Tag Archives: fiscal treaty

Seumas Milne writes:

Meanwhile, the Irish are getting similar treatment [to the Greeks], as the country’s elites try to scare voters into backing the EU’s permanent austerity treaty in a referendum later this month.

Crucial to the campaign has been the threat that Ireland will be denied future emergency bailout funds for its own shrinking economy if the treaty is rejected.

…But in both cases, the threats are phoney. The legal basis of the treaty clause the Irish government is claiming would cut off future bailout funds is strongly contested and the prospect unrealistic.

…There is now a strong likelihood that [Greece] will end up leaving the euro, whichever way it turns – and that may well offer Greece the most realistic chance of eventual recovery. But it’s not what parties such as Syriza are demanding. Instead, its leader Alexis Tsipras has been in Paris and Berlin this week calling for a halt to Greece’s debt repayments, and negotiations with Europe’s leaders on a new deal.

The stronger the vote for anti-austerity parties, the better the chance that those negotiations could produce more than cosmetic results. That’s because the threat of a disorderly Greek default – which could still take place inside the euro – has the potential to trigger a cascade of bank runs and knock-on crises across the eurozone whose impact could dwarf the Lehmans crash of 2008.

 

In Or Out Of The Eurozone, We Must Ditch This Failed Model (Seumas Milne, The Guardian)

(Laura Hutton/Photocall Ireland)

Literally groaning under the collective weight of their pensions.

Former Taoiseach John Bruton (left) and ex-Labour minister Barry Desmond with various Labour and Fine Gael TDs past and present in Merrion Square, Dublin, calling for a yes vote in the fiscal treaty.

Lucinda Creighton Says Ireland May Not Be Able To Access international Markets in 2013 (RTE)

(Laura Hutton/Photocall Ireland)

Larry Elliot, The Guardian’s Economics Editor writes:

The survival plan, such as it is, involves countries embarking on a long process of structural reform to make them more competitive, a fiscal pact to ensure that governments live within their means, and perhaps a bit of extra pan-European infrastructure spending to satisfy voter demands to soften the impact of austerity.

There is little prospect of this blueprint working.

Take Ireland, one of the three countries subject to harsh bailout terms. Does it have a competitiveness problem? As Dhaval Joshi of BCA Research notes, Ireland accounts for 0.3% of global GDP yet accounts for 3% of world trade in services and 6% of trade in pharmaceuticals. Ireland ranks third in the world for foreign direct investment, on which the return is 17%, compared with 6% in Germany. “As a trading economy in key sectors, Ireland is punching 10 or 20 times above its weight. This is hardly a sign of an economy that needs to become more competitive,” Joshi says.

Nor would the proposed fiscal pact, on which Ireland votes in a referendum later this month, have prevented the crisis that has reduced GDP by 15% and prompted a fresh exodus of the young and talented. Ireland, like Spain, had healthy public finances in the years before the crisis broke. The problem in both countries was not too much public debt but too much private debt. The reason there was too much private debt was that borrowing was too cheap in economies that were growing fast and at risk of overheating. And the reason borrowing was too cheap was that Ireland and Spain had given up the right to set their own interest rates and were subject to the one-size-fits-all dictates of monetary union.

The Euro Is Ripe For Creative Destruction (Larry Elliot, The Guardian)

By Gavan Titley

Because the young Europeans must now step up to the plate.

Vote yes to supplement Lumumba jokes with feta gags.

To pretend that public expenditure is the root problem. To stop bombs going off in Dublin. To scupper the annoying remnants of democracy on the elastic voodoo of ‘the structural deficit.’

Vote yes if you liked Kenny doing Sarkozy impressions in Athlone. Vote yes for internships.

Vote yes because the treaty is a cushion that will under no circumstances be used to smother you* (*terms and conditions may apply).

Vote yes for that second bailout that we categorically didn’t need.

Vote yes for access to a fund that we can access if we can’t access the bond markets, but for which we will have to borrow billions from the bond markets to pay in our share.

Vote yes to rearrange deckchairs on the iceberg. Vote yes to support Labour’s bid for caviar on the Dail menu.

Yes to a treaty that the Bundestag rejected and the French have declared impossible in its current form.

Vote yes because The Irish Times does fret dreadfully about popular sovereignty. Vote yes because the Shinners will vote no and that 80s vibe still feels nice and comfortable.

Vote yes because Noonan thinks that Ireland being the only country in which this could pass is something to boast about at a business breakfast.

Yes to magical growth plans lashed up on Powerpoint.

Vote yes to pretend the capitalist crisis will go away.

 

Gavan Titley is lecturer in media Studies at NUI Maynooth and vice-chair of the ‘Diaspora, Migration and Media’ section of the European Communication Research Association