We are prisoners of Europe's only superpower

The European Union project has involved a derogation, not just of sovereignty, but of democracy in a way most of us did not anticipate, and far more serious than even Eurosceptics feared, writes Vincent Browne.

It has to do with the European Central Bank.

This has emerged as the most powerful institution on the European Union plateau. It is entirely unaccountable to anybody or any institution.

We, the Irish people, voted for this in the referendum on the Treaty of Maastricht in 1992 without any appreciation of the consequences of what was entailed.

Some of us were concerned about the erosion of democracy generally by our involvement in the European Union, only to be brushed aside by the frenzy of the Eurofans, some of whom, incidentally, have been rewarded for their frenzy.

But we did not see the scale of the contempt for democracy that was embedded in that Maastricht Treaty.

Article 282.3 of the consolidated version of the Treaties (which includes the Maastricht Treaty) states: ''The European Central Bank shall have legal personality. It alone may authorise the issue of the euro. It shall be independent in the exercise of its powers and in the management of its finances.

Union institutions, bodies, offices and agencies and the governments of the Member States shall respect that independence."

The absence of any accountability is quite deliberate.

The Germans were nervous about abandoning the deutschmark, and feared less cautious Europeans would fritter away the stability of the new currency and cause runaway inflation, which Germans have reasons to fear.

So it was agreed that the new institution, the European Central Bank, would have no accountability to the European Parliament or to the European Council (the Council of Ministers) or to the EU Commission.

And as the Treaty itself states, far from any EU government having any say over what the EU does, the governments are required to ''respect'' the ECB's independence.

It was also agreed that the agenda of the ECB would be a German agenda, control of inflation as its prime objective, overriding all other considerations such as job protection and growth.

An essentially neo-liberal programme.

Eamon Gilmore seemed not to have appreciated the status and independence of the ECB during the recent election campaign, when he went on about ''Labour's way or Frankfurt's way''.

Gilmore must now appreciate that it is ''Frankfurt's way'' all the way.

He seemed to think the president of the ECB was a ''civil servant'' who had to do the bidding of his political masters. Not so.

The president of the ECB and the ECB itself has to do no one's bidding. Enda Kenny apparently thought that soft-soaping Angela Merkel might do the trick. Again, not so.

It now seems probable that the ECB unilaterally decided some time in mid-November that Ireland would have to be corralled into a bailout on terms dictated by it.

The reason for this was that money had been draining out of the ECB to fund the liquidity of the Irish banks. It seems the ECB did this without telling even its colleagues on the European Commission - Olli Rehn apparently did not know of the plans for a bailout when he was in Ireland in mid-November, and surely he too was taken by surprise when the ECB insisted on this ''rescue'' package a few days after he was in Dublin and thought things were going okay.

There is some confusion about this. Former finance minister Brian Lenihan said he did not want a rescue package, did not ask for it and tried to resist it. Patrick Honohan, the governor of the Central Bank, and as such a member of the governing council of the ECB (this comprises the governors of the Central Banks of the eurozone), apparently has a different story.

Honohan says that in mid November he, independently, came to the conclusion that Ireland would have to opt for a rescue package because of new information on the state of the economy and of government finances and the seepage of deposits for the banks.

Simultaneously, Kevin Cardiff, the head of the Department of Finance, and John Corrigan, the head of the National Treasury Management Agency, came to the same conclusion.

Together, they informed Lenihan who, it is claimed, agreed with them and it was then that a request was made for a rescue package.

But Lenihan's subsequent conduct suggests strongly that he did not agree to apply for a rescue package and, if Honohan, Cardiff and Corrigan thought otherwise, they had misunderstood his position.

What is also clear is that the ECB was alarmed about the drain of its funds to the Irish banks, and wanted an assurance that it would get the funds back.

But whatever occurred, the ECB primarily inflicted the terms of the bailout on Ireland and, over and above the agreed terms, insisted there would be no burden-sharing with the senior bondholders in the banks and that we would have to pay out even the senior bondholders who were not covered by the state guarantee.

We can fulminate all we like, but we are now in the iron grip of the ECB, and there seems no prospect of any let-up.

[Image top via Cesar Pics on Flickr]