Referendum on Fiscal Treaty confirmed

Kinski

New Red C poll projecting a 60% Yes vote (excluding Don't Knows). Not surprised.

later12

Gloomtastic! wrote: »

This referendum is not about the Euro or Europe, it's about access to debt.

No it's not.

It's about Euro Area Governance. In light of an amendment to arrangements surrounding access to the ESM, it also calls that matter into question.

But I think we should recall some important points

• If Ireland requires a second bailout, it will probably be arranged around this time next year. If we arrange it before March 1st 2013, we will not be required to have ratified the Fiscal Compact in order to access an ESM programme.
• it is likely that in the event of a significant exchequer deficit leading to an effective loss of market access to the state, the Irish state would gain access to a muddled together bailout from bilateral loans or loans extended by some sort of EU SPV, as well as the IMF in some arrangement similar to the first Greek bailout in June 2010.
  It is not written in stone that all future sovereign aid will only ever arise via the ESM. Given the fact that Ireland is likely to remain in the Euro, it is unlikely that the EU/ EA states would rather see it undertake such a drastic, damaging economic strategy than simply extend credit out of some petty sense of revenge (especially since we are told the EU has nothing to lose by our rejecting this treaty).
• EA states will need to have ratified the Fiscal Compact after March 1st 2013 in order to access ESM funding. However, there is nothing to stop Ireland from ratifying the treaty next year, or some years down the line. Ideally, when a real fiscal union is ready to be put in place and the Treaty is a more refined piece of our European economic furniture.

Permabear

This post has been deleted.

later12

Permabear wrote: »

This post had been deleted.

That is not at all established. Taking into account the deficit convergence provisions of the treaty alone, there is no mention anywhere of revenues that are transitory in nature. In the years from 1999 - 2007, not only was the average Irish fiscal deficit within the terms of the upcoming treaty, but we actually ran a fiscal surplus (indeed, to the criticism of Richard Bruton, I recall).

Whilst Article IX of the Treaty vaguely calls on signatories to co-operate on a common economic policy which fosters economic growth, and Article XI asks signatories to discuss their economic policies with the European Commission, by no means does it offer any systematic solution on how failure to do so may be penalised nor offer any detailed answer to what needs to be discussed and at what depth.

I appreciate that you have qualified the above statement as an arguable one, but frankly I don't really see the argument in its favour.

At very least, if state revenues do nosedive as they did in 2008-09, the government will not be able to take the politically soft choice of borrowing until the fiscal deficit reaches double digits as a share of GDP rather than making necessary cuts and tax increases.

That remains to be seen. If the Treaty is ratified, and the government request a second crisis programme after March 2013, then they certainly can continue to borrow heavily, this time from the ESM instead of doing so directly from the sovereign market. And so it would be, in theory, for many years to come.

If anything, this Treaty would arguably only extend the state's access to a 'Lender of Last Resort'.

Permabear

This post has been deleted.

SuperMacs

Waiting for No camp to pull out the standard arguments/scare tactics...

• Will lead to abortion here
• Will force us into a European army

As we all know, all their arguments were so true the last time round.

SuperMacs

If this fiscal compact forces the government to their books in order.
I'm all for it, because I do not trust that shower in Dublin to get any books right.

later12

SuperMacs wrote: »

Waiting for No camp to pull out the standard arguments/scare tactics...

• Will lead to abortion here
• Will force us into a European army

As we all know, all their arguments were so true the last time round.

Both arguments get let down by such baseless claims.

dublinman1990

I suppose we Irish people have heard the name of Nigel Farage of UKIP before.

http://www.irishtimes.com/newspaper/ireland/2012/0305/1224312795767.html

Why oh Why is he doing this to us again; IMO he should personally leave our own affairs alone and stay within his own country. That first image I've have seen; after we lost the first vote on Lisbon, of he and his colleagues wearing green jumpers saying 'Respect the Irish Vote' still embarrasses me to this day.

He should not get involved in this after his country bowed of this treaty some months ago by a Man he knows called Cameron.

Dare I say more!

Ken bryan

we Vote yes . We a fools .
The Greeks Play a had Ball . With The German and get a right down .
As the Greeks the Euro Low . Which is Good For Germany .
The Both Greeks and Germans Know This .
I think we should demand A right down of 50 % for our support of this treaty .
If our banks Were allowed to Failed . The German would be luckly get back half of the Money that recklesly lent to our banks .
We need to tell the Germans . This That They are the luckly ones Not us .
We saved their Banks and put our people in slavery as a result.
If We stop paying that money . The German Banks are Fecked .
Yet they wont . Rite down some of these loans
A no vote . Will convey to the Germans our anger .
It a discrase how we can alow ouselves .
To be treated as Pigs by the Germans .
Enda Kenny Is Just A debt collector For the German Banks .

FreudianSlippers

Ken bryan wrote: »

we Vote yes . We a fools .
The Greeks Play a had Ball . With The German and get a right down .
As the Greeks the Euro Low . Which is Good For Germany .
The Both Greeks and Germans Know This .
I think we should demand A right down of 50 % for our support of this treaty .
If our banks Were allowed to Failed . The German would be luckly get back half of the Money that recklesly lent to our banks .
We need to tell the Germans . This That They are the luckly ones Not us .
We saved their Banks and put our people in slavery as a result.
If We stop paying that money . The German Banks are Fecked .
Yet they wont . Rite down some of these loans
A no vote . Will convey to the Germans our anger .
It a discrase how we can alow ouselves .
To be treated as Pigs by the Germans .
Enda Kenny Is Just A debt collector For the German Banks .

Is that beat poetry or is there some hidden meaning I'm missing at this hour?

meglome

SuperMacs wrote: »

Waiting for No camp to pull out the standard arguments/scare tactics...

• Will lead to abortion here
• Will force us into a European army

As we all know, all their arguments were so true the last time round.

Was walking down Dame Street yesterday and the lying has started, not at this level yet though. Interestingly there were socialist themed posters all along Dame Street, I wonder has that got anything to do with the ODS guys?

One poster type is... "Say No to EU Austerity treaty" by socialist something or other. Didn't have time to get a picture.

And just to point out the obvious... this isn't an EU treaty, it's intergovernmental and it won't effect the need to have austerity either way. So the poster is complete bull.

FreudianSlippers

In all seriousness though, do we have any proof that German banks did lend recklessly to Irish banks? (clearing up the misnomer that Germany itself was lending money)

http://www.dbresearch.de/PROD/DBR_INTERNET_DE-PROD/PROD0000000000266643.pdf

Isn't there more anecdotal proof that UK banks were more heavily involved in bank-to-bank lending and predatory lending on a personal banking level than the German banks.
With many of those banks now belonging to the British taxpayer... how does that play in now?

IIRC German banks are fairly well exposed in the US markets?

later12

meglome wrote: »

there's nothing in it about austerity

NOTING that sufficient progress towards the medium-term objectives should be evaluated on the basis of an overall assessment with the structural balance as a reference, including an analysis of expenditure net of discretionary revenue measures, in line with the provisions specified under European Union law

the rule under point (a) [the budgetary position of the general government of a Contracting Party shall be balanced or in surplus] shall be deemed to be respected if the annual structural balance of the general government is at its country-specific medium-term objective, as defined in the revised Stability and Growth Pact, with a lower limit of a structural deficit of 0,5 % of the gross domestic product at market prices. The Contracting Parties shall ensure rapid convergence towards their respective medium-term objective.

?

I'm in favour of Irish fiscal austerity, by the way. Very strongly so. But it is completely misleading to suggest that the Treaty has nothing to do with such austerity.

meglome

FreudianSlippers wrote: »

In all seriousness though, do we have any proof that German banks did lend recklessly to Irish banks? (clearing up the misnomer that Germany itself was lending money)

I've been asking people online for months, on a number of sites, to show that was true. No one has given me anything, not even a whiff of evidence for it.

Scofflaw posted this link to the German ambassador on Today Fm. http://audioserver.todayfm.com/audio/mediamanager/todayfm/audio/german_panel_210212.mp3
At 5:28 roughly. He says… “It would be a lot cheaper for us actually… if bailing out German banks were really what we were after, it would be a lot cheaper for Germany to do that directly rather that via Dublin and bailing out the Irish economy…”.

Very difficult to argue against the logic.

meglome

later12 wrote: »

?

I'm in favour of Irish fiscal austerity, by the way. Very strongly so. But it is completely misleading to suggest that the Treaty has nothing to do with such austerity.

Apologies I should have said it won't effect the need for austerity either way. I'll change my post to reflect.

FreudianSlippers

meglome wrote: »

I've been asking people online for months, on a number of sites, to show that was true. No one has given me anything, not even a whiff of evidence for it.

Scofflaw posted this link to the German ambassador on Today Fm. http://audioserver.todayfm.com/audio/mediamanager/todayfm/audio/german_panel_210212.mp3
At 5:28 roughly. He says… “It would be a lot cheaper for us actually… if bailing out German banks were really what we were after, it would be a lot cheaper for Germany to do that directly rather that via Dublin and bailing out the Irish economy…”.

Very difficult to argue against the logic.

Yeah... why give money to a bank to give it back to another bank in your own country; cut out the middle man and give it directly to your banks.
But then that has a further-reaching impact on the state of the EZ as a whole.

Kinski

FreudianSlippers wrote: »

Yeah... why give money to a bank to give it back to another bank in your own country; cut out the middle man and give it directly to your banks.

And then ask your banks to pay it back to you?

FreudianSlippers

Kinski wrote: »

And then ask your banks to pay it back to you?

IMO these banks should not be getting money for nothing. The interest they will be paying back to the government is sufficient.

meglome

Kinski wrote: »

And then ask your banks to pay it back to you?

The German government didn't just give free money to their banks there was a quid pro quo. So I can't see any argument against what the German ambassador says. Am I missing something? (genuine question btw)

Scofflaw

meglome wrote: »

I've been asking people online for months, on a number of sites, to show that was true. No one has given me anything, not even a whiff of evidence for it.

Scofflaw posted this link to the German ambassador on Today Fm. http://audioserver.todayfm.com/audio/mediamanager/todayfm/audio/german_panel_210212.mp3
At 5:28 roughly. He says… “It would be a lot cheaper for us actually… if bailing out German banks were really what we were after, it would be a lot cheaper for Germany to do that directly rather that via Dublin and bailing out the Irish economy…”.

Very difficult to argue against the logic.

It's sort of sadly entertaining. People are constantly outraged about the fact that "Europe" doesn't seem to be giving us proper credit for "bailing out their banks" and "saving the eurozone"...without any evidence for either of those things being true.

The "explanation" that's offered for Germany supposedly choosing to bail out their banks via Ireland is that it allows them to profit by charging us interest. Not sure what the explanation for the fact that they're basically passing on loans to us at the rate the EFSF/EFSM are able to borrow (which is lower than our rates have ever been, even pre-crisis) is supposed to be - probably that bit relies on people not remembering or not knowing that the initial rates were reduced very quickly.

cordially,
Scofflaw

Kinski

FreudianSlippers wrote: »

IMO these banks should not be getting money for nothing.

I'd agree with you about that.

meglome wrote: »

The German government didn't just give free money to their banks there was a quid pro quo. So I can't see any argument against what the German ambassador says. Am I missing something? (genuine question btw)

Tbh, I really don't know. It just occurs to me that one reason you might not want to bailout your own banks is that you might not actually be solving the problem by doing that, but just changing it from one where the banks have bad creditors to one in which they owe you a lot of money. Not saying this is what is happening btw; it's just one response I can think of to those comments from the ambassador.

Scofflaw

Kinski wrote: »

I'd agree with you about that.

Tbh, I really don't know. It just occurs to me that one reason you might not want to bailout your own banks is that you might not actually be solving the problem by doing that, but just changing it from one where the banks have bad creditors to one in which they owe you a lot of money. Not saying this is what is happening btw; it's just one response I can think of to those comments from the ambassador.

That seems superficially plausible, until one stops to think about it. If you give the money directly to your banks, they owe you, and you own them. Whatever form of holding them upside down and shaking your money out of them is necessary is within your power.

If, on the other hand, you give it to the Irish government to give it to their banks to give to your banks, you're still spending at least the same amount of money, have no control over even your own banks as a result, never mind the hazard of passing the money to another sovereign government and their banks (which they then own, courtesy of your money), and only part of your money will be spent on paying back your banks.

It's daft, actually. And that's without the fact that there's no evidence of any large German or eurozone involvement in our banks in the first place!

cordially,
Scofflaw

later12

meglome wrote: »

Apologies I should have said it won't effect the need for austerity either way. I'll change my post to reflect.

The Irish crisis programme requires the state to lower its deficit to below 3% of GDP, not the 0.5% structural deficit ceiling set out in the TSCG.

Ireland could well regain satisfactory access to rolling over its debt and growing its economy at 2-3% of a deficit. I'm not saying that we ought necessarily do so. But that the fiscal treaty does indeed expand upon the magnitude of sovereign austerity which one might ordinarily expect in order to regain market access, and does expand upon the Irish crisis programme requirements.

Therefore I would suggest those posters you mention are not putting forward a false depiction of what the Treaty, in part, pertains to.

Again, I'm very enthusiastic about Irish austerity. I think the Irish socialist movement is generally absurd. But I think the above deserves to be countered.

Kinski

Scofflaw wrote: »

That seems superficially plausible, until one stops to think about it. If you give the money directly to your banks, they owe you, and you own them. Whatever form of holding them upside down and shaking your money out of them is necessary is within your power.

But how does that get around the problem of the massive financial hole those banks would be in? I assume you don't really want to be turning your banks upside down and shaking money out of them.

meglome

later12 wrote: »

The Irish crisis programme requires the state to lower its deficit to below 3% of GDP, not the 0.5% structural deficit ceiling set out in the TSCG.

Ireland could well regain satisfactory access to rolling over its debt and growing its economy at 2-3% of a deficit. I'm not saying that we ought necessarily do so. But that the fiscal treaty does indeed expand upon the magnitude of sovereign austerity which one might ordinarily expect in order to regain market access, and does expand upon the Irish crisis programme requirements.

Therefore I would suggest those posters you mention are not putting forward a false depiction of what the Treaty, in part, pertains to.

Again, I'm very enthusiastic about Irish austerity. I think the Irish socialist movement is generally absurd. But I think the above deserves to be countered.

Well I agree with your point generally. But... The posters, it seems to me, are designed to connect a yes vote to the treaty with whether we have austerity or not. We will be having austerity no matter which way we vote. So at best it's disingenuous.

later12

meglome wrote: »

The posters, it seems to me, are designed to connect a yes vote to the treaty with whether we have austerity or not.

That's speculation. It wasn't the reading I took from the poster when I saw it. I don't imagine any serious proportion of the Irish electorate (nor the socialist party) believe that rejection of the treaty implies an end to austerity, quite honestly.

Vadakin

It would help if the "Yes" side (by which I mean politicians, not the ordinary citizen in favour) weren't resorting to fear-mongering, AGAIN! Talking about the referendum essentially being about whether we want to be in the Eurozone or not, that we won't have access to funds if we vote no etc...it's not helping.

I think both sides need to be honest with the electorate. When the Lisbon treaty came around, it was "Yes to Europe, Yes to Jobs" on the "Yes" side and "Europe will eat your children and give you chlamydia" (an exaggeration on my part) on the "No" side. I actually voted No on Lisbon 2, not because of anything that was in the treaty, but because I was angered that they would put the same exact treaty to us again, essentially disregarding the decision of the people because apparently it was the wrong one. Enda Kenny has said that won't happen this time if we vote No but he's amping up the rhetoric, trying to scare us into voting Yes and I don't like that.

There is a disease in Europe, in the world. Our democracy is being eroded by people who don't trust European citizens. Look at Greece. When the Greek PM had the audacity to suggest letting the people exercise their democratic rights, Europe had a field day, moving quickly to make sure the "right" man was in charge. You had Leo Varadkar insulting the intelligence of the Irish people, suggesting a referendum would be a bad thing.

Whatever side of the debate a person is on, they need to be honest and open about their position and above all, they need to trust in the democracy they claim to be a part of.

Stop the rhetoric. Stop trying to scare people into voting the way you want. If you're on the No side, don't just say that the treaty will ruin the country, back up your words with facts. Same for the Yes side.

As far as German banks go, I do believe there was reckless lending to Irish banks. The Irish banks in turn were guilty of reckless lending. Nobody's hands are clean in this. At this stage, it doesn't matter. What matters is getting Ireland and Europe back on its feet and on that front we can absolutely point the finger at the Germans and to a lesser extent the French. Things like debt write downs, extending repayment periods, reducing interest rates...these are viable options yet time after time, the Germans in particular will have none of it.

This treaty, whether good or bad, was drafted in Berlin. They want Europe to do things their way and maybe we should but it's not for them to dictate terms. The European Union is supposed to be a partnership. Sarkozy and Merkel aren't the King and Queen of Europe, no matter how much they'd like to be.

Eliot Rosewater

Vadakin wrote: »

Whatever side of the debate a person is on, they need to be honest and open about their position and above all, they need to trust in the democracy they claim to be a part of.

There are number of compelling reasons why one should not trust Irish democracy. The principal one is that the Irish people, through the ballot box, were instrumental in the creation of the current crisis here. They consistently voted for high-spend low-tax policies that have now resulted in a disastrous governmental fiscal position. And many are in denial that they are to blame: Enda Kenny himself played up to this when he said people were not at fault in his state of the nation address.

Hotblack Desiato

later12 wrote: »

The Irish crisis programme requires the state to lower its deficit to below 3% of GDP, not the 0.5% structural deficit ceiling set out in the TSCG.

You're not comparing like with like. The 3% deficit target is a yearly target disregarding the economic cycle. The 0.5% target (if I understand correctly) is what's left over after cyclical deficits/surpluses are taken into account, i.e. the average deficit over an entire economic cycle.

It's very difficult to argue IMHO that a country in the position we are in should not be aiming to at least balance the books in future over the economic cycle, in other words zero structural deficit.

It's convenient for some commentators on the No side to ignore that the 3% target and the 0.5% target are not measuring the same thing.