ESM – The Vehicle For Undermining National Sovereignty

I had an exchange with Country Codger about the possibility of the return to the DMark. Let me show you, how unlikely this is with the current political powers and their determination and commitment to the Euro, without regard for the costs.

By now, every interested individual knows, that the Euro is on the brink of collapse and with it possibly the whole European Union. I do not want to address the why’s and how’s but instead want to show you how our politicians , instead of acknowledging past mistakes and taking measures to withdraw from a doomed system, take the opposite way of perpetuating the old way to it’s inevitable collapse. And in the process, try to steal our freedoms, sovereignty and of course our wealth.

The ESM or European Stability Mechanism is a proposal for a treaty between the European states, which is to replace the now expiring ESFS and ESFM. The treaty’s proclaimed goal is to “ensure the financial stability of the euro area”

I also do not want to discuss how and if this goal can be achieved by this treaty. Let me just state that in my opinion it will be able to postpone the inevitable. Instead I want to show how, if the ESM is to be passed, what it would mean for European states.

You can read the whole proposal here: http://consilium.europa.eu/media/1216793/esm%20treaty%20en.pdf

I will focus on the points I find most disturbing from the point of view of a Euro country’s citizen.

The first pages describe the board of governors and other administrative things.

The fun starts with Chapter 3 Article 8.4

4. ESM Members hereby irrevocably and unconditionally undertake to provide their

contribution to the authorized capital stock, in accordance with their contribution key in Annex I.

They shall meet all capital calls on a timely basis in accordance with the terms set out in this Treaty.

“irrevocably and unconditionally”?

Wow, those are pretty strong words. Sure there is a way out of this, right?

Well if you find one, let me know. Maybe I skipped it somhow.

Article 9

1. The Board of Governors may call in authorized unpaid capital at any time and set an

appropriate period of time for its payment by the ESM Members.

 

3. […] ESM Members hereby irrevocably and

unconditionally undertake to pay on demand any capital call made on them by the

Managing Director pursuant to this paragraph, such demand to be paid within seven days of receipt.

 OK, so at any time, the ESM members may be called to pay the “authorized” sum by the ESM Board. And in that case again they “irrevocably and unconditionally” commit to pay those Euros.

But what is the authorized sum and who authorizes it?

Article 10 clears that up for us.

 1. The Board of Governors shall review regularly and at least every five years the maximum

lending volume and the adequacy of the authorized capital stock of the ESM. It may decide to

change the authorized capital stock and amend Article 8 and Annex II accordingly.

 OK. The ESM Board of Governors can increase the capital stock at any time, they feel there is a need for it. Like the very unlikely event of a member needing bailouts or such …

Article 17 regulates the possibility of taking credits:

1. The ESM shall be empowered to borrow on the capital markets from banks, financial

institutions or other persons or institutions for the performance of its purpose.

 2. The modalities of the borrowing operations shall be determined by the Managing Director, in

accordance with detailed guidelines to be adopted by the Board of Directors.

Wow now we are talking power! No need for national parliaments to decide anything like they have to now with the ESFS and ESFM. Just join the ESM and the Euro rescue team is on it’s way.

Well with this kind of power, there are surely major supervisory bodies being enacted right?

Well let us see.

Article 27

1. To enable the ESM to fulfill 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.

 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.

 8. To the extent necessary to carry out the activities provided for in this Treaty, all property,

funding and assets of the ESM shall be free from restrictions, regulations, controls and moratoria of any nature.

 9. The ESM shall be exempted from any requirement to be authorized or licensed as a credit

institution, investment services provider or other authorized licensed or regulated entity under the laws of each ESM Member.

 ARTICLE 30

Immunities of persons

1. In the interest of the ESM, the Chairperson of the Board of Governors, Governors, alternate

Governors, Directors, alternate Directors, as well as the Managing Director and other staff members

shall be immune from legal proceedings with respect to acts performed by them in their official

capacity and shall enjoy inviolability in respect of their official papers and documents.

 Nope. No supervision. Just immunities, inviolability acts and exempts.

So as I see it, the ESM shall be an instrument of unlimited power to fund failing Euro states with money from not yet failing states which must be paid within seven days …

When this  is not enough, say, when the stronger states overstretch themselves, than the ESM can borrow the needed money from banks.

National governments have now way to leave the ESM once they have joined. There is no mention of an exit strategy for national governments and no end date to the ESM treaty.

The Board is virtually immune to prosecution and the ESM documents and assets are untouchable meaning, that no government can verify the ESM’s operations nor can it be prosecuted in case of fraud or mismanagement.

It is notable, that Germany’s share in this transfer union is over 27%. So more than 1/4 of the ESM funds are to be taken from German taxpayer money. The German economy is the strongest one in Europe, but how long will we last, when the ESM is ratified?

What is even more notable is the fact, that the ESM is almost nonexistent in the official debate. One might think that a creature like this, clearly violating all national sovereignty and the German constitution would be on the front pages of all papers. But no. There is a small opposition in the liberal party, which at least managed to postpone the ratification from October 2011 to 2012.

 

 

6 comments to ESM – The Vehicle For Undermining National Sovereignty

  • Gareth

    The media shills are selling it as a solution on these shores, Prudentis. There also stating how we’re not directly liable for the euro without mentioning the increased contributions to the IMF – something that’ll effect the $US too. They’ll kick the can down the road as long as they can on the euro, I’m afraid.

    Fortunatly, unlike in the 30s, it’s difficult for psychopaths-in-charge to pit the Brits against Germany, as we know full well whom the enemy is, and it most certainly isn’t the regular German citizen.

    Peace from England to those in Germany, bud.
    Good Luck

  • Cunning Linguist

    Is anyone really stupid enough to think that this is a good idea???

    I know it reads very heavy in legalese, so probably most politicians will vote one way or the other without really understanding/comprehending what it all means.
    Kinda like our 8 bazillion page “Patriot Act” was passed. Out of expediency rather than careful thought.

  • Prudentis

    Sadly, it is even worse than that.
    The wohle ESM treaty has only 55 pages and half of it is describing the composition of the board of directors and their appointment and such.
    The really important stuff is pretty well compressed and quite easy to understand.
    And yes, there are many polititians in the German parliament, who can’t wait to pass this thing, and leading them is our “beloved” chancellor Merkel.
    It is only because of a “renegade” group of the liberal FDP (called the rebels by the media) that the thing has not been presented yet in October. Because chances were too big, that it would fail, they postponed it.

    But there is always hope. Just yesterday the German Supreme Court in Karlsruhe (Bundesgerichtshof) put a stop to the “ESFS extraordinary board” (ESFS Sondergremium) which was given extraordinary rights for example to increase the ESFS funds and to omit the parliament if “immediate” action for Euro stability was needed. In a speedy trial innitiated by two SPD politicians Swen Schulz and Peter Danckert.
    But only two of 620 delegates had the integrity to do it.

    The Supreme Court in Karlsruhe has a history of overruling unconstitutional governings but has repeatedly appealed for more self control by the legislative.

  • Country Codger

    WOW! Good article. I heard a flushing sound and I think it was Eupopean nations’ sovereignty. Hope they washed their hands.

    THanks Prudentis.

  • rainmaker

    I saw a funny T-Shirt on the Daily Reckoning: Save the Euro, Adopt a Greek.

    We are interested in how the Europeans feel about this, even moreso the Germans. Thanks Prudentis.

    This article from the Daily Bell is interesting:

    http://thedailybell.com/3160/Anthony-Wile-Could-the-Euro-and-Dollar-Go-One-to-One

  • Prudentis

    Yes, a very interesting article, indeed.
    Slowly I get the feeling, that the game is now, which major currency fails first.
    It is like a game of grenade toss, where the players toss a life grenade back and forth until it explodes.
    Even though it slowly dawns on both of them that the blast will kill all, still noone wants to be the one holding it when it blows.

    Most Germans know, that the ESFS and other “rescue operations” can only postpone the inevitable and the favored scenario is for letting the weaker Euro countries leave the pact. Things like returning to the DMark or splitting the Eurozone are very hot topics for “mainstreet” Germans but are no real options in the political debate.

Support our fight with a one time donation.

colloidal-silver-hydrosol-banner-175x263

Over 300+ Videos