking for the legal and moral justification that the European Council closed the doors on meetings on the taxation of European citizens and budget expenditure matters. This is in opposition to the articles of the Lisbon Treaty. The treaty says clearly that all such matters, especially those dealing with the earliest consideration of legislation, should be dealt with openly. Morally, all Member States adhere to the principle that there can be no taxation without fair and open representation, which is then the basis for public awareness and public consultation. Consultation is impossible if the consideration of such vital financial matters is presented cut and dried by politicians, without public access to the debate so they can employ the means in the treaties to influence the decisions, to ensure control and provide adequate inspection of the results through properly elected Consultative Committees.

The public is showing increasing distrust of politicians and so are markets. This lack of open responsibility has now resulted in proposals for trillion euro operations mortgaging the future of the next generations. Even before the European Council was designated an institution in the Constitutional and Lisbon Treaties, it had the moral obligation to have open meetings. It did not. That was the reason that a decade ago the principles of openness were written into the treaties. Half a century ago Robert Schuman said that "the Councils, the Committees and the other organs {of Europe} should be placed under the control of public opinion."

Secret political 'deals' of the past are now paralyzing Europe. Why is the principle of openness and democracy still not being respected? European finances are not the property of politicians.

I am therefore sending this reminder, as I believe the public has a right to know the legal and moral opinion why the European Council deems it can close the doors while attempting to extract tax money and design its plans for spending public money.

Many thanks for your help in this matter.

Yours etc

A reminder letter was sent to President Buzek of the European Parliament with this complaint introduced to the European Ombudsman for non-response.

The Parliament has not replied to my letters. They deal with my exclusion, press exclusion and exclusion of the public to matters of primary importance to all, namely, holding secret, closed door meetings on taxation of European citizens and use of the budget.

I was excluded from meetings as noted in the correspondence. President Buzek's earlier argument made for exclusion is not logical or consistent. The Parliament excludes journalists and the public whether or not the Council is involved.

The Parliament says it upholds the principle of open meetings. As for the Council setting the rules in prima facie violation of the treaties, there is a simple way to resolve any potential 'bullying' of the Parliament by the Council. That is to get a ruling by the Court of Justice on such articles as Article 15 TFEU and general principles of taxation and open representation.

For decades the institutions involved which are supposed to be independent and sovereign have refused to do so, being submissive to Council. The public which is the most important partner in the taxation debate should under no circumstances be excluded from discussions among politicians who have their own agenda and interests that are not identical with their electors (the voters are a minority of the electors who increasingly refuse to vote) or the public in general. All the institutions were created for the citizens, not for the political parties who are now (often contrary to the treaties) firmly ensconced in all the institutions, save the Court.

Euro1 : Why is the European Central Bank President still the politicians' plaything?

Should EU's politicians, in the middle of a great financial crisis, still be trying their old dirty tricks? At the centre of the euro is the European Central Bank. The chief executive, the president or governor, is its guardian. The treaties say that he represents the bank in his or her person. All citizens using the euro have an interest in his integrity, experience and wisdom. This implies that the ECB president must personify the integrity of European money for the European economy and far beyond the eurozone.

How then is the ECB president selected and confirmed in office? Should he be both nominated and chosen by the politicians? Think about the mischief politicians get up to in fiscal fiddles, bribing the electorate for votes and dissembling the statistics. I am not just referring to the Greek and Latin problems of the Mediterranean countries. At the June European Council the Hungarian Prime Minister Viktor Orban said his country's (previous) government was involved in 'skyrocketing debts' and 'falsified statistics'.

Thus even at the European Council announcement of the ECB presidency, one politician throws the spotlight on the untrustworthy nature of this political class and the disastrous effects they have on sound money policy. Politicians are not the sort of people that can be trusted with the monetary printing press. Non-party guarantees are required for a real democracy. This is why Robert Schuman and the Founding Fathers designated key institutions as being independent and run by independent personalities to ensure democratic freedom of choice.

The main political parties acting as a cartel have tried to take over the democratic supranational Community system by substituting their party members in places designated for non-political organized civil society. Wherever possible in the key institutions they camouflaged their take-over.

A bank should be run honestly based on agreed technical rules, not according to a political ideology or a egotistical whim that 'runs up skyrocketing debts' and 'falsifies the statistics.' The euro was built to stop this. Membership requires discipline -- hands out of the till. There should be a clear demarcation between the European Bank for the euro and politics. We should also emphasize here that all eurozone States must agree by law that the governors of their national central banks must be selected independently. It is not an option. It is treaty law. National Central Bank Governors in the eurozone must be free to act with total independence of the politicians, governments and 'any other body'.

In general governments do not wish to be seen placing as head of their national bank a party hack responsive to party orders. They should advertise the vacant post in the press. They have a separate Statutory Board that selects the most experienced and independent banker for the task.

What happens at the European level -- that is the stratum of big, big money? The politicians think that they can totally discard this rule of independence. A candidate is chosen in secret, maybe in the ultra-secret Euro Group meeting. Who are the members of the Euro Group? They are all politicians. The chosen name is then passed on to the Council of Ministers. Who are the members of the Council of Ministers? Yes, they are all politicians! Then the name is confirmed by the European Council. Who are the members of the European Council. Right again, they are all politicians!

The secretive system of a political cartel is the opposite of what citizens expect in a democracy. Secrecy encourages lying and that encourages speculation. It is now well known that several members of the Euro Group built up and hid 'skyrocketing debts' and colluded in 'falsifying statistics'. A more open, supranational system would calm the markets and encourage trust and growth. Who knows more about the dirty little secrets of all the other Member States than the 27 intelligent men and women of the European Council?

According to the Lisbon Treaty, the same legal requirement of absolute independence applies to the President of the European Central Bank, as it does to the national bank governors. It is all specified with clarity in articles 130 and 131.

The politicians try to wrap the election of the ECB president in language to ensure thick opacity and murkiness. The dirty little political trick is called 'pass the parcel'. The wrapping is a distracting colour that turns the public's eye away from its contents. (It is announced amid many much 'hotter' issues at the European Council.) Who defined the contents? No one can be sure. The parcel has been quickly passed from one committee or council to another. When a journalist asks: where did the parcel originally come from? The one who has it last -- the European Council -- points to the person on his left, a Council of Ministers. But everyone is sitting in a circle and the parcel goes round and round until it stops at the heads of government. These top politicians are most probably the real culprits who wrapped up the contents in the first place. They have the motive, the opportunity and the machinery. They will gain from the crime. Politicians want to control the money supply, the statistics and the definitions of the currency.

The 17 May Council of Economic and Financial Ministers had this to say:

"The Council adopted a recommendation on the nomination on Mario Draghi (Italy) as President of the European Central Bank, to succeed Jean-Claude Trichet...'

Who recommended the candidate? Was it the finance ministers? It does not say. Was it someone else? If they are referring to 'a recommendation' of the Euro Group, why don't they say? And whoever it was making the recommendation, what were the criteria for the choice? When were they published? How did they choose this one person from among Europe's 500 million? There must be a lot of bankers with Wall Street or City experience who would like to apply for the job. Why weren't some honest bankers considered? Did the ministers have a list after a public Call for Candidates in the Official Journal? No one saw the advertisement. If the post of ECB president is paid from taxpayers' money and public funds, it should come under the usual rules for selecting and hiring civil servants. Surely the politicians would not want the public and the markets to think they are involved in political patronage and nefarious nepotism?

If the politicians did not act impartially to choose an independent governor, are we to assume the new ECB president is not impartial and has as a covert task the mission to save the politicians' hides? How can anyone know if the politicians are concerned that a governor shows no favouritism to any Member State? In other words: is his nationality irrelevant? The sole criteria for the appointment should be independence, experience and integrity.

The president should have enough strong character and experience to deal with dire situations where politicians gang up against him to try to bastardize the currency. The ECB president should have metal to resist the politicians. He should not be the politicians' plaything. The new candidate has several stripes against him, deserved or not.

It is educational to recall what happened at European Council in 1998 and the first selection of the governor of the Central Bank. The site of the ECB was chosen as Frankfurt. What has that to do with the choice of governor? A lot in Gallic eyes. The French president of the Republic said that as the ECB was in Germany the governor should naturally be French. (Don't you love the way the French use naturellement?)

But hang about! Aren't there a few more States besides France and Germany. Aren't there a few States who have an economy even sounder than France's? Doesn't France get involved in some dubious monetary practice from time to time?

France did not get its way and Wim Duisenberg, who had headed the pre-euro European Monetary Institute, was confirmed as the first governor. He was previously governor of the Dutch central bank and had ample experience. Before Duisenberg, the EMI was headed by Hungarian-born Alexandre Lamfalussy, a respected economist and international banking adviser, from Belgium.

The Germans, the Belgians and Dutch said NON to the French. They told them that they wanted to have a strong euro. They did not want someone who 'bent' the rules and did not defend the ECB's independence. A nasty fisticuffs occurred. In the end the French lost.

The French declared afterwards that a compromise had been reached. In the margin of the European Council they said that all agreed that (1) Mr Duisenberg could stay on -- but only for a bit and he should resign half way through his 8-year term (2) their named French candidate, M. Trichet, should then take over.

To any rational observer this would fail logic and fairness tests. It assumed that (a) Mr Duisenberg would want to resign and in fact he stayed on rather longer than the French wanted, until November 2003; (b) that M. Trichet would also be around, healthy and capable and hadn't in the meantime wandered off to Wall Street to make a private fortune; (c) that the "gentleman's agreement" (that is the outcome of the European CouncIl wrestling match) would bind the still future European Council with slightly different political wrestlers; (d) that no other candidates from the 25 other Member States would be allowed to place their name forward; (e) there would be no public call for candidates in the Official Journal from all the aspiring European bankers. In other words the heads of government were convinced that this illegality could continue for a few more years.

In the end the French managed to hold this conspiracy together. How? Possibly because it was a political cartel agreement -- held together by party political secretariats. M. Trichet was eventually made the ECB governor. Imagine a private Bank with 27 major shareholders where the CEO was fixed in this way. What an uproar would ensue at the shareholders' meeting. What court cases there would be!

The European Council's 'fix' says more about the secret forces holding this particular political dirty deal together and total lack of free choice in the way the head of the ECB is chosen. It says rather less about democracy and the high-minded principles that should be involved and the financial legalities.

I asked earlier: Who knows more about the dirty little secrets of all the other Member States than the 27 intelligent men and women of the European Council? The figures about debts and fraudulent statistics are coming to light. Yet the European Council is perpetuating the same sort of secret system in choosing the ECB president.

It bodes ill for the public because it is a clear indication of the corrupt nature of EU politics -- even when faced with a horrendous crisis of the euro and the financial future of several Member States.

It is not the sort of behaviour that reassures the markets, the speculators and the private bankers. Only a democratic, supranational monetary system can do that. It will take some time to remedy and solid democratic institutions are needed ... or the Court.