 Thank you very much indeed. It's very nice to be here at the pinnacle. I suppose there's only one way from here after that, I think. But I'll do my best nonetheless. I think you've been provided with copies of the paper, so I'll be skimming through what's in that. You won't need to take notes, any of those of you with pens and notepads out, which I know is distressingly few anyway, but most of what I'll have to say will be there. But a couple, I was asked to elaborate on the thoughts that I've had on the paper, and I have had a few subsequent ones anyway, so I may add those in as well. All right, what I wanted to do was basically to talk about various aspects, to talk about the proposed treaty amendment and why it's there, and basically to talk you through that and a few other aspects of it, and then maybe after that to look at the constitutional aspects of it as well, and I understand Paul is going to be talking through some of the same areas, but in a way hopefully that won't overlap too much with what I have to say. All right, well let's start where it all begins with the Treaty of Lisbon, which as we know entered into force on the 1st of December two years ago. Less than a year later, to the surprise of a lot of people, the member states had already agreed on the need for a significant treaty change concerning economic governance, and that's the reason why we're here today. Last October, the heads of state and government agreed on the need for member states to establish a permanent crisis mechanism to safeguard the financial stability of the Euro area, and they invited, they set and trained the necessary process, inviting Herman von Rompuy, who was here of course just a couple of days ago in Dublin, to undertake consultations with the members of the European Council on a limited treaty change required to that effect, and actions rapidly followed those particular words. Just by February of this year, the European Council was able to confirm that its March meeting would adopt a final decision on treaty change setting up the so-called what was now to be called the European stability mechanism. And in fact, it has been as good as its word. It did that and a great deal more. The European Council of the 24th and 25th of March achieved what Peter Ludlow, well-known commentator in European Affairs, called a grand bargain on the economic governance of the Euro area. And what he meant by that was five separate features, basically, something called the Euro plus pact, which doesn't just extend to the Euro countries, but to 23 of the 27 member states, Hungary, the Czech Republic, the United Kingdom and Sweden have stayed out of that, but it's still a fairly hefty agreement taking in 23 of the states, encouragement regarding the so-called six-pack of draft legislative proposals on economic governance, including one replacing the stability and growth pact. Priorities for structural reforms and fiscal consolidation in the context of what's now to be known as the European semester, and we've just seen that come into action this year for the first time, it endorsed the main features of the European stability mechanism and the treaty establishing that, the international treaty establishing that, I understand, is now due for signature on the 11th of July. It adopted a decision amending the treaty on the functioning of the European Union and that's why we're really here today or what we're talking about here today, and they called for the rapid launch of national approval procedures in relation to that. And as I said, it has been referred to such as the, if you like, the change in economic governance, a change that would have been unthinkable I think even a year ago, that it has been referred to as a grand bargain by Peter Ludlow and the European stability mechanism and the treaty change being undertaken to facilitate that is very much part of that. It's not actually the first post-Lizban amendment sought to be made. There was actually unbeknownst to most of us an intergovernmental conference held on the 23rd of June last year which adopted a proposed amendment already to a protocol concerning the European Parliament and that amendment was basically designed to ensure that those member states which would have gained extra seats had the Treaty of Lisbon come into force before the last European Parliament elections actually got them on a transitional basis even though the Treaty of Lisbon entered into force after the last European Parliament elections. But the European stability mechanism amendment that we're talking about today is the first proposed amendment to the actual treaty text. The other one, the previous amendment, was only to a protocol attached to the treaty. Now I want to say a few words about the means that are being sought to use to amend the treaty. The Lisbon Treaty, as some of us know, introduced altered procedures for amending the treaties. Prior to these changes there were really only two methods that were used to amend the treaties. One consisted of accession treaties, the latest accession treaty being the one that concerned Romania and Bulgaria, of course. They can and do amend the constitutional treaties of the European Union. But the main method for amending the treaties, of course, as we're intimately familiar with in Ireland consists of basically intergovernmental conference green changes and then national ratification. It has a number of disadvantages going with it. It's a slow process. It's lacking in transparency and democratic control. Very cumbersome for merely technical amendments. So some disadvantages attached to that. And that's the reason why the Lisbon Treaty replaced that more or less one-lane method of amending the treaties with the kind of four-lane motorway, if you like, for treaty amendment. Now the first of the four lanes is the so-called ordinary revision procedure. And that's basically the same as the old Article 48 procedure. But with some additions tacked on the so-called use of a convention in drafting, at least initially, the treaty, and greater involvement on the part of the European Parliament, the European Council, and indeed national parliaments. And that was the method that was used for the first, minus the convention at least, but it was used for the first purported amendment, the European Parliament amendment, which actually still hasn't come into force because it hasn't been ratified by all of the member states. Now apart from that method, which was used on the first occasion, three separate simplified revision procedures, fast lanes for treaty revision, were introduced. It's only the first of these that we're interested in looking at today because it's this one that has been used to amend, or is being sought to amend the treaties on this occasion. Each of the fast-track methods for amending the treaties, if I can call them that, empowers the European Council to amend the treaties. So it's the actual institution that amends the treaties by unanimity, but the need for an intergovernmental conference and convention is eliminated. So the European stability mechanism, as I said, uses this first simplified revision procedure, or this Article 486 procedure, it's probably a faster way of referring to it. The procedure applies only, it can't be used for the entirety of the treaty, it can only be used in relation to Part 3 of the treaty on the functioning of the European Union, which has seven parts in total, but it's a fairly hefty chunk of the treaty. It basically deals with everything that has to do with the single market. It's 78 pages out of 282 pages of treaty text, but for all that, it's mostly material that would normally not find its way into a national constitution. So it deals with things like the internal market, free movement of persons, and vitally there, as you can see highlighted in red there, economic and monetary policy. And that's why it's been capable of being used in relation to the European stability mechanism amendment. Now the procedure for this amendment, the way in which it's used is that any government or the European Parliament or the Commission can submit to the European Council proposals for revising some part of Part 3, and the European Council can adopt a decision, which it did in relation to the European stability mechanism in March, as I mentioned. In doing so, it acts by unanimity, so every Member State has to agree to the change in question. It consults the Parliament, the Commission, and the European Central Bank if it involves changes in the monetary area, which this one did, so the European Central Bank was consulted in relation to it. And the decision vitally doesn't enter into force until it's approved by the Member States in accordance with their respective constitutional requirements. So in other words, if before the Treaty of Lisbon you required parliamentary approval, if it was required in all Member States, you need it afterwards. If before the Treaty of Lisbon you needed a constitutional referendum, you need a constitutional referendum afterwards as well. So the main, if you like, accelerations provided by this are the main changes, if you like, provided in using this method. No need for an intergovernmental conference, no need for a formal ratification process as such, although for all the difference it makes, I suppose it might as well be one. There's no need for a convention of the kind that drafted up the constitutional treaty, but the other side of it, there's a retained requirement of union enmity, so every Member State has to agree to it. The Member States have to have the decision approved in accordance with their constitutional requirements, and vitally, and this does come into play in relation to this, the European stability mechanism, the decision under Article 486 must not increase the competences that are conferred on the union under the treaty. So you can't use this method for amending the treaties in order to increase the competences of the European Union. Okay, now having discussed, if you like, the amendment process, what I want to turn to now is the reasons for a European stability mechanism. Now it was always foreseen, I think, that economic and monetary union would require some budgetary discipline on the part of, or at least it was hoped that it would involve some budgetary discipline on the part of the participating Member States, and that's why we had the so-called stability and growth pact. That was originally provided as an arrangement for seeing to it that that discipline would be provided. Unfortunately that collapsed in all but name over the unwillingness of the Schroeder and Schirach administrations in Germany and France to allow sanctions to be applied to their particular countries, and of course once it wasn't applied to them, they didn't want them applied to them either. The bailout of Greece in April 2010 and the setting up of the rescue mechanism in May 2010, which we in Portugal have now benefited from, returned economic governance to the agenda though with a vengeance. Now treaty change was nowhere on the agenda until a little seaside walk was taken by two prominent individuals in the French coastal resort of Deauville, and it's amazing what little walks on the beach can lead to because they sent I think the dispatch from Deauville, I think it was referred to by Jean-Claude Juncker, the President of the Eurogroup who was none too impressed with it, but anyway, and it actually called for treaty changes setting up a crisis mechanism, a bailout fund effectively for the Euro. So what we saw was a permanent and robust framework. It's a one-page document to safeguard financial stability in the Euro area as a whole, and in case of serious violation of basic principles, it actually suggested that the voting rights of member states concerned be suspended, and it also suggested that a necessary treaty amendment could be put in place before 2013. Now it caused outrage and I think particularly the suggestion concerning the suspension of voting rights of member states met with some objections on the part of member states, but eventually the idea of amending the treaties did, did if you like, gain acceptance on the part of all of the other member states. I want to spend a little bit more time explaining why that is the case and explaining the present position in the treaties. At the moment what we have in the treaties is a so-called no bailout clause. Now you can see that up on the overhead in front of you there. It's found in article 125.1 of the treaty on the functioning of the European Union, and I'm not going to read the whole thing, but it basically has two limbs to it. It says that the union shall not be liable for or assume the commitments of public authorities of the member states, and then you can see down in the middle of it there it says that a member state shall not be liable for or assume the commitments of the public authorities of member states. Now there is an exception to that, and that exception is found in article 122 of the same treaty, and that allows financial assistance to be granted to a member state where a member state is in difficulties or is seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control, and it's that clause that was relied upon in order to provide financial assistance on the part of the union to Greece and subsequently to set up the rescue fund that both Ireland and Portugal availed of. Now Germany was instrumental, if you like, in having the original Nobel out clause put into the treaties, and German public opinion is very strongly in general against the idea of transferring money to, I would say, less fiscally responsible member states, so it might come as something of a surprise to learn that in actual fact the idea for amending the treaty to provide for the European stability mechanism actually came from Germany, and the explanation for that was concerned regarding the potential implications of case law that's going on in Germany at the moment before the German Constitutional Court, the Bundesverfassungsgericht, in which the assistance being provided to Greece or which has been provided to Greece and the rescue fund which Ireland and Portugal are benefiting from was challenged, and the danger in relation to this was that there would be an implicit risk to future such initiatives and also a fear of market pandemonium on the expiry of the current temporary arrangements without a legally secure replacement being put in place, so there was concern about that and that was the reason, if you like, why the amendment was being called for. The Brussels European Council in October last conceded that treaty change should occur but only regarding the first of the Dover demands, so a permanent crisis mechanism but no thought, I think, of suspending the voting rights of member states which I think is wholly appropriate. That was an utterly inappropriate suggestion to have been made. By November of last year, the Euro-area finance ministers reached agreement on the stability mechanism and on the need for treaty amendment, and they made a series of policy choices in relation to the stability mechanism, and by December the European Council formally agreed that the treaty was to be amended, the content of the amendment, the date in which it would come into force and its relationship with the existing rescue mechanisms, and the idea is basically that the European stability mechanism will replace MVEFSF and the EFSM, the current rescue mechanisms, they'll remain in force until June 2013. The idea then is that from then on where it's article 122, will then no longer be used to safeguard the financial stability of the Euro-area as a whole, so I suppose perhaps reflecting disquiet on the part of some member states that it had been used for that purpose already. So the proposed amendment, well there's the wording over there, the paragraph is a short paragraph, paragraph 3 be added to article 136 of the TF-EU, and it says simply that the member states whose currency the Euro may establish a stability mechanism to be activated and indispensable to safeguard the stability of the Euro-area as a whole. The granting of any required financial assistance under the mechanism will be made subject to strict conditionality. The words if indispensable and any were added by the German government at the last minute in relation to that so they're clearly not keen on recourse being had to this in any but the most extreme circumstances. The European Council launched the simplified revision procedure and the timeline which has been adhered to insofar as it applies today has been formal adoption of the decision in March 2011, that has now happened. The idea is that national approval procedures will be completed by the end of 2012 and that it will enter into force by January 2013. I don't know if the national approval procedures will be gotten through that quickly, it certainly hasn't happened in relation to the first amendment which is still underway, I understand but that is the plan in any case. The December European Council also called on finance ministers to finalise work on the intergovernmental arrangement and that word was there very prominently setting up the future mechanism by March 2011 and that basically is most of what has to be said in that regard just two observations that I'd like to make about the foregoing. The first is that this is yet another occasion I think it can be said when a group of European Union member states which have engaged in enhanced cooperation have found themselves stimulated by virtue of that enhanced cooperation to engage in yet deeper cooperation because that's what's going on this year. We've already seen that for instance in relation to the Schengen agreement where a future cooperation in that regard has led to many initiatives building on that and the 1993 social policy agreement which had basically the same effect so just a note in relation to that. Second point of interest I think is the reference that the arrangement setting up the stability mechanism, the intergovernmental something of a trend at European level at this stage. Not great days if you like for the community method at European level and something perhaps which should concern smaller member states like Ireland which do benefit I think more from the community method than via intergovernmentalism. Next topic, does Ireland need a referendum on this European stability mechanism? Well of course the main test in this regard which I think Paul is going to be looking at in more detail than I will be going through it fairly quickly stems from the Crotty decision of 1987 and basically you can see in the words of Mr. Justice Finley they are very eloquent words indeed that to hold that the relevant portion of article 29.4 doesn't authorize any form of amendment is too narrow to construct as an open ended authority to agree to any further amendment is too wide and basically the test that is therefore applied in relation to the Crotty test is that the essential scope and objectives of the treaty if they are overstepped the existing treaties are overstepped then the existing immunity in relation to European Union measures doesn't apply so that is the test that we're talking about there. Now the Crotty case had legal and political consequences I think in legal terms it give rise to some uncertainty as to when a referendum would be recorded and when it would not and to understand Paul will be having a look at that in terms of political consequences I think it gave rise to a feeling on the part of many that any major European treaty would be associated with a referendum in Ireland certainly since Crotty we've had a total of seven referendums on five separate European amending treaties at this stage now in many respects the Crotty case was actually quite a broad approach so if you think back I know it's a long time ago to the single European Act but most of the reforms that were included in that actually passed muster under the Crotty test they weren't regarded as going beyond the essential scope and objectives of the treaty so the manifold changes to qualified majority the identification of new topics to be looked at significant institutional change the facilitation of the creation of the court of first instance and the empowerment of the council to adopt health and safety measures by qualified majority they all passed muster under that particular test it was only title three of the single European Act involving cooperation in the foreign policy field that if you like fell in the second part of the Crotty judgment now let's apply the Crotty test to the European stability mechanism and the amendment and see where it takes us in relation to that I've given some thoughts in the paper in relation to this I've added a few at this point as well which is referred to in the overhead now let's remind ourselves that's the amendment I've already read through it I won't go through it again so the question that we're asking ourselves is does an amendment like that go beyond the essential scope or objectives of the existing treaties so as to require a constitutional amendment it's ratification and there are six points that I want to make in relation to that I've given away my views in relation to that but I suppose anyone who's had a look at my paper will probably be aware of them anyway the first point that I wanted to make about this particular amendment is that arguably it doesn't increase the competences of the union certainly the European Commission has expressly stated this in its view in its opinion on the amendment in question if I can quote directly from that it has said that it does not involve creating a new legal base which would allow the union to take action which was not possible before this treaty amendment but significantly it hasn't just been the commission that has expressed this view the member states have obviously also taken this view and the reason we can say that is because they have relied on article 48.6 of the treaty on the functioning of the European Union and you will recall that I told you that that particular provision may not be used to increase the competences of the European Union so if you like they have staked the validity of this particular amendment on the view that it doesn't increase the competences of the European Union further on that particular point we can say that the amendment may not alter the legal capacity of the union at all and by this I mean that if the existing bailouts, so-called bailouts of Greece Ireland and Portugal are legal well then why should there be any legal block on a more permanent mechanism in that regard in other words if the existing ones are legal doesn't that mean that the permanent mechanism is legal as well but let's assume that I'm wrong in that regard and that the amendment does alter the competences of the union well in so far as it does so it arguably reduces it by actually shrinking the obstacle posed by the article 125 no bailout flows on member state action in other words it reduces the capacity of the existing treaties rather than increases them in other words member states are effectively liberated by this particular restriction which was imposed on them by article 1251 sorry there it is just there in front of you again and they intend to use that new found liberty in order to sign a treaty setting up the European stability mechanism so if you look at the no bailout clause the first clause of that provision by the way remains in place the first clause of it says that the union shall not be liable for various public debts the second clause of it says that a member state shall not be liable for and it's only the second part of that if you like that is being affected by this particular amendment that the restriction is being taken away from the action if any change is being affected a restriction is being taken away from the action of the member states so that's the third point that I'd make in relation to that but let's assume that the member states and the commission have gotten it entirely wrong alright and that the effect of the proposed amendment is that it will increase the competences let's just ignore article 486 for a minute and assume that it will increase the competences of the European Union but even if that were the case even if that were somehow possible for the treaty change to be viewed as increasing the competences of the European Union that would not necessarily of itself create a problem under the Crotty test and we can see that from the first part of the Crotty judgment in which it was indicated by Chief Justice Finlay giving the judgment of the court that the increase in order to be problematic must alter the essential character of the Union you see that on page 770 of the judgment and it indicates on the same page that expansion and progress is allowed in the mechanics used by the European Union in the achievement of its agreed objectives now economic and monetary Union has been an agreed objective of the European Union since the coming into force of the Treaty of Maastricht in 1993 and what is this the European stability mechanism other than an expansion and progress in the mechanics of achieving economic and monetary Union between the member states looking at the second part of the Crotty judgment it notes that treaty provisions condemned in the it's worth noting that the treaty provisions condemned in the second part of the Crotty judgment involved effectively legal Terra Nova if you look at the judgments of Mr. Justice Walsh and Mr. Justice Griffin in the Crotty case in particular what they seem to object to was that the Treaty of the Single European Act was effectively a new treaty it wasn't amending the existing treaty provisions it was bringing in if you like measures in a wholly new area and they felt that this if you like brought it outside any protection but there's another point that I want to make in this regard moving on to my fifth out of six points you'll be relieved to know I'll be stopping on point number six but point number five was somehow reviewed as increasing competences even if you went by that and even if I'm wrong in relation to my interpretation of the Crotty case and it goes beyond the existing scope or objectives of the treaties that would merely move the European stability mechanism amendment outside the shield of immunity but that's not enough to require a referendum legally speaking more is required to necessitate a referendum what you need is an actual violation but why would agreeing the European stability mechanism violate the constitution the state appears to be entitled to agree treaties such as the European stability mechanism treaty even without any immunity attaching to it so it doesn't actually need the immunity so again no unconstitutionality involved as far as I can see in relation to that and therefore no immunity needed even if this did raise problems as regards the application of this immunity and the final point I suppose specifically already is that if this amendment increases the competences the competence of the European Union at all it's actually we don't need to worry if you like about a constitutional referendum because it's actually invalid under European Union law itself so that's basically all that I have to say in that regard and that if you like they're the reasons why I would offer as to why a constitutional referendum I think is not legally necessary in relation to this particular treaty that doesn't mean we can't decide should we want to have a referendum in relation to it as a political matter and if you feel that's a desirable way to decide take decisions in relation to a treaty like this I don't quite frankly to be honest about it but that's a political matter and it's not the issue that I'm addressing today what I'm addressing today is the legal necessity for a referendum and on the basis of the arguments that I've put forward to you there today I don't believe that such a referendum is necessary