Will Ireland need to hold a referendum to ratify the fiscal ‘compact’ recently agreed by 26 EU member states? To answer this, I will explain the concept and status of sovereignty in the Constitution. This, in turn, dictates whether, and under what circumstances, Ireland’s participation in supra-national institutional systems requires constitutional amendments specifically permitting such arrangements.
Along with a good deal of rhetoric about sovereignty in the preamble and Article 1, Article 5 of the Constitution says that “Ireland is a sovereign, independent, democratic state”. This sovereignty principle has legal effect, enforceable by courts; it is not simply a high-minded national mission statement. The description of Ireland as “sovereign” binds all the organs of the State, and has formed the basis of important Supreme Court decisions. Of course, the term “sovereignty” is so vague and open-textured as to accord the judiciary a great deal of interpretive power, straying beyond the domain of law as such, mandating the courts to consider, essentially, the broader nature and ethos of the State, first, in order to determine, second, what specific constitutional strictures flow from this. Reflecting the nature of the concept of sovereignty itself, the Constitution aims, broadly speaking, to protect the sovereign powers of its institutions by fettering the ways these institutions exercise such powers. Sovereign power cannot be exercised against itself.
But there are clear limits to this sort of constitutional oversight. The state’s freedom of action is often voluntarily fettered without obvious constitutional consequences. For courts, at least, the concept of sovereignty our Constitution imposes is a relatively formal and technical one. It certainly does not empower the courts to ensure the Irish nation retains a bracing and virile control over its own destiny, as the aesthetic and rhetoric of the document might ostensibly suggest.
To illustrate this, one of the question I am most frequently asked by constitutional law students is roughly the following: “if the Constitution protects sovereignty, and everyone says the IMF/ECB bailout gives away economic sovereignty, then how can the bailout be constitutional?”
The answer is roughly as follows: while the Constitution prevents the powers of our Legislature, Executive and Judiciary from being formally devolved or alienated to other bodies, domestic or foreign, it cannot prevent these institutions from exercising these very powers in such a way as substantively fetters their freedom of action in real terms. Thus, while the Constitution prevents legislative powers being devolved or alienated without an appropriate amendment specifically mandating this, it cannot prevent, for example, that loans the State receives are conditioned on the legislative power being exercised in a manner dictated by other authorities.
Unsurprisingly, the students find this answer somewhat baffling and unsatisfactory.
In any case, the real constitutional barrier to participation in supranational institutions is not the broad, sweeping assertion of “sovereignty” in Article 5, but rather, the vesting of legislative, executive and judicial powers, by the Constitution, in the domestic organs of State, the Oireachtas, Government and judiciary, in Articles 15.2.1, 28.2 and 34.1 respectively. The vesting of powers in organs prevents these organs from alienating or abdicating their powers to external bodies. This is clarified in Article 6 which sets out that the “powers of government are exercisable only by or on the authority of the organs of State established by this Constitution.” Thus, the Oireachtas cannot pass a statute devolving legislative power (except on matters of “detail”) to a Minister or any other body. In this way, “sovereignty” is self-limiting; sovereign powers cannot be exercised so as to alienate these very powers. These powers are exclusive, and cannot ordinarily be fettered by being pooled or shared with other bodies, even when shared at the initiative of the body in which the power in question is constitutionally vested.
This is essentially the reason why adhesion to the EEC in 1972 required an amendment to the Constitution. While the conduct of foreign relations comes under the Executive power in the Constitution, and so international treaties can normally be signed by the Government without specific constitutional provision for these, the Government’s exercise of this foreign affairs power cannot be used in such a way as alienates or devolves, to foreign or supranational bodies, powers which, by the Constitution, are vested in the domestic organs. This includes alienation of the executive power itself. It was mainly the extensive and novel nature of community law, its supremacy over national law, for example, the effect of regulations and ECJ decisions, which required a referendum to ratify the initial Treaty in the first place. The signing of this treaty was effectively to alienate to supranational bodies powers which the Constitution vested exclusively in the domestic organs of State; therefore, it would have been unconstitutional had the Constitution not been amended so as to make specific provision for it.
So while Article 29 now specifically allows for membership of the EEC and EU, Article 29.4.10 also sets out:
“No provision of this Constitution invalidates laws enacted, acts done or measures adopted by the State which are necessitated by the obligations of membership of the European Union or of the Communities, or prevents laws enacted, acts done or measures adopted by the European Union or by the Communities or by institutions thereof, or by bodies competent under the Treaties establishing the Communities, from having the force of law in the State.”
This essentially means that the other provisions in the Constitution vesting exclusive sovereign powers in domestic institutions cannot now be read as invalidating laws, acts or measures “necessitated by the obligations of membership of the European Union or the Communities”. Therefore, constitutional provisions on national sovereignty are qualified with reference to the requirements of EU membership. However, this did not mean that the deepening obligations of EU membership were Constitution-proofed for all time, as opposed to these obligations as they stood at the time Article 29.4.10 was inserted in the Constitution by amendment. In the landmark Crotty case (1987), in the context of a challenge to the ratification of the Single European Act, the Supreme Court held that the initial “consent” to in Article 29.4 did not cover all future changes in the constitution and powers of the EEC/EU. Treaties devolving significant new powers could not be constitutionally allowed unless an amendment made specific provision for these. This decision essentially underlay the necessity of holding referendums to allow for the ratification of the treaties of Maastricht, Amsterdam, Nice and Lisbon.
Let me now turn to the prospective fiscal compact treaty, which can only be approached at a very general level, given that its precise terms are not yet known. What is known is that this will constitute a multilateral international treaty outside the existing structure and treaties of the EU, and that it will contain some form of supranational sanction upon national budgetary policy. Therefore, this constitutional debate is not at all akin to that which took place on the necessity of the Lisbon amendment. Clearly, the fiscal compact treaty is not “necessitated by the obligations of EU membership” – as Britain has demonstrated – therefore, it is not covered by the existing provisions of article 29.4.10. If a member state can legally remain outside the agreement while still remaining a member state of the EU, participation in this agreement is clearly not “necessitated” by membership. This raises the prospect of fresh constitutional consent being needed, but this would only apply if the agreement formally fetters, afresh, the powers of the national organs.
Then, the question can be phrased as follows: since the fiscal compact treaty is outside the scope of the existing constitutional provisions allowing for EU membership, does it formally fetter or alienate the governmental powers vested by the Constitution exclusively in the domestic organs of State?
Since we do know that the fiscal compact treaty will entail submitting national budgetary powers not only to scrutiny and informal supervision– but to specific, formal supranational sanction – it is almost certain to require an amendment.
Darren O’Donovan argues on humanrights.ie that this treaty will require an amendment for the same reason that an amendment was held in 1996 allowing for the ratification of the statute of the International Criminal Court. He rightly says: “this was necessary because the international agreement was formally transferring powers previously vested exclusively in the organs of our national governments to the International Criminal Court.” Because of the British veto, the fiscal compact will entail an “entirely separate and fresh Treaty regime.” From a constitutional point of view, this means that the question of whether amendment is required is the same as in the case of Ireland joining an entirely new supranational governmental entity. Then, the question turns on the degree of formal sanction power granted to the supranational entity, and the extent to which this correspondingly alienates the powers constitutionally accorded to the domestic organs. In Crotty, the Supreme Court held that the foreign policy provisions of the SEA would require a fresh amendment, because they could partly alienate the Executive’s existing constitutional power to formulate and conduct foreign policy. This was not covered by the preexisting provision validating that which was “necessitated” by community membership. Although its precise form is unclear, a fiscal compact would raise similar problems from the point of view of both legislative and executive power. The power to determine taxation and expenditure is held in trust from the people by the Oireachtas and cannot be alienated by the government (formally, at least) to any supraconstitutional authority. Article 28.4.4 sets out that “The Government shall prepare Estimates of the Receipts and Estimates of the Expenditure of the State for each financial year, and shall present them to Dáil Éireann for consideration”, but it is in any case obvious from the overall constitutional scheme that budgetary choice is a core component of national sovereignty and within the institutional competence of the domestic organs.
It should be noted that the Crotty rationale was not applied in two unsuccessful challenges in the foreign affairs arena, in Boland and McGimpsey, which involved challenges to the constitutionality of the Sunningdale and Anglo-Irish agreements respectively. These did not involve any alienation of the State’s sovereign executive power in the foreign affairs arena; in particular, the difference with the SEA lay in the bilateral nature of the agreements, with the consequent maintenance, by the State, of an effective veto in respect of the content of any common policy.
Clearly, this qualification on the rule against alienating sovereign powers does not apply in the case of a prospective supranational budgetary discipline body, equipped with sanctions that would be valid at international law. Whatever the eventual detail of the treaty, the political consensus seems to have crystallized around the need for enforcement powers of some sort – meaning that the powers recognized will almost certainly be of an executive nature, from the constitutional standpoint, therefore represent an incursion on the domestic executive’s constitutional authority in a way that is not currently provided for. By contrast, the IMF memorandum of understanding does not create legal obligations at international law, as such, and so does not formally, as opposed to substantively fetter the executive and legislative powers in a similar way.
The Crotty decision apparently caused consternation in the Government in 1987, as it had previously been assumed that the courts would practically never exercise oversight in the Government’s conduct of international relations. James Casey notes (Constitutional Law in Ireland ,3rd ed, 2000): ‘it was suggested that the line between the executive and the judicial power had been blurred, with the result that no one could be certain about the constitutional limits on the Government’s power to conduct international relations.’ Moreover, the full implications of the Crotty decision, and its conception of the underlying concept of sovereignty in the Constitution, is still quite unclear.
The analysis in this post assumes that it will be actually possible to conclude a separate treaty regime. As Darren O’Donovan pointed out, it has been argued that any effective modification to the provisions on monetary union could only be carried out within the existing legal framework. If true, this would change the constitutional calculus in an unpredictable way.