Referendum on Fiscal Stability Treaty

 Posted by on February 28, 2012  Add comments
Feb 282012
 

Game on.

Now we’re in the big time as Ireland is set to vote on accepting  the fiscal stability treaty and the pressure comes on to say Yes.  My online buddy, Prof Brian Lucey sent me a picture earlier today that pretty much sums up what’s going to happen.  He knows all kinds of clever shit that I can’t understand, being a professor and everything, but I take one piece of wisdom from his writings: the European instructions on national deficits and suchlike have nothing whatever to do with science and everything to do with an atavistic German fear of going back to the days of the Weimar Republic.

I was always deeply suspicious of people who proclaimed in percentages.   It’s an indication that they have no idea what they’re talking about but would like to wrap the academic flag around them while bullying you and me into agreeing with them.  What is this magical figure of 3%?  Let me tell you, this was dreamed up over a nice lunch and a congenial bottle of wine on the back of a table napkin.  There is nothing scientific about it, but everything political.

Or to put it another way, it’s bullshit, just as the EU’s obsession with money supply is bullshit.  At a stroke, Ireland could lose a €31 billion burden without anyone at all suffering.  Our central bank could write it off.

Shane Ross was trenchant tonight when he demanded to know if the government had secured a deal in advance of the referendum, and I sincerely hope they have done so.  The Dutch would do it.  The Danes would do it.  The Germans would understand precisely what the logic was, but will our home-grown buffoons grasp the same logic?  I don’t know, but I greatly fear they won’t.

It seems to me that the European core would expect our guys to strike a bargain, just like any logical grown adult, and if that doesn’t happen, it seems to me, we will simply lose respect in the Union.  After all, Greece, with no hand whatever to play, is securing far more wriggle-room than we are.

Is this because of our pathological Irish desire to be liked? I’m afraid it might be.

  34 Responses to “Referendum on Fiscal Stability Treaty”

Comments (34)
  1.  

    This referendum will fail.

    Why?

    It will be because neither the ‘Yes’ side nor the ‘No’ side will debate or focus on the actual terms of the treaty. Even if that were to happen, such a debate will be swamped.

    This referendum will fail because the facts will be lost a wave of emotive rhetoric from the ‘No’ side regarding bondholders, perceived permanent austerity, German jack-booting, French arrogance, corporation tax rates, septic tanks charges, property taxes and God knows what else.

    The ‘Yes‘ side will concentrate on instilling fear as to the consequence of a no vote and will only offer vague positives such a “stability” and “recovery”.

    Additionally, a feeling of revenge will be in the air. Already, people are saying that although balancing the books is a good idea but they will still be voting no on the grounds that by throwing a cat among the pigeons it will strengthen our hand.

    It’s an interesting strategy but highly risky nonetheless.

    The people are angry and fearful, suspicious and looking to point the finger of blame. The Irish don’t do street anarchy like the Greeks, we revolt at the ballot box instead (just ask Fianna Fáil).

    The issues here are relatively simple, do we provide the ‘gentleman’s agreement’ enshrined 20 years ago in the Maastricht Treaty with teeth – no more, no less. Yes, it is that simple.

    Will that message get across? I’d doubt it.

  2.  

    I saw Shane Ross earlier on the Oireachtas Report.
    I’m in agreement with him. I think it’s the most important referendum we’ll ever be faced with. And I’d vote no.

    I think that Germany can dicate our budgets with such stringent terms, equates to nothing but more austerity.

    Niall – RE “The issues here are relatively simple, do we provide the ‘gentleman’s agreement’ enshrined 20 years ago in the Maastricht Treaty with teeth – no more, no less. Yes, it is that simple.”

    Brian Lucey says to that –
    “Some argue that the terms of the compact are essentially those that we agreed to under the Maastricht treaty and its attendant stability pact. The main difference here with the stability pact is the speed of adjustment which would imply that Ireland would face up to 20 years of austerity followed by an indefinite period of being unable to borrow regardless of fire flood or famine , and the threat. Instead of carrot and stick it is stick and stickier…The threat is that countries that do not adhere to the terms of the compact will not be able to access further aid from Europe after 2013. This of course should not be a problem for Ireland, if we believe the statements coming out of Merrion Street, as we plan to be back borrowing from the markets and thus will not need a second bailout. In fact, Minister Noonan has stated that it is ‘ludicrous’ to suggest otherwise….
    Europe as a whole is significantly over the 60%…”

  3.  

    Until we know the wording of the treaty and the phrasing of the question we are in the dark.Like mushrooms.

    However I can see our current administration bringing in all sorts of nasty stuff under the guise of an obligation conferred by a yes vote.They will be able to wash their hands with a clear conscience (or whatever passes for it
    in their twisted psyche).

    Our government is already in the pocket of vested interests – just look at health.

  4.  

    It’s a simple choice really. We vote Yes to a voluntary period of mugging, or we vote No and get subjected to many years of involuntary mugging. You makes yer choice and pays the money.

  5.  

    We seem to be incapable of mature, responsible self governance and wallow in self pity. We got rid of the Brits, tore down their building heritage yet kept their legal system and bureaurocracy (some would say we added to it) we then declared a republic and handed huge powers over our people to yet another foreign state, the Vatican. Ithink we have two choices, settle down with Berlin or court London.

  6.  

    Court London? I think we sailed in that ship before.
    No. No. I just can’t do it. No matter how rational or reasonable a proposal it might be. I just can’t.
    I suppose i might look at it this way: I have spent some time in both Britain and Germany, and if i had to decide where i would prefer to live, it would be Germany without a moments hesitation.
    so if the question has changed from ‘Boston or Berlin’ to ‘London or Berlin’, then the answer is still Berlin.
    As far as the Fiscal stability Treaty is concerned… there’s a deal to be made there lads. At least there might be.
    What are the consequences of saying NO to a treaty that will pass anyway with the consent of 12 member states? that we’ll be cut off from Euro money for a 2nd bailout that we’ve told we’ll never need.
    Somebodies telling porkies. if eEnda and the boys fail to lay it out clear and tell it like it is then there is no way in hell they’ll pass this referendum AND survive politically.

  7.  

    Daddy, I spend a number of years in London but have only ever visited Germany and loved it. But all this talk of uber efficiency in Germany is as stereotyped as the image of Ireland being lazy and drunk. I have no problem per se with fiscal constraints and balancing budgets but when London dictated we rebelled, when Berlin dictate we kow-tow. The € is being run in the image of and to the benefit of the German economy, one size does not fit all. Part of our fiscal problem was caused by the reckless lending by the German banks to Irish banks to satisfy reckless borrowing. Banks are governing Europre, not democracy as seen in Greece and Italy. We cannot survive on our own thanks to craven bankers, gombeen politicans and a lack of any indigenous manufacturing. Its a choice between a rock and a hard place.

  8.  

    I do know that this sounds like a not thought out response to this forthcoming referendum…………BUT!………….Fuck em all!……..its payback time!…………VOTE NO!

  9.  

    Islandbank if we do reject the treaty where do we get money from to enable us to exist? At the moment we can’t raise money from the markets and if we do it is at rates well in excess of the EU funds. This is something that will need careful consideration because it’s impact will be huge.

  10.  

    So, its vote yes so we can borrow money, to pay back the same lenders for money or banks lost.
    the same banks who staff go on strike for their christmas bonus.
    where not one senior bank offical has been charged.
    the government has had a year to show they were serious, so they can fuck off at this stage.

  11.  

    I know where you’re coming from, but in your wish to punish Enda & co don’t end up punishing yourself.

  12.  

    I was thinking about this all day as i lugged boulders around my garden. Europe’s not going to be cutting the Irish government any deals to secure the vote, that’s not how this is going to work. However the Irish electorate are still going to need to be sweet-talked into it alright; Enda and the boys better start kissing the right arses for a change if they want a yes vote. And they better hope that Joe public Irish citizen is in the mood for courting.
    (You’d nearly feel sorry for them, wouldn’t ya? nearly)

  13.  

    What’s the current GDP to debt percentage? 130%?
    If it’s over the deemed target of 60%, there has to be a reduction of 5% of the balance per annum. 130-60 =70. 5% of the 70%? = P.A. ?
    These percentages mean nothing.

    What’s the GDP figure at the moment?
    What are the debt figures?
    How many billions are we talking that’d need to reduced P.A.?

    And we’ve to continue to pump 3.5 billion into Anglo (what are we calling it now the Resolution Institution or something or other) for the next ten years or so.. a completely defunct bank.. so the debt will be increasing as will the accumulating interest.

    Pity we didn’t have this fiscal stability treaty before we were forced to sign up with the promissory notes. There’d be no problems keeping within the debt to GDP ratio then!

    We have to keep ‘our debt’ within 60% of GDP.. but it’s not ‘our debt’ and the only way to pay for it is more austerity, savage cuts etc.

  14.  

    Ok, here’s the debt figure
    http://www.financedublin.com/debtclock.php
    120 billion

    (and that’s 30% over GDP.)

    5% of the balance (over 60%) is 4.2 billion approx (P.A. accumulating)
    Where’s that going to come from?

  15.  

    “5% of the balance (over 60%) is 4.2 billion approx (P.A. accumulating)
    Where’s that going to come from?”

    You, me, our children……………………..
    If the European Central Bank lends money to banks at 1% and the banks
    in turn lend to countries by buying bonds which return 5-6% one might be tempted
    to ask why not just cut out the middle man and lend to countries at 1%?
    It would lessen the burden on the put upon people of Europe surely?
    But the banks like landowners seem to have the god given right to leech of the
    people.Feudal.
    This situation will only be cemented by the treaty.
    A Scots friend once said government only exists to grind money and labour out
    of the people.Governments in Ireland find this far easier than in most other countries because
    Rome and Armagh keep the people docile.
    Maybe Enda has his eye on Charlemagne’s old job as did Tony Blair.

  16.  

    yesterday the ECB gave out billions to about 800 banks all over europe.
    This money will be paid back by the banks,and not the people from country of origin of these banks.
    so why are we paying back the money lost by our banks, is it because cowen and lenihan knew if the ECB had to bail them out all their buddys would have to pay the price with their jobs.
    so fuck them.
    If the banks bluff had been called, the ECB would have had to take over the Irish banks if they did not want any bank to fail. After all if the irish banks failed so would the european banks who lent the money.
    protecting the golden circle was the reason the country was sold out and no other fucking reason.

  17.  

    Great blog. I’ll be looking for you on Twitter. Here’s something to consider-

    http://www.carolinesimons.ie/Blog/Entries/2012/2/28_Ireland_decides_and_Europe_holds_its_breath.html

    I’ll be posting some other thoughts on this on my blog tomorrow.

  18.  

    Thanks. I’m afraid you’ll find that I’m often on the opposite side of an argument, but as long as you’re ok with that, so am I.

  19.  

    Bock,

    I know catholic culture makes this time of year a time of self-denial, but first you gave up being offensive and now you tolerate comment spam from a Libertas failure.

  20.  

    Oh no! Did I stop being offensive?

  21.  

    You did. The old Bock would have stamped on loonies. Are you feeling quite well?

  22.  

    Here’s the problem. As the world became progressively more insane, I had difficulty deciding who’s mad and who’s not. I thought Ganley was nuts when I first encountered him, and to be honest he still reminds me of Max Headroom, but that was before I came across the late Brian Blanket-Guarantee.

    Suddenly, it all changed. Ganley appeared perfectly reasonable, which was quite an achievement for Brian to pull off, but that wasn’t because because I thought increased European integration was a bad thing. I just realised that we can’t trust any Irish politician to behave in a mature, rational, adult manner. Therefore, since our electoral system is deliberately skewed towards putting cynical under-educated ward-heelers in the national parliament, it seemed obvious that they needed some sort of grown-up oversight.

    My opinion on this is not ideological. Just pragmatic. Or to put it another way, making the best of a very bad situation.

    Now, however, Caroline Simons and others are arguing quite rationally for a contrary position and I can see precisely why they might hold that view. At least for once in Ireland, we’re discussing a decision purely on considerations of self-interest as opposed to the insane religious interventions of years gone by.

  23.  

    My enemy’s enemy is my friend?

  24.  

    Certainly not. I’ll be approaching this discussion on its merits, as you know. That’s the tradition here. However, anyone with an opposing point of view will get a hearing as long as they show respect to the other commenters, and also, to a slightly lesser extent, to me.

  25.  

    Fair enough.

    I always thought there was something of the darkness about Libertas (I have a fear of populist politicians – I grew up on stories of my grandfather being pursued through London streets by Mosleyite Blackshirts)

  26.  

    There’s no doubt that whoever dreamed up the name Libertas did the movement no favours.

    I’d suspect a certain proportion of the population who studied Latin in school were asking themselves, Why are these people calling themselves Libertas instead of Freedom – do they think they live in ancient Rome? Or maybe they’re just being pretentious.

  27.  

    ‘Freedom’ would have presumably led them to being referred to as the Freedom Party – with its resulting associations.

  28.  

    Imagine it !! The major nations in Europe have signed up to austerity budgets…whoever would have forecast that ?

  29.  

    The referendum will fail for one simple reason it won’t be the voice of the people. If we get a majority no vote; like the lisbon treaty the government will keep grilling us until we give them the vote they want. When you think about it we are no better than pre-Arab spring Libya

  30.  

    Vote yes to copper-fasten austerity.

  31.  

    Can someone with a better grasp of macro economics please explain to me how we as a nation will finance the running of the country if we vote no. We cannot raise money on the open market because of our credit rating. if we don’t have access to the EU funds where do we go? Will we have to leave the € if we say no, if so can you imagine the mass appeal of the punt?

  32.  

    The issues are complex and the future either way is unsure. One thing is for sure though. The fact that all of our cheating lying main political parties want me to vote ‘Yes’, is the best reason I will definitely vote ‘No’.

  33.  

    John, you’re entitled to vote how you choose, but choose for informed logical reasons, not because you want to punish or get back at the politicians. My inclination is to vote yes, because I cannot see a sustainable future for us if we vote no. Can anyone intending on voting no convince me to join them?

  34.  

    No. 8
    I take your point. But, I remember when we were sent back to vote again the last time, that Michael Martin was the one making dark threats on the one hand about a no vote, and on the other hand, painting a picture of security & prosperity if we voted yes. Like Bock, I view Fine Gael simply as Fianna Fail-Lite, with the same sleight of hand, dishonesty and blatant lies when it suits them. As I am not sure that the Euro will survive anyway, I think we will have a better chance with a Punt of our own, At least that way, we can de-value as we need to. And with our own control over our futures, we at least will have the option of telling bondholders to fuck off, and we can also dictate to our own banks. That is my rationale. It will mean hard times ahead either way, whether we stay in the Euro or not.

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