Thursday, November 12, 2009

But is it legal?

Never mind, said Lord Willoughby de Broke, whether the Commission is doing the right thing or the wrong in meddling with the control of our banks (the wrong, as it happens), concentrate on whether the action is legal. On Tuesday he asked Her Majesty's Government
what assessment they have made of the legality of the European Commission’s decisions on the future of banks in the United Kingdom owned or partly owned by the Government, in the context of the expiry of the present Commission’s term of office on 31 October.
Speaking on behalf of said Government, Lord Davies of Oldham explained in a kindly fashion:
My Lords, the Commission may act in a caretaker capacity after the expiry of its mandate on 31 October to protect the interests of the EU, to fulfill its obligations under the treaty and to ensure the continuity of public service. The Government have agreed packages of measures in principle with Commissioner Kroes in respect of the restructuring of Lloyds Banking Group and the Royal Bank of Scotland. These are now subject to state aid approval by the college of Commissioners.
In parenthesis let me note that there was very little mention of Commissioner Nellie Kroes in all the announcements about the restructuring of those state-owned banks. Could it be that the aforementioned Government does not like people to know that its decisions are taken at the behest and direct instruction from some Commissar or other in Brussels, who no longer has the right to give those instructions?

Lord Willoughby de Broke chose to disagree with the Noble Minister:
My Lords, while I am grateful to the Minister for that reply, I am afraid that I am not satisfied by it. Nowhere does the treaty, under any article for the reappointment of the Commission, allow for reappointment in a caretaker capacity; there is simply no legal basis in the treaty for that. It therefore follows that, in all its actions since 31 October, the Commission has been acting beyond its powers. That includes the restrictions that have been put on the Royal Bank of Scotland in relation to the payment of dividends, for example, which disadvantages shareholders and pension funds. Can the noble Lord confirm that the Commission has not been legally reappointed according to the procedures laid down in the treaties and that, therefore, its actions are ultra vires?
The Noble Minister then informed the House that the Commission need not be legally reappointed and could just carry on in a caretaking capacity, presumably indefinitely. Lord Kinnock agreed with him, citing Article 216 though Lord Willoughby de Broke suggested that the Welsh Windbag (referred to somewhat more politely in Hansard) was not entirely accurate.

Well, let us see. Actually, I think the Noble Lord Kinnock meant Article 215 of the Consolidated Treaties (as the Constitutional Lisbon Treaty is not yet in force).

Apart from normal replacement, or death, the duties of a Member of the Commission shall end when he resigns or is compulsorily retired.

A vacancy caused by resignation, compulsory retirement or death shall be filled for the remainder of the Member's term of office by a new Member appointed by the Council, acting by a qualified majority. The Council may, acting unanimously, decide that such a vacancy need not be filled.

In the event of resignation, compulsory retirement or death, the President shall be replaced for the remainder of his term of office. The procedure laid down in Article 214(2) shall be applicable for the replacement of the President.

Save in the case of compulsory retirement under Article 216, Members of the Commission shall remain in office until they have been replaced or until the Council has decided that the vacancy need not be filled, as provided for in the second paragraph of this Article.
According to Lord Kinnock this implies that the whole Commission "stays in office unless and until a replacement is appointed through due process, and that consequently the decisions taken by the Commission since 31 October are completely within the law".

I don't think that is what this Article says but the fact that it can be interpreted that way by ex-Commissioners who do not have to declare their pecuniary interests, tells one a great deal about the EU's contempt for its own legal structure.

As of October 31 there is no Commission as a new one has not been appointed. That needs to be remembered.