Fiscal Treaty Referendum.....How will you vote?

carveone

beeftotheheels wrote: »

If we vote no we have no obvious source of funds for that €8+ billion (in 2014, more if we look to 2015).

Including the 10 billion Scofflaw mentions, along with the possibility in a downgrade of reaching the July '11 highs of 14%, that's 18 billion at 14%? That's appalling even if those are 10 year bonds not the more likely 3 year. And then doing that again in 2015. Sounds super. Where do I sign up...

Scofflaw

carveone wrote: »

Always wondered what it was like for Irish people outside the country. I was in college and wanted to crawl into a hole.

I was working in Norway, and a deputation of Norwegians came in to me when the business first broke, saying "this is barbaric, how can your country allow this?", to which I said "it won't actually happen like that - I know that's what our law says, but some way round it will be found". Which of course it was - and they were, if anything, even more appalled.

cordially,
Scofflaw

Scofflaw

carveone wrote: »

Including the 10 billion Scofflaw mentions, along with the possibility in a downgrade of reaching the July '11 highs of 14%, that's 18 billion at 14%? That's appalling even if those are 10 year bonds not the more likely 3 year. And then doing that again in 2015. Sounds super. Where do I sign up...

May 31st - just tick the right box...

apologies,
Scofflaw

carveone

Which of course it was - and they were, if anything, even more appalled.

I feel rather bad for finding that statement funny...

Scofflaw wrote: »

It's extraordinary the extent to which the public/media debate is being conducted in an almost total fog of ignorance.

I didn't realise that the structural deficit rule had been in place since June 2005. So the compact is actually less stringent not more. So... along with the other incorrect points in the Irish Times article should I be concerned at the state of economics at NUI Galway? I mean even I got the wrongness of his second point on my own (2. Debt should be 60 per cent of GDP, €5 billion a year, 20 years etc) I'm an engineer not an economist.

May 31st - just tick the right box...

Lol!

beeftotheheels

carveone wrote: »

I didn't realise that the structural deficit rule had been in place since June 2005. So the compact is actually less stringent not more. So... along with the other incorrect points in the Irish Times article should I be concerned at the state of economics at NUI Galway? I mean even I got the wrongness of his second point on my own (2. Debt should be 60 per cent of GDP, €5 billion a year, 20 years etc) I'm an engineer not an economist.

This is a huge part of the issue and the intellectual dishonesty around the debate.

In order to actually understand what we're voting on you need to understand what the treaty is changing, the answer to which is actually not a whole lot.

So while I personally would back the Commission's view that everything that needs to be done can be done within the current rules, the treaty has been signed and I see little point in refusing our Government the ability to ratify it.

p.s. John McHale is also at NUIG and he's one of the cheerleaders for understanding the treaty so I wouldn't write off their economics faculty just yet.

recedite

carveone wrote: »

I didn't realise that the structural deficit rule had been in place since June 2005. So the compact is actually less stringent not more

The Germans want a debt brake inserted inserted into the laws and constitutions of other member states, as they have themselves done. Previous "rules" weren't kept.

K-9 wrote: »

That was when an Irish Yes vote was essential for Europe as a whole, this time it isn't, an important difference.
This is more like the Danes voting No to the Euro.

I don't like this implication that the people of a country are only sovereign when they agree with the Brussels plan. Its a bit fascist.

Bullseye1

Has it ever been explained why we have to borrow from the markets regardless? It makes absolutely no sense to borrow money to pay wages, SW, pensions etc. I can understand borrowing for infrastructural projects as it helps the economy and is is like a mortgage. But borrowing to make up a deficit even a 3% one is madness. Surely you cut your cloth to the money you bring in in taxes and reduce payments out.

beeftotheheels

Bullseye1 wrote: »

Has it ever been explained why we have to borrow from the markets regardless? It makes absolutely no sense to borrow money to pay wages, SW, pensions etc. I can understand borrowing for infrastructural projects as it helps the economy and is is like a mortgage. But borrowing to make up a deficit even a 3% one is madness. Surely you cut your cloth to the money you bring in in taxes and reduce payments out.

Not quite that simple I'm afraid.

Let's look at the case of Mr X, a higher paid public servant who earns €200k.

We cut his salary by €100k so we save €100k, right?

Wrong.

Of the €100k we cut 50% odd had come back to us already through income taxes. So after income taxes cutting €100k saves us €50k. But then Mr X cuts back on spending. Which reduces the amount of VAT we get out of him. It also puts pressure on the businesses Mr X used to spend his salary in.

This is why smaller cuts over a longer period are generally preferred to huge cuts now. The huge cuts don't actually save the amount they would appear to save, and have hugely negative knock on consequences for the rest of the economy.

That's not to say I approve of public sector employees earning €200k in Ireland - I don't. I just chose this as an example.

kearn83

I will be voting "yes" not for the government sake but for the Irish people sake. I have no love for this government and especially last government, the fact of the matter is the Irish government has put this country into turmoil not the EU.

The only way this country can help getting out of recession is by sticking with the EU we need to borrow money we need to create jobs without EU help we are screwed. Let the big boys of Europe like France and Germany bully our government around what do we care they need a good kick up the ass. There are to many young people leaving Ireland too many family's broken up over the Irish governments constant **** ups which us the Irish people have to pay for.

Which ever way you vote just consider us the Irish people not useless ****s we call our government.

carveone

beeftotheheels wrote: »

Bullseye1 wrote: »

Has it ever been explained why we have to borrow from the markets regardless? It makes absolutely no sense to borrow money to pay wages, SW, pensions etc.
.....

This is why smaller cuts over a longer period are generally preferred to huge cuts now. The huge cuts don't actually save the amount they would appear to save, and have hugely negative knock on consequences for the rest of the economy.

I guess it's hard to underestimate the size of the correction the economy underwent without seeing the GDP numbers. According to googles graphs:

2005: 6.02%
2006: 5.32%
2007: 5.63%
2008: -3.55%
2009: -7.58%

An 8% correction in an economy is a nightmare. We got lulled into the dream that the 6% growth rate would last forever allowing us to run a relatively tight budget surplus for the good years on enormous GDP growth, while also reducing the debt (but only as a % of GDP). Meanwhile running up salaries and welfare and pensions and inflation based on the 6% forever numbers.

The graphs actually look ok percentage-of-GDP-wise until 2008 when it all goes absolutely horrible. The budget deficit is so bad by 2011 it's eye watering. I guess the government couldn't just cut everything by the same amount due to what beeftotheheels says - you can't turn an economy on a dime... The private and building sectors took the hit almost instantly though.

Edit: Oops, that's a touch off topic...

carveone

kearn83 wrote: »

The only way this country can help getting out of recession is by sticking with the EU we need to borrow money we need to create jobs without EU help we are screwed. Let the big boys of Europe like France and Germany bully our government around what do we care they need a good kick up the ass.

That's the funny thing though. As beeftotheheels has pointed out above, the rules of the Fiscal Compact are just restatements of the existing EU regulations that have been around for ages and that we've already committed to. Even if we votes no, that would not change that necessity to follow the rules. So there isn't bullying involved so much as a further commitment to follow the rules.

It's interesting looking at all the graphs though. Shows how an economy can head off a cliff with all the numbers looking just fine up until the engine explodes. Assuming you cover all the warning lights on the dashboard with a piece of cardboard of course :rolleyes:.

Edit: I've always though the first big flashing light was labelled "Galway infrastructure fail". Taped over the one and carried on...

kearn83

You make good point money alone cant help with the countries problems, I just think with Europe on our side and by working together we can prosper and slowly but surely pull Ireland and other struggling countries out of recession and set in stone procedures that can prevent the same to happen in the future.

Germany have managed to stay out of recession and surely learning from them and been given good direction that clearly our government seem to be lacking would be a plus.

carveone

kearn83 wrote: »

I just think with Europe on our side and by working together we can prosper and slowly but surely pull Ireland and other struggling countries out of recession and set in stone procedures that can prevent the same to happen in the future.

I sure hope so. Ireland sure seems to be pulling it around and there's been more good news than bad news recently. Perhaps there should be more democratic procedures around the budget in future - after all there wasn't much between FG and FF in the 2007 election other than who could spend the most money.
Maybe we could have a working group of professional accountants and economists and historians to show us nasty past mistakes (and boards.ie people!) who have provably less conflicts of interest. Their concerns and advice would have to be published and considered by the department of Finance regardless of political concerns. I do think that previous Ministers of Finance were in it for the ego trip!

meglome

beeftotheheels wrote: »

Not quite that simple I'm afraid.

Let's look at the case of Mr X, a higher paid public servant who earns €200k.

We cut his salary by €100k so we save €100k, right?

Wrong.

Of the €100k we cut 50% odd had come back to us already through income taxes. So after income taxes cutting €100k saves us €50k. But then Mr X cuts back on spending. Which reduces the amount of VAT we get out of him. It also puts pressure on the businesses Mr X used to spend his salary in.

This is why smaller cuts over a longer period are generally preferred to huge cuts now. The huge cuts don't actually save the amount they would appear to save, and have hugely negative knock on consequences for the rest of the economy.

That's not to say I approve of public sector employees earning €200k in Ireland - I don't. I just chose this as an example.

I keep saying this to people over on The Journal as they scream for slashing the public service pay. And unsurprisingly they keep calling for it. I have never in my life seen so many people calling for things that will do the exact opposite of what they claim they want. You try to explain that but it makes no difference either.

carveone

meglome wrote: »

I keep saying this to people over on The Journal as they scream for slashing the public service pay. And unsurprisingly they keep calling for it. I have never in my life seen so many people calling for things that will do the exact opposite of what they claim they want. You try to explain that but it makes no difference either.

Ok, I'm way off topic now but do you think it would be possible (or legal) to direct social welfare payments given how much of government spending it comprises? You hear about children going hungry but I still see a lot of people heading directly to the pub from the post office (I'm not pointing fingers here, just saying it happens and I see it happening).

If the social welfare office issued cards that could only be used to purchase basic necessities: food/clothing/school books/etc, then that would direct more of this money back into the economy. Maybe. This is heading down the food stamps route and I'm possibly grasping at straws.

Edit: I thought the Journal would be against slashing public service pay given how left leaning their forums are... At least on the Treaty front.

meglome

carveone wrote: »

Ok, I'm way off topic now but do you think it would be possible (or legal) to direct social welfare payments given how much of government spending it comprises? You hear about children going hungry but I still see a lot of people heading directly to the pub from the post office (I'm not pointing fingers here, just saying it happens and I see it happening).

No idea on the first point.
I think there's no doubt we should be concerned about how some social welfare is spent.

carveone wrote: »

If the social welfare office issued cards that could only be used to purchase basic necessities: food/clothing/school books/etc, then that would direct more of this money back into the economy. Maybe. This is heading down the food stamps route and I'm possibly grasping at straws.

I personally believe a lot of social benefits should be paid with a 'credit card'. A card which should not allow the purchase of certain goods. How easy or legal that is to do is another point.

carveone wrote: »

Edit: I thought the Journal would be against slashing public service pay given how left leaning their forums are... At least on the Treaty front.

I think if you're looking for sense in the comments on The Journal you're looking in the wrong place

Lockstep

I'll be voting Yes.

I have yet to see a single No argument that sways me.

kearn83

The aim of the Treaty is to ensure that the euro area is a stable currency system. It seeks to do this by introducing common rules to foster budgetary discipline among the countries in the euro area, then to strengthen the coordination of their economic policies and, finally, to improve the way they manage the Euro zone by strengthening its governance system.


However, a 'no' vote risks diminished influence for Ireland and potentially a second tier status for Ireland within the Euro zone.Euro zone countries that do not ratify the Treaty will not have a vote in the election of the President of the Euro Summit (the meeting of Eurozone Heads of State and Government).

Any country that fails to ratify the fiscal treaty by next March will not be entitled to aid from the permanent European Stability Mechanism, which comes into force this summer. This presents a serious problem, because the lack of such a safety net would impede the campaign to regain access to private debt markets.

Happyman42

beeftotheheels wrote: »

This is a huge part of the issue and the intellectual dishonesty around the debate.

Isn't there an oversight on the part of economists though, in that they don't allow for the intervention of politics?
I'm undecided in all of this and I don't understand the finer points of economics but it seems to me over the years that politics often undermines the projections. I know of no economist that has been right on every issue affecting Irelands journey because the political scenario changes everything. Is there one?
I take economic forecasts with a pinch of salt tbh.

Ozymandius2011

kearn83 wrote: »

The aim of the Treaty is to ensure that the euro area is a stable currency system. It seeks to do this by introducing common rules to foster budgetary discipline among the countries in the euro area, then to strengthen the coordination of their economic policies and, finally, to improve the way they manage the Euro zone by strengthening its governance system.


However, a 'no' vote risks diminished influence for Ireland and potentially a second tier status for Ireland within the Euro zone.Euro zone countries that do not ratify the Treaty will not have a vote in the election of the President of the Euro Summit (the meeting of Eurozone Heads of State and Government).

Any country that fails to ratify the fiscal treaty by next March will not be entitled to aid from the permanent European Stability Mechanism, which comes into force this summer. This presents a serious problem, because the lack of such a safety net would impede the campaign to regain access to private debt markets.

The flaw in that argument is that the provisions denying non-ratifyers access to the ESM is contained in a different treaty over which the Oireachtas has a veto - the ESM Treaty which we are not getting a referendum on. The Referendum Commission admitted today at the press conference (as reported on RTE News at One) that the Oireachtas can theoretically block the ESM Treaty despite the govt's support for it. Unlike the Fiscal Compact, the ESM Treaty is under the ambit of the EU and therefore requires unanimity to come into force. Since the ESM Treaty and Fiscal Compact are interdependent, the threats contained in one fall if the other does.

Secondly, in the final French Presidential Election debate last night, Francois Hollande reiterated his intention to renegotiate the Treaty. Therefore we may be voting on a Treaty that will never come into force. This referendum is therefore premature. By voting no we can seek a better deal at the impending renegotiations heralded by a Hollande Presidency. The realpolitic is that the Fiscal Compact and the ESM will not happen without the support of France.

Happyman42

Ozymandius2011 wrote: »

The flaw in that argument is that the provisions denying non-ratifyers access to the ESM is contained in a different treaty over which the Oireachtas has a veto - the ESM Treaty which we are not getting a referendum on. The Referendum Commission admitted today at the press conference (as reported on RTE News at One) that the Oireachtas can theoretically block the ESM Treaty despite the govt's support for it. Unlike the Fiscal Compact, the ESM Treaty is under the ambit of the EU and therefore requires unanimity to come into force. Since the ESM Treaty and Fiscal Compact are interdependent, the threats contained in one fall if the other does.

Secondly, in the final French Presidential Election debate last night, Francois Hollande reiterated his intention to renegotiate the Treaty. Therefore we may be voting on a Treaty that will never come into force. This referendum is therefore premature. By voting no we can seek a better deal at the impending renegotiations heralded by a Hollande Presidency. The realpolitic is that the Fiscal Compact and the ESM will not happen without the support of France.

That kinda underlines my point, that politics has a habit of wrecking the best sums of economists.

beeftotheheels

Happyman42 wrote: »

Isn't there an oversight on the part of economists though, in that they don't allow for the intervention of politics?
I'm undecided in all of this and I don't understand the finer points of economics but it seems to me over the years that politics often undermines the projections. I know of no economist that has been right on every issue affecting Irelands journey because the political scenario changes everything. Is there one?
I take economic forecasts with a pinch of salt tbh.

Economics is a social science, there are no hard and fast right and wrong answers.

Anyone who believes that there is one simple answer out there to our troubles which we are being prevented from following because of malice or ineptitude at the level of the EU/ ECB/ Germany/ unions/ social welfare recipients/ rich people/ oil companies/ insert other here is guilty of wishful thinking.

Ozymandius2011

With regard to Irish bosses of multinationals calling for a yes vote - remember that the general manager Intel Ireland was appointed to a state-board by Mary Coughlan after the successful yes campaign which he supported in 2009. It was reported in the news today that the boss of the Irish branch of Intel is supporting a yes vote. Now while I will not cast aspersions on his motives, past events should give us pause for thought before uncritically accepting what we are being told. I am referring to this appointment in 2009.

beeftotheheels

Ozymandius2011 wrote: »

With regard to Irish bosses of multinationals calling for a yes vote - remember that the head of Intel Ireland was appointed to a state-board by Mary Coughlan after the successful yes campaign which he supported in 2009.

Post hoc ergo propter hoc?

Ozymandius2011

beeftotheheels wrote: »

Post hoc ergo propter hoc?

Caveat emptor.

Happyman42

beeftotheheels wrote: »

Economics is a social science, there are no hard and fast right and wrong answers.

Exactly. Which is why I take forecasts or recomendations, based on economics alone, with a pinch of salt. To say that this will happen or that will happen if we vote no is a bit misleading if you don't factor in what might happen politically, which, as stated by another poster, may lay bare all the scribblings of economists. That is exactly what has happened up to now imo.

Scofflaw

Ozymandius2011 wrote: »

The flaw in that argument is that the provisions denying non-ratifyers access to the ESM is contained in a different treaty over which the Oireachtas has a veto - the ESM Treaty which we are not getting a referendum on. The Referendum Commission admitted today at the press conference (as reported on RTE News at One) that the Oireachtas can theoretically block the ESM Treaty despite the govt's support for it. Unlike the Fiscal Compact, the ESM Treaty is under the ambit of the EU and therefore requires unanimity to come into force. Since the ESM Treaty and Fiscal Compact are interdependent, the threats contained in one fall if the other does.

Secondly, in the final French Presidential Election debate last night, Francois Hollande reiterated his intention to renegotiate the Treaty. Therefore we may be voting on a Treaty that will never come into force. This referendum is therefore premature. By voting no we can seek a better deal at the impending renegotiations heralded by a Hollande Presidency. The realpolitic is that the Fiscal Compact and the ESM will not happen without the support of France.

Sorry - can you please stop repeating that the government have a veto over the ESM. They don't. ESM goes ahead as long as countries subscribing 90% of the capital ratify. There is no Irish veto.

What the government has a veto on is the amendment of Article 136 TFEU, which aims to provide a clear legal basis for ESM. Vetoing that amendment might, but probably wouldn't, prevent ESM going ahead. It was originally decided as a safety clause in case the German Constitutional Court ruled against EFSF on the basis of the 'no bailout' clauses in Articles 122 and 125 - but they didn't, and while the amendment remains useful and desirable, there is no guarantee that it is actually required. At this point, indeed, it is most likely that ESM would go ahead anyway.

And that's aside from the fact that the Irish government is realistically not going to veto the amendment.

Please get your facts straight in future.

cordially,
Scofflaw

Ozymandius2011

Scofflaw wrote: »

Sorry - can you please stop repeating that the government have a veto over the ESM. They don't. ESM goes ahead as long as countries subscribing 90% of the capital ratify. There is no Irish veto.

What the government has a veto on is the amendment of Article 136 TFEU, which aims to provide a clear legal basis for ESM. Vetoing that amendment might, but probably wouldn't, prevent ESM going ahead. It was originally decided as a safety clause in case the German Constitutional Court ruled against EFSF on the basis of the 'no bailout' clauses in Articles 122 and 125 - but they didn't, and while the amendment remains useful and desirable, there is no guarantee that it is actually required. At this point, indeed, it is most likely that ESM would go ahead anyway.

And that's aside from the fact that the Irish government is realistically not going to veto the amendment.

Please get your facts straight in future.

cordially,
Scofflaw

But if as is likely the French pull out of the Fiscal Compact as presently constituted, surely that makes it very unlikely the ESM Treaty will come into force?

ixtlan

Ozymandius2011 wrote: »

in the final French Presidential Election debate last night, Francois Hollande reiterated his intention to renegotiate the Treaty. Therefore we may be voting on a Treaty that will never come into force.

According to FG/Lab they have re-negotiated the IMF/Troika agreement, but you may notice little change. Hollande can likewise find ways to add to the treaty without requiring a re-ratification.

Ix.

Ozymandius2011

ixtlan wrote: »

According to FG/Lab they have re-negotiated the IMF/Troika agreement, but you may notice little change. Hollande can likewise find ways to add to the treaty without requiring a re-ratification.

Ix.

He has repeatedly stated he intends to reopen the Treaty. He has stated he will not ratify the present Treaty. If he doesn't ratify the existing Treaty then a new Treaty will be required. An Irish-style figleaf won't cut it. Scofflaw actually started a thread saying Hollande said he will not ratify the present Treaty.

Dirk Gently

Scofflaw wrote: »

Sorry - can you please stop repeating that the government have a veto over the ESM. They don't. ESM goes ahead as long as countries subscribing 90% of the capital ratify. There is no Irish veto.


Please get your facts straight in future.

cordially,
Scofflaw

This guy seems to disagree. He reckons we'll need a referendum on the ESM Treaty and Art.136. He seems to think it should (and by law will have to be) run and passed before the creation of the esm

I don't mind admitting I'm not sure which view is correct, I'm not even sure why it's a view and not a simple black and white fact. Seems to be a lot of rule bending, maybes and most likelys floating about at the moment.

beeftotheheels

Dirk Gently wrote: »

This guy seems to disagree. He reckons we'll need a referendum on the ESM Treaty and Art.136. He seems to think it should (and by law will have to be) run and passed before the creation of the esm

Some of his arguments have merit, some are nonsensical and non sequiter.

1. The exclusive competence argument. Might have some merit but I don't think that the CJEU would look too kindly on it, more likely to give the TSCG a conforming interpretation.

2. If he's right on the exclusive competence argument it certainly does not follow that a referendum in Ireland could be required, or indeed that it could fix it. We have to hold a referendum when we sign a treaty which surrenders greater foreign policy controls to the EU based on Crotty. Nothing to do with economic policy but with foreign policy.

So any changes to the rules around currency don't require a referendum under Crotty.

The TSCG is only being put to a referendum because it is not an EU treaty, and even then I suspect that that was a close call for the A-G.

We sign bilateral conventions (double tax treaties) which restrict our ability to levy taxes all the time and they never come anywhere near a plebiscite. Were the SC to actually rule that any treaty involving fiscal disciplines had to be put to the people they'd undermine Ireland almost entirely as a center for investment since they'd throw into question the legitimacy of our DTT network on which FDI relies heavily.

RandomName2

Lockstep wrote: »

I'll be voting Yes.

I have yet to see a single No argument that sways me.

Well the real bad (or good depending on your perspective) aspect of the treaty is the federalisation of national budgets. It's being done in response to the current crisis; not that it would have actually prevented this crisis, of course. If European collective decision making were to produce fiscal stability in relation to the single currency, Greece, for instance, would not have been included in the eurozone.

The idea that any Irish government between 1998 and 2008 would have had its budget questioned or interrupted at a European level, due to the exposure of the economy, is nonsense. So on these grounds the treaty increases the power of the EU relative to the national executive, without any corresponding payoff. Oh wait, the ESM.

Sand

Scofflaw wrote: »

Most of the negatives people raise - where not based simply on misunderstandings - seem to be objections to the fiscal limits, even though we've been signed up to the same fiscal limits for 20 years. What new negatives do you see?

Scoff, you're being a little economical with the truth if you consider the treaty limits to simply be a reaffirmation of the fiscal limits we have been signed up to already for 20 years already.

If that were truly the case, then there would be no argument for the treaty whatsoever - We've already signed up to the terms 20 years ago, right?

The new negatives I see are:

- Reinforcement of the lazy German narrative of the crisis as an entirely fiscal one. This is bad for Ireland, and the Eurozone. We need to take every occasion to reject the German narrative.

- Implementation of fiscal limits of extremely vague value into Irish law. Governments which go against these fiscal limits - even where breaking the limits makes economic and fiscal sense - will be in breach of the law. We will be making it illegal to pursue good economic policies.

- The vague value of the fiscal limits is highlighted by Ireland never breaching the Stability and Growth pact terms until the onset of the crisis in 2008. If the fiscal limits were in anyway useful Ireland should be the one bailing out Germany going by our relative performances from 2003-2008. You might say thats oversimplifying things, but thats whats being proposed - to implement into law a simplistic and wrongheaded economic narrative

- If we look at the current situation, what we currently need is for Germany to spend and spend and spend, whilst Ireland cuts and cuts. Even where it makes good economic sense for Germany to breach its budget deficit to promote Eurozone growth it will be unable to do so. In fact, given Germany is in breach of the terms as it stands, Germany will have to actually cut spending and pay down debt exactly when the Eurozone needs it to boost spending and fuel growth

- Its still prone to political influence of the large core states.

-Article 7 still allows an opt out should a qualified majority of the contracting partners back such an opt out- though it probably wont get to that stage because the contracting partners will have their votes in the Council too.

-Article 8.2 requires one contracting partner to bring another court: does anyone seriously believe that Germany is going to be brought to this court by *anyone*? The Germans are giving themselves the ability to meddle in and bully the small peripheral states whilst comfortable that no one will go against them. This is very bad for Ireland and the Eurozone.

- Its penalties for "rogue" states are very poorly considered. Where Article 126-11 allows for some discretion in the penalties applied, Article 8-2 only proposes financial penalties. This hardly resolves the problem. A "Cant pay" state will simply be unable to pay. A "Wont pay" state will be unlikely to pay.


We can continue to pursue the status quo, where we remind the Germans that we signed up to these terms 20 years ago, that our adherence to them is monitored by the EU already, that we observed those terms far better than they ever did, and that as soon as we get the ship righted we will continue to honour those terms for whatever good it does us.

And if in some point in the future we are forced to back this treaty as the price of some "bailout" from Germany, grand, we'll do it then when there is a benefit to us involved. The fiscal treaty even anticipates that some contracting partners will join at a later point. No hassle.

On the other hand, given we are already signed up to these fiscal terms, is there any particular reason to implement this treaty into Irish law?

If Ireland were the only country in the world in any kind of trouble - and certainly it's easy to get that impression in Irish forums and media - I doubt there would be much of a question mark over the success of the programme. The risks to the programme are primarily exogenous.

Weren't exogenous risks considered when the plan was put together? Or did everyone just optimistically predict great success and dismiss the possibility of things not going as well as hoped?

I hope they considered exogenous risks when they pulled together the plan underpinning this fiscal treaty we're supposed to have such confidence in.

Scofflaw

Sand wrote: »

Scoff, you're being a little economical with the truth if you consider the treaty limits to simply be a reaffirmation of the fiscal limits we have been signed up to already for 20 years already.

If that were truly the case, then there would be no argument for the treaty whatsoever - We've already signed up to the terms 20 years ago, right?

No, in that case the arguments would be better enforcement, more consultation, and ESM access.

Sand wrote: »

The new negatives I see are:

- Reinforcement of the lazy German narrative of the crisis as an entirely fiscal one. This is bad for Ireland, and the Eurozone. We need to take every occasion to reject the German narrative.

The Germans certainly have a very particular view of the crisis, but if that's their price for progress that's their price - because, again, none of the limits are new. Nor will they go away if Ireland votes No - not even for Ireland.

Sand wrote: »

- Implementation of fiscal limits of extremely vague value into Irish law. Governments which go against these fiscal limits - even where breaking the limits makes economic and fiscal sense - will be in breach of the law. We will be making it illegal to pursue good economic policies.

No, there are exceptions for any conceivable circumstance where breaching the limits would actually be useful.

Sand wrote: »

- The vague value of the fiscal limits is highlighted by Ireland never breaching the Stability and Growth pact terms until the onset of the crisis in 2008. If the fiscal limits were in anyway useful Ireland should be the one bailing out Germany going by our relative performances from 2003-2008. You might say thats oversimplifying things, but thats whats being proposed - to implement into law a simplistic and wrongheaded economic narrative

I don't disagree with that, but again, those limits have been in place for 20 years. The Treaty is not aimed at Ireland, but at convincing the German public the PIIGS aren't actually fiscally reckless, something that's necessary before a German government can sign up to anything like eurobonds. As a handy side-effect the better enforcement means that the other large countries who were able to flout the S&G limits will be less able to do so.

Sand wrote: »

- If we look at the current situation, what we currently need is for Germany to spend and spend and spend, whilst Ireland cuts and cuts. Even where it makes good economic sense for Germany to breach its budget deficit to promote Eurozone growth it will be unable to do so. In fact, given Germany is in breach of the terms as it stands, Germany will have to actually cut spending and pay down debt exactly when the Eurozone needs it to boost spending and fuel growth

The Germans already have a debt brake in their Basic Law, so I'm afraid that's irrelevant.

Sand wrote: »

- Its still prone to political influence of the large core states.

-Article 7 still allows an opt out should a qualified majority of the contracting partners back such an opt out- though it probably wont get to that stage because the contracting partners will have their votes in the Council too.

A qualified majority leaves a little political room - but if that's an issue, why is the existing much larger political room in the Stability & Growth Pact not an issue for you?

Sand wrote: »

-Article 8.2 requires one contracting partner to bring another court: does anyone seriously believe that Germany is going to be brought to this court by *anyone*? The Germans are giving themselves the ability to meddle in and bully the small peripheral states whilst comfortable that no one will go against them. This is very bad for Ireland and the Eurozone.

I don't believe any country is likely to use it, to be honest. But this business of "ooh, nobody will dare challenge Germany"...eh, no. Does Germany never appear before the ECJ?

Sand wrote: »

- Its penalties for "rogue" states are very poorly considered. Where Article 126-11 allows for some discretion in the penalties applied, Article 8-2 only proposes financial penalties. This hardly resolves the problem. A "Cant pay" state will simply be unable to pay. A "Wont pay" state will be unlikely to pay.

What would you suggest as an alternative?

Sand wrote: »

We can continue to pursue the status quo, where we remind the Germans that we signed up to these terms 20 years ago, that our adherence to them is monitored by the EU already, that we observed those terms far better than they ever did, and that as soon as we get the ship righted we will continue to honour those terms for whatever good it does us.

And if in some point in the future we are forced to back this treaty as the price of some "bailout" from Germany, grand, we'll do it then when there is a benefit to us involved. The fiscal treaty even anticipates that some contracting partners will join at a later point. No hassle.

On the other hand, given we are already signed up to these fiscal terms, is there any particular reason to implement this treaty into Irish law?

We were also already going to implement these terms into Irish law, though, through the Fiscal Responsibility bill.

And in terms of benefit - I would consider ESM access an immediate benefit, because the time I see us as quite likely to need it is about 18 months away.

Sand wrote: »

Weren't exogenous risks considered when the plan was put together? Or did everyone just optimistically predict great success and dismiss the possibility of things not going as well as hoped?

I hope they considered exogenous risks when they pulled together the plan underpinning this fiscal treaty we're supposed to have such confidence in.

Sigh. Obviously they were, but there's a limit to how quickly you can safely cut a deficit, even if many idiots can't grasp that, and market confidence (and thus rates) is not a mathematical function of Irish deficits. The deficit cuts are generally regarded as being about as deep as you can safely go, which means that exogenous risks are as hedged for as they can be - and they remain larger than anything Ireland can do about them.

cordially,
Scofflaw

Sand

@Scofflaw

The Germans certainly have a very particular view of the crisis, but if that's their price for progress that's their price - because, again, none of the limits are new. Nor will they go away if Ireland votes No - not even for Ireland.

This Treaty isn't the price for anything because the Germans are not selling. I know English is not Germany's first language but they've been relentlessly clear on their answer to any sort of fiscal transfers - No.

The only horsetrading going on here is in the imagination of the treaties advocates. Germany is not engaged in any horsetrading. They view the problem as a fiscal problem. They view this treaty as the solution. The end.

No, there are exceptions for any conceivable circumstance circumstance conceivable by the authors at the time the treaties creation where breaching the limits would actually be useful In the view of the authors of the treaty.

Fixed that for you.

I don't disagree with that, but again, those limits have been in place for 20 years. The Treaty is not aimed at Ireland, but at convincing the German public the PIIGS aren't actually fiscally reckless, something that's necessary before a German government can sign up to anything like eurobonds.

But the Germans should already be convinced by that logic. Ireland has been following the fiscal terms of the Stability and Growth pact successfully up until a global economic crisis whilst Germany has been in nearly constant breach of them. Spain has a lower debt % vs. GDP than Germany does.

There is nothing in the German political leadership which is in anyway interested in reversing the German narrative of the crisis - they are themselves championing that narrative of fiscally reckless peripheral states trying to hoodwink and cheat decent, hardworking Germans. People who see this as some sort of trade-off are in denial. If there is a trade-off then let it be a trade-off: we are being asked to sign up to a bad deal which we wont be able to back out of anymore easily than the Euro. In exchange for....something in the future. Maybe.

As a handy side-effect the better enforcement means that the other large countries who were able to flout the S&G limits will be less able to do so

That's *extremely* optimistic. The enforcement is as prone to influence from the large core states as the existing EU system for the reasons I've noted already - if large states can beat the existing EU mechanism, they will beat the treaty mechanism for the same reason. All that's left then is to hope some tiny peripheral state, utterly dependent on Germany's goodwill for its economic survival, will engage in some David and Goliath legal struggle against Germany or its allies...

What "better enforcement" means is that it gives the large core states more opportunity to bully and intimidate the smaller peripheral states as they can take them to court, independently of the report of the Council. Even the threat to do so would do immense harm to the ability of that smaller state to raise debt.

Id be quite surprised if advocates of the "Do whatever the EU/ECB/Germany says" school of thought think Ireland would be able to resist that sort of influence...indeed, advocates of the "What we need round here is some Belfast efficiency" school of thought are counting on the Irish government being bullied and influenced against their own judgement - right?

The Germans already have a debt brake in their Basic Law, so I'm afraid that's irrelevant.

A debt brake law that hasn't stopped them exceeding the treaty fiscal limit by more than 20% already, so quite relevant.

A qualified majority leaves a little political room - but if that's an issue, why is the existing much larger political room in the Stability & Growth Pact not an issue for you?

Its a problem from a certain perspective, sure, but I don't see that the solution to the problem of large core members being practically unaffected by the penalties mechanic is granting those same large core members the ability to bring the smaller states to court for breaches identified in the opinion of the large core members alone.

That's like solving a stubbed toe by breaking the patients arm.

I don't believe any country is likely to use it, to be honest. But this business of "ooh, nobody will dare challenge Germany"...eh, no. Does Germany never appear before the ECJ?

Doesn't that undermine your own "better enforcement" angle? The reality is the only states likely to use it are the core states, like Germany or its allies.

If Germany breached the fiscal terms, can you honestly say you would be here advocating that Ireland should bring Germany to court over the issue? Its unlikely because you are selling the whole Treaty as being part of a scheme to win the goodwill and forgiveness of the German people for crimes both real and imagined. Ireland bringing Germany to court would erode all that goodwill in an instant.

That's going to be the choice faced by all small states - Germany will be free to bring them to court, but they'll be very slow to attract the ill-feeling of the banker of Europe.

This business of "ooh, nobody will dare challenge Germany? :pac: Your whole argument for the treaty is that we should back it to appease the Germans...

What would you suggest as an alternative?

The markets been doing a pretty good job so far of disciplining fiscal impropriety...states which stupidly guaranteed all the banks, lied about their fiscal situations, or continue spending well beyond their means are all getting very clear discipline on those issues.

And in terms of benefit - I would consider ESM access an immediate benefit, because the time I see us as quite likely to need it is about 18 months away.

Yeah, I saw us needing a real bailout back in November 2010 after the "bailout" was agreed. ESM access is not a real bailout so its of no benefit.

The EU/ECB will not permit a disorderly default in Ireland - they will do anything to prevent it regardless of us being in the Treaty or not, so long as we show ourselves as being honest and reasonable partners (I do not hold to the Provo/ULA narrative where being unreasonable and dishonest is seen as a valid option). We need to constantly and consistently point out the flaws in the bailout, how bad it is, how it cannot succeed. We cant get back into the markets anyway, so pronouncing how great a bad deal is only serves to eliminate our credibility.

Unfortunately, we have spent the past 2 years telling anyone who'll listen how great the bailout is and how it will definitely work and there's no problem. Its a little late in the day to suddenly turn that on its head...

Sigh. Obviously they were, but there's a limit to how quickly you can safely cut a deficit, even if many idiots can't grasp that, and market confidence (and thus rates) is not a mathematical function of Irish deficits. The deficit cuts are generally regarded as being about as deep as you can safely go, which means that exogenous risks are as hedged for as they can be - and they remain larger than anything Ireland can do about them.

If the exogenous risks were considered, might it be fair to qualify that by saying any exogenous risks conceivable by the troika at the time the bailouts creation were considered - I hope their imagination regarding conceivable circumstances has improved in the past few years. They'll need a really impressive imagination to consider all conceivable circumstances over the next 20-30 years where it might be advantageous to breach the fiscal limits in their new treaty.

If there is a limit on how quickly a deficit can be cut, *and* the exogenous risks were realistically assessed in the plans creation, wouldnt it be fair to say the plan was wrong headed from the start by calling on a tiny open economy to shoulder immense private and public debts without any relief, whilst cutting public spending hugely, all in the midst of a global economy that could at best be described as..."challenging".

Basically Scoff, the plan was a lousy, lousy plan from the start. Risks and downsides were dismissed or downplayed, benefits and progress over-hyped. It was an exercise in fantasy, where the EU/ECB were determined to string up Ireland as a bloody and broken example to Spain and Italy, to warn them from ever daring to look for a bailout.

And now they're back with their fiscal treaty which is of similar intellectual value.

carveone

Scofflaw wrote: »

Sand wrote:

- The vague value of the fiscal limits is highlighted by Ireland never breaching the Stability and Growth pact terms until the onset of the crisis in 2008. If the fiscal limits were in anyway useful Ireland should be the one bailing out Germany going by our relative performances from 2003-2008. You might say thats oversimplifying things, but thats whats being proposed - to implement into law a simplistic and wrongheaded economic narrative

I don't disagree with that, but again, those limits have been in place for 20 years.

Perhaps that's an indicator that they don't work. I sort of mentioned that yesterday at some point in my ramblings. From one point of view the limits seem upside down - there needs to be a more complex mechanism than the current blunt 3% deficit limit - this is useless in good times and restrictive in bad. A better one might be if your GDP growth rate is 8% then your budget surplus needs to be greater than 3%.

I'm not convinced that the authors of the treaty have any real idea of what a solution is comprised and are producing this as a kind of political stop gap to try and persuade the only people with any money (Germany I suppose) to loosen up. I think the Germans, already astute savers, see an all out rescue/euro bonds/etc as a way to obliterate their savings through inflationary measures. I can't imagine big (IFSC) anvils like Depfa really did much to help.

I get the feeling that Scofflaw, although a yes voter, isn't particularly jumping for joy over this one either (?)

Sure hasn't this been going on long enough (4000 years) :

Genesis 41.33: “Now therefore, let Pharaoh select a discerning and wise man, and set him over the land of Egypt. Let Pharaoh do this, and let him appoint officers over the land, to collect one-fifth of the produce of the land of Egypt in the seven plentiful years. And let them gather all the food of those good years that are coming, and store up grain under the authority of Pharaoh, and let them keep food in the cities. Then that food shall be as a reserve for the land for the seven years of famine which shall be in the land of Egypt, that the land may not perish during the famine.”

Scofflaw

Sand wrote: »

This Treaty isn't the price for anything because the Germans are not selling. I know English is not Germany's first language but they've been relentlessly clear on their answer to any sort of fiscal transfers - No.

The only horsetrading going on here is in the imagination of the treaties advocates. Germany is not engaged in any horsetrading. They view the problem as a fiscal problem. They view this treaty as the solution. The end.

Written in stone, like everything in politics...

Sand wrote: »

Fixed that for you.

Yes...don't do that. Quote me straight and then do your own. Anyway:

No, there are exceptions for any conceivable circumstance circumstance conceivable by the authors at the time the treaties creation where breaching the limits would actually be useful In the view of the authors of the treaty.

No - you should really look at what the definition of exceptional circumstances is - any unusual event that impacts the economy of the country, and period of negative GDP growth or even low growth. You're welcome to tell me what that doesn't cover that would produce a deficit.

But the Germans should already be convinced by that logic. Ireland has been following the fiscal terms of the Stability and Growth pact successfully up until a global economic crisis whilst Germany has been in nearly constant breach of them. Spain has a lower debt % vs. GDP than Germany does.

They're apparently not, though. Either that, or the Treaty is not Germany's baby.

There is nothing in the German political leadership which is in anyway interested in reversing the German narrative of the crisis - they are themselves championing that narrative of fiscally reckless peripheral states trying to hoodwink and cheat decent, hardworking Germans. People who see this as some sort of trade-off are in denial. If there is a trade-off then let it be a trade-off: we are being asked to sign up to a bad deal which we wont be able to back out of anymore easily than the Euro. In exchange for....something in the future. Maybe.

But you haven't put forward a convincing case for this being a bad deal other than that it "enshrines the German narrative of the crisis", even though the limits were first created 20 years before the crisis. Is your objection here purely about feeling slighted by the German viewpoint?

That's *extremely* optimistic. The enforcement is as prone to influence from the large core states as the existing EU system for the reasons I've noted already - if large states can beat the existing EU mechanism, they will beat the treaty mechanism for the same reason. All that's left then is to hope some tiny peripheral state, utterly dependent on Germany's goodwill for its economic survival, will engage in some David and Goliath legal struggle against Germany or its allies...

Rubbish. Not sure you've even bothered reading the mechanisms before trotting this out. The two mechanisms are quite different in terms of how easy it is for large states to prevent sanctions. In one all they needed to do was not support them and they had pretty much a guaranteed block - in this version they need to line up a proper qualified majority, which includes a numerical majority.

What "better enforcement" means is that it gives the large core states more opportunity to bully and intimidate the smaller peripheral states as they can take them to court, independently of the report of the Council. Even the threat to do so would do immense harm to the ability of that smaller state to raise debt.

Id be quite surprised if advocates of the "Do whatever the EU/ECB/Germany says" school of thought think Ireland would be able to resist that sort of influence...indeed, advocates of the "What we need round here is some Belfast efficiency" school of thought are counting on the Irish government being bullied and influenced against their own judgement - right?

Against an utterly fixed narrative that small states spend their days in fear and trembling while the locker-room bullies strut about unchallenged, there's not much point in arguing. It always amazes me any small state has ever signed up for the EU, let alone queued and jumped hoops to get in, but they have - probably because your mental picture of the EU is rather far from reality.

A debt brake law that hasn't stopped them exceeding the treaty fiscal limit by more than 20% already, so quite relevant.

Put in place in December last year. So, no, not relevant to current or past levels of debt, but rather relevant to your claim the Treaty would in future shackle Germany.

Its a problem from a certain perspective, sure, but I don't see that the solution to the problem of large core members being practically unaffected by the penalties mechanic is granting those same large core members the ability to bring the smaller states to court for breaches identified in the opinion of the large core members alone.

That's like solving a stubbed toe by breaking the patients arm.

See above re your imaginary EU.

Doesn't that undermine your own "better enforcement" angle? The reality is the only states likely to use it are the core states, like Germany or its allies.

If Germany breached the fiscal terms, can you honestly say you would be here advocating that Ireland should bring Germany to court over the issue? Its unlikely because you are selling the whole Treaty as being part of a scheme to win the goodwill and forgiveness of the German people for crimes both real and imagined. Ireland bringing Germany to court would erode all that goodwill in an instant.

That's going to be the choice faced by all small states - Germany will be free to bring them to court, but they'll be very slow to attract the ill-feeling of the banker of Europe.

And again we're back at a paranoid fear of the larger states. Plus, again, not reading the Treaty. The Treaty does not empower the states to take each other to court for breaches of the fiscal limits.

This business of "ooh, nobody will dare challenge Germany? :pac: Your whole argument for the treaty is that we should back it to appease the Germans...

No. Again, this is your version of the world, not mine. Not "appease". It's a quid pro quo.

The markets been doing a pretty good job so far of disciplining fiscal impropriety...states which stupidly guaranteed all the banks, lied about their fiscal situations, or continue spending well beyond their means are all getting very clear discipline on those issues.

Are you claiming the ratings agencies and the markets did a good job of enforcing sense over the last decade?

Yeah, I saw us needing a real bailout back in November 2010 after the "bailout" was agreed. ESM access is not a real bailout so its of no benefit.

A real bailout being where people give you free money?

The EU/ECB will not permit a disorderly default in Ireland - they will do anything to prevent it regardless of us being in the Treaty or not, so long as we show ourselves as being honest and reasonable partners (I do not hold to the Provo/ULA narrative where being unreasonable and dishonest is seen as a valid option). We need to constantly and consistently point out the flaws in the bailout, how bad it is, how it cannot succeed. We cant get back into the markets anyway, so pronouncing how great a bad deal is only serves to eliminate our credibility.

Unfortunately, we have spent the past 2 years telling anyone who'll listen how great the bailout is and how it will definitely work and there's no problem. Its a little late in the day to suddenly turn that on its head...

My point about 18 months had nothing to do with all that, though. The troika funding runs out in December 2013, and we have 2014 to fund. Even if the programme has worked absolutely to the letter, we will have an €8bn maturing government bond in mid-January, and an expected deficit of €10bn.

If the exogenous risks were considered, might it be fair to qualify that by saying any exogenous risks conceivable by the troika at the time the bailouts creation were considered - I hope their imagination regarding conceivable circumstances has improved in the past few years. They'll need a really impressive imagination to consider all conceivable circumstances over the next 20-30 years where it might be advantageous to breach the fiscal limits in their new treaty.

If you're cutting as fast as you can, then you can't cut faster, no matter what the exogenous risks.

If there is a limit on how quickly a deficit can be cut, *and* the exogenous risks were realistically assessed in the plans creation, wouldnt it be fair to say the plan was wrong headed from the start by calling on a tiny open economy to shoulder immense private and public debts without any relief, whilst cutting public spending hugely, all in the midst of a global economy that could at best be described as..."challenging".

Basically Scoff, the plan was a lousy, lousy plan from the start. Risks and downsides were dismissed or downplayed, benefits and progress over-hyped. It was an exercise in fantasy, where the EU/ECB were determined to string up Ireland as a bloody and broken example to Spain and Italy, to warn them from ever daring to look for a bailout.

And now they're back with their fiscal treaty which is of similar intellectual value.

As far as I can see, all of the above posits as an alternative a universe where either Ireland had not taken on "immense private and public debts", or where everyone else was so flush with cash and their own banks and finances so rock-solid that they could afford to generously say "sure, don't worry about it".

Complete debt forgiveness - heck, even partial debt forgiveness - would be nice. But when debt is forgiven, somebody somewhere makes a loss. Who shoulders Ireland's debt on Ireland's behalf, and why? What's in it for them?

cordially,
Scofflaw

Scofflaw

carveone wrote: »

Perhaps that's an indicator that they don't work. I sort of mentioned that yesterday at some point in my ramblings. From one point of view the limits seem upside down - there needs to be a more complex mechanism than the current blunt 3% deficit limit - this is useless in good times and restrictive in bad. A better one might be if your GDP growth rate is 8% then your budget surplus needs to be greater than 3%.

It's hard to say whether they would work, since several countries - primarily France and Germany - drove a coach and horses through them one way, while Greece drove a submarine through them the other way.

I don't see the limits themselves as that poor an idea, at least partly because they're not as blunt as they're often painted. They're based on three-year averages, and they do take account of special circumstances. If you need to put a stimulus in, there's room to do so.And if times are tight, the system takes account of that:

Non-compliance with the numerical benchmark for debt reduction should not be sufficient to establish the existence of an excessive deficit, which should take into account the whole range of relevant factors covered by the Commission’s report under Article 126(3) TFEU. In particular, the assessment of the effect of the cycle and the composition of the stock-flow adjustment on debt developments may be sufficient to avoid that the existence of an excessive deficit be established on the basis of the debt criterion.

carveone wrote: »

I'm not convinced that the authors of the treaty have any real idea of what a solution is comprised and are producing this as a kind of political stop gap to try and persuade the only people with any money (Germany I suppose) to loosen up. I think the Germans, already astute savers, see an all out rescue/euro bonds/etc as a way to obliterate their savings through inflationary measures. I can't imagine big (IFSC) anvils like Depfa really did much to help.

Probably not! But the Treaty isn't a solution, or the solution - it's part of the architecture of improvement to economic coordination. It just happens to be the bit we get to hold a referendum on.

I get the feeling that Scofflaw, although a yes voter, isn't particularly jumping for joy over this one either (?)

Not terribly. I just don't see any particular downside to it - it's a slight improvement over the current arrangements, doesn't contain anything much we can hurt ourselves with, and for political reasons it's wound up being the entry ticket to ESM, which is something I think we'll need in the near future.

A No vote will not prevent the application of the fiscal limits contained in the Treaty to Ireland, so I find it hard to take seriously any argument against the Treaty that revolves around those limits, as most of them do - and simultaneously, of course, find it hard to argue for adoption of the Treaty on the basis of those limits.

The other arguments raised seem to boil down to voting No because the Treaty will not make everything magically better,which seems daft, or in order to stick it to the bad people of your personal choice, be that banks, the government, Germany, Sarkozy, the ECB, the EU, or whatever. Those aren't really arguments.

carveone wrote: »

Sure hasn't this been going on long enough (4000 years) :

Genesis 41.33: “Now therefore, let Pharaoh select a discerning and wise man, and set him over the land of Egypt. Let Pharaoh do this, and let him appoint officers over the land, to collect one-fifth of the produce of the land of Egypt in the seven plentiful years. And let them gather all the food of those good years that are coming, and store up grain under the authority of Pharaoh, and let them keep food in the cities. Then that food shall be as a reserve for the land for the seven years of famine which shall be in the land of Egypt, that the land may not perish during the famine.”

I imagine the grumbling in the fields along the Nile was pretty fierce, too. Of course, the authorities in Pharaonic Egypt would probably have approached a "No Grain Confiscation" campaign somewhat differently.

cordially,
Scofflaw

goat2

at the moment looking through the booklet that came in the post ( The Stability Treaty) and will make up my mind when i have looked up what it all means to us,

Sand

Couple of points:

They're apparently not, though. Either that, or the Treaty is not Germany's baby.

Or they simply don't share this imaginary quid pro quo you presume exists without any evidence whatsoever, other than hope...

Have you *any* evidence at all that Germany is offering anything meaningful in exchange for this treaty? If they are, why are they not in the Treaty? Lets be clear - you're hoping that the Germans view this as an exchange or a payoff. The Germans themselves have said again and again and again and again - No.

Against an utterly fixed narrative that small states spend their days in fear and trembling while the locker-room bullies strut about unchallenged, there's not much point in arguing.

So you think then that if Germany breaches the terms of the fiscal treaty that Ireland should bring Germany to court? You would be advocating that, right? I mean, what would Ireland have to fear from going against Germany in this post-conflict Europe of partners and common interests...

If this Europe existed, we wouldn't need enforcement and the stability and growth pact would be perfectly sufficient. The reality is France and Germany blatantly ignored the Stability and Growth pact when it suited them and the only penalty measures taken were against Portugal in 2002 and Greece in 2005. Germany and France both used their influence to avoid penalties and will continue to do so. Giving France and Germany more power to bully smaller states is not going to solve that problem.

Rubbish. Not sure you've even bothered reading the mechanisms before trotting this out. The two mechanisms are quite different in terms of how easy it is for large states to prevent sanctions. In one all they needed to do was not support them and they had pretty much a guaranteed block - in this version they need to line up a proper qualified majority, which includes a numerical majority.

Actually you clearly didn't bother to read the mechanisms - the vote of the state in question was and is automatically discounted from the decision under the existing EU treaties so they never had a veto by simply not supporting them.

When the Council adopts the measures referred to in paragraphs 6 to 9, 11 and 12, it shall act
without taking into account the vote of the member of the Council representing the Member State
concerned.
A qualified majority of the other members of the Council shall be defined in accordance with
Article 238(3)(a).

They needed allies to block the mechanism previously, the same allies that will help them block the mechanism proposed under the fiscal treaty. They will find those allies for the same reasons - it will never be in the interests of the smaller states to go against the core when the core is bankrolling those small states.

You should know this: the spectre of Ireland and the other peripheral states being driven out of the EU and Euro if we didnt sign up to every daft deal proposed by the core has been pretty consistently advocated by supporters of the core narrative.

And again we're back at a paranoid fear of the larger states. Plus, again, not reading the Treaty. The Treaty does not empower the states to take each other to court for breaches of the fiscal limits.

Wrong:

Article 8 - 1

Where a Contracting Party considers, independently of the Commission's
report, that another Contracting Party has failed to comply with Article 3 (2), it may also bring the
matter to the Court of Justice.

Article 8-2

If, on the basis of its own assessment or of an assessment by the European Commission, a
Contracting Party considers that another Contracting Party has not taken the necessary measures to
comply with the judgment of the Court of Justice referred to in paragraph 1, it may bring the case
before the Court of Justice

I'll take your misdirection above though as admitting that no, you wouldnt be advocating Ireland take Germany to court should it breach the terms of the fiscal compact. I'm not sure why you believe any of the other smaller states would be much braver - and would any of France, Italy or Spain really champion a puritan stance against fiscal deficits and excessive debt? :pac:

For the record I'm not paranoid or fearful of Germany or the larger states - its just I'm not naive. I think they're simply representing their own interests and that fine. I'm going to vote No to this treaty and I hope the majority of the country follows suit as that is in Ireland's interests.

I don't expect Germany to engage in any sort of vengeful or bitter retaliation against us as a result. I don't expect them to hold any grudges or engage in petty politics. I think that so long as we maintain an honest and reasonable attitude we will find the Germans and the EU and rest of the Eurozone will help us help ourselves. As I said we can happily point out to anyone concerned that we are already signed up to those fiscal limits and that we were model citizens in observing them up until 2008.

The fear of angering Germany/the core.... that's the argument of the advocates of the treaty. Don't project it on to me, thanks.

Scofflaw

Sand wrote: »

Couple of points:

Or they simply don't share this imaginary quid pro quo you presume exists without any evidence whatsoever, other than hope...

Have you *any* evidence at all that Germany is offering anything meaningful in exchange for this treaty? If they are, why are they not in the Treaty? Lets be clear - you're hoping that the Germans view this as an exchange or a payoff. The Germans themselves have said again and again and again and again - No.

I'm happy enough if what Germany gets out of it is a greater trust in the other eurozone states. It would be nice if that trust led to some material payoff, but I don't view that as necessary.

If the Fiscal Treaty were a straight exchange for something, I don't imagine it would buy something like eurobonds.

Sand wrote: »

So you think then that if Germany breaches the terms of the fiscal treaty that Ireland should bring Germany to court? You would be advocating that, right? I mean, what would Ireland have to fear from going against Germany in this post-conflict Europe of partners and common interests...

If this Europe existed, we wouldn't need enforcement and the stability and growth pact would be perfectly sufficient. The reality is France and Germany blatantly ignored the Stability and Growth pact when it suited them and the only penalty measures taken were against Portugal in 2002 and Greece in 2005. Germany and France both used their influence to avoid penalties and will continue to do so. Giving France and Germany more power to bully smaller states is not going to solve that problem.

I guess if Germany didn't enact the corrective mechanisms required by the Treaty into law, yes, Ireland should take Germany to court. That seems unlikely, though.

I think, however, that you think the Treaty gives the Member States the power to - or even requires them to - take each other to court over breaches of the fiscal limits in the Treaty.

And that's not in fact the case.

Sand wrote: »

Actually you clearly didn't bother to read the mechanisms - the vote of the state in question was and is automatically discounted from the decision under the existing EU treaties so they never had a veto by simply not supporting them.

When the Council adopts the measures referred to in paragraphs 6 to 9, 11 and 12, it shall act
without taking into account the vote of the member of the Council representing the Member State
concerned.
A qualified majority of the other members of the Council shall be defined in accordance with
Article 238(3)(a).

They needed allies to block the mechanism previously, the same allies that will help them block the mechanism proposed under the fiscal treaty. They will find those allies for the same reasons - it will never be in the interests of the smaller states to go against the core when the core is bankrolling those small states.

That's a fair addendum, but doesn't change the point being made, which is that there is a difference between needing a minority to block and needing a majority to block. Since your ideas revolve around big-state/small-state differences, the difference should be obvious.

And coming back to this "small state/big state" mental thing, the states currently being bailed out are Portugal, Greece, and Ireland - but those on the watch list are Spain and Italy, which are not small states. So mapping a small state/big state divide onto the bailed-out/bailing-out divide doesn't match reality.

Sand wrote: »

You should know this: the spectre of Ireland and the other peripheral states being driven out of the EU and Euro if we didnt sign up to every daft deal proposed by the core has been pretty consistently advocated by supporters of the core narrative.

So? Leaving the EU has been pretty consistently advocated by opponents of the core narrative.

Sand wrote: »

Wrong:

Article 8 - 1

Where a Contracting Party considers, independently of the Commission's
report, that another Contracting Party has failed to comply with Article 3 (2), it may also bring the
matter to the Court of Justice.

Article 8-2

If, on the basis of its own assessment or of an assessment by the European Commission, a
Contracting Party considers that another Contracting Party has not taken the necessary measures to
comply with the judgment of the Court of Justice referred to in paragraph 1, it may bring the case
before the Court of Justice

Yes...now you need to look up Article 3(2):

2. The rules mentioned under paragraph 1 shall take effect in the national law of the Contracting Parties at the latest one year after the entry into force of this Treaty through provisions of binding force and permanent character, preferably constitutional, or otherwise guaranteed to be fully respected and adhered to throughout the national budgetary processes. The Contracting Parties shall put in place at national level the correction mechanism mentioned in paragraph 1.e) on the basis of common principles to be proposed by the European Commission, concerning in particular the nature, the size and the time-frame of the corrective action to be undertaken, also in the case of exceptional circumstances, and the role and independence of the institutions responsible at national level for monitoring the observance of the rules. This mechanism shall fully respect the prerogatives of national Parliaments.

In other words, the states can take each other to court over failure to enshrine the fiscal rules in an adequate format. Not over breaches of the fiscal limits on an ongoing basis.

Sand wrote: »

I'll take your misdirection above though as admitting that no, you wouldnt be advocating Ireland take Germany to court should it breach the terms of the fiscal compact. I'm not sure why you believe any of the other smaller states would be much braver - and would any of France, Italy or Spain really champion a puritan stance against fiscal deficits and excessive debt? :pac:

See above. The question doesn't actually arise, because the Treaty does not empower the Member States to take each other to court over breaches of the fiscal limits. That is not the enforcement mechanism.

A retraction of the charge of misdirection would be nice here - I may or may not be wrong (and I can't see where if I am) but I do not misdirect.

Sand wrote: »

For the record I'm not paranoid or fearful of Germany or the larger states - its just I'm not naive. I think they're simply representing their own interests and that fine. I'm going to vote No to this treaty and I hope the majority of the country follows suit as that is in Ireland's interests.

I don't expect Germany to engage in any sort of vengeful or bitter retaliation against us as a result. I don't expect them to hold any grudges or engage in petty politics. I think that so long as we maintain an honest and reasonable attitude we will find the Germans and the EU and rest of the Eurozone will help us help ourselves. As I said we can happily point out to anyone concerned that we are already signed up to those fiscal limits and that we were model citizens in observing them up until 2008.

The fear of angering Germany/the core.... that's the argument of the advocates of the treaty. Don't project it on to me, thanks.

I haven't done so at any point, nor is that my argument or anything to do with it, so you may extend me the same courtesy, and drop claims I want to "appease" Germany, with all the overtones that carries.

You say you're a realist, and you say you have no problem with Germany pursuing its interests, and that you don't see it as acting "bitter or vengeful". Neither do I. But you don't seem willing to factor in that "Germany" isn't a monolith, and that the German parliament is quite capable of frustrating their government's intentions when it comes to bailing out Ireland further.

Germany is putting its hand in its pocket for ESM funding - something that has been legally challenged in Germany, and something that had to be steered through their parliament with a degree of care and concessions. If Ireland requires a second bailout - which at this point I see as likely, due to the continued market negativity and Ireland's upcoming 2014 fiscal requirements, which are currently unfunded - and does not have ESM access, I can see the German government having difficulties extending us further funding. Not because they don't want to, but because they undoubtedly will face both political and legal challenges to their ability to do so.

On that basis I have no difficulty with voting Yes, because the upside is a certainty of bailout funding that actually improves our chances of not needing it, while the "downside" consists of accepting again those rules we are already signed up for and which, prior to this crisis, we were able to observe consistently. I don't see any actual downside in that, to be honest.

cordially,
Scofflaw

Sand

Scofflaw wrote: »

I'm happy enough if what Germany gets out of it is a greater trust in the other eurozone states. It would be nice if that trust led to some material payoff, but I don't view that as necessary.

If the Fiscal Treaty were a straight exchange for something, I don't imagine it would buy something like eurobonds.

Essentially Scoff, the answer there is that no, there is no evidence the Germans perceive the treaty as being part of a trade.

I guess if Germany didn't enact the corrective mechanisms required by the Treaty into law, yes, Ireland should take Germany to court. That seems unlikely, though.

I think, however, that you think the Treaty gives the Member States the power to - or even requires them to - take each other to court over breaches of the fiscal limits in the Treaty.

And that's not in fact the case.

So you'd only grant that Ireland *should* on the basis of your belief that Ireland cant (which is incorrect).

That's a fair addendum, but doesn't change the point being made, which is that there is a difference between needing a minority to block and needing a majority to block. Since your ideas revolve around big-state/small-state differences, the difference should be obvious.

It does change the point - big states like Germany will be judged by states which are dependent upon their goodwill for funding and concessions. As I noted, none of France, Spain, Italy, Belguim, Portugal, Greece, Ireland are going to be taking a puritan stance on enforcing the fiscal limits: nobody else in Europe even wants them, let alone wants them enforced. All of the states in the Eurozone will be desperate to win some minor concession from Germany - none of them will dare anger the Germans.

Germany will easily find allies to win qualified majorities like they have done in the past. Small states will find it much harder to win allies - its no mystery that of all the states to breach the terms prior to the crisis only Portugal and Greece suffered penalties.

So that particular mechanism is just as prone to the influence of the bigger states as the existing mechanism is.

And coming back to this "small state/big state" mental thing, the states currently being bailed out are Portugal, Greece, and Ireland - but those on the watch list are Spain and Italy, which are not small states. So mapping a small state/big state divide onto the bailed-out/bailing-out divide doesn't match reality.

Yep, you're listing the ready made allies Germany will find to avoid any penalty against Germany - afterall, Spain and Italy will be very much dependant on the goodwill of the Germans to win some relief on the ECB's bondbuying, Eurobonds, fiscal transfers etc...

So? Leaving the EU has been pretty consistently advocated by opponents of the core narrative.

Leaving the EU/Euro as a policy is madness. But the point is that the often stated vision of Ireland being beaten out of the Euro (and the EU!) if we didn't do what the big boys told us doesn't fit with your disbelief that the big nations might act in their own interest to the detriment of the smaller states.

Yes...now you need to look up Article 3(2):



In other words, the states can take each other to court over failure to enshrine the fiscal rules in an adequate format. Not over breaches of the fiscal limits on an ongoing basis.

Yeah, I've read it - breaching the fiscal limits on an ongoing basis is by definition a failure to enshrine the fiscal rules in an adequate format. 3(2) states the national budgetary policy will meet the fiscal restrictions in 3(1).

The rules set out in paragraph 1 shall take effect in the national law of the Contracting Parties at the latest one year after the entry into force of this Treaty through provisions of binding force and permanent character, preferably constitutional, or otherwise guaranteed to be fully respected and adhered to throughout the national budgetary processes. The Contracting Parties shall put in place at national level the correction mechanism referred to in paragraph 1(e) on the basis of common principles to be proposed by the European Commission, concerning in particular the nature, size and time-frame of the corrective action to be undertaken, also in the case of exceptional circumstances, and the role and independence of the institutions responsible at national level for monitoring compliance with the rules set out in paragraph 1. Such correction mechanism shall fully respect the prerogatives of national Parliaments.

I dont think the Eurozone will be impressed by claims of "Shure, we are fully respecting the treaties - honest. We dunno how we keep on breaching the limits. Ah well, shure it'll sort itself out in the end".

And you know that too. The "reassurance" that Germany seeks is that it will be able to intervene to investigate and punish "rogue states" in the Eurozone regardless of the Commission or the rest of the Eurozone. Articles 7 and 8 offers them that power. Without that power, the treaty is barely any more enforceable than the existing EU treaty.

See above. The question doesn't actually arise, because the Treaty does not empower the Member States to take each other to court over breaches of the fiscal limits. That is not the enforcement mechanism.

A retraction of the charge of misdirection would be nice here - I may or may not be wrong (and I can't see where if I am) but I do not misdirect.

Okay, I'll withdraw the charge of misdirection - its clear you're just mistaken in your belief that one contracting party cannot bring another contracting party to court over their breaches of the fiscal limits. That's fine, the man who never made a mistake never made anything.

I haven't done so at any point, nor is that my argument or anything to do with it, so you may extend me the same courtesy, and drop claims I want to "appease" Germany, with all the overtones that carries.

You say you're a realist, and you say you have no problem with Germany pursuing its interests, and that you don't see it as acting "bitter or vengeful". Neither do I. But you don't seem willing to factor in that "Germany" isn't a monolith, and that the German parliament is quite capable of frustrating their government's intentions when it comes to bailing out Ireland further.

Germany is putting its hand in its pocket for ESM funding - something that has been legally challenged in Germany, and something that had to be steered through their parliament with a degree of care and concessions. If Ireland requires a second bailout - which at this point I see as likely, due to the continued market negativity and Ireland's upcoming 2014 fiscal requirements, which are currently unfunded - and does not have ESM access, I can see the German government having difficulties extending us further funding. Not because they don't want to, but because they undoubtedly will face both political and legal challenges to their ability to do so.

On that basis I have no difficulty with voting Yes, because the upside is a certainty of bailout funding that actually improves our chances of not needing it, while the "downside" consists of accepting again those rules we are already signed up for and which, prior to this crisis, we were able to observe consistently. I don't see any actual downside in that, to be honest.

cordially,
Scofflaw

Its clear you and me wont agree on this, and that's fine - we didnt agree about the desperate necessity to reverse the guarantee, the danger of NAMA or the inevitable failure of the November 2010 bailout either. You didnt see the downsides in following "the plan" at that time as well. As time has progressed, the new "normal" has been reset further and further downwards. Its not so long ago Leo Varadkar was strung up and howled at by Official Ireland for daring to whisper that Ireland might need a second bailout. Now the requirement of second bailout is unashamedly voiced as an argument for this treaty. Quite amusing.

I'll be voting no. Its a bad treaty, with the wrong answer to a question nobody asked. Its against the interest of Ireland.

So long as Ireland is honest and reasonable in its dealings, Ireland will be supported - this has been constantly repeated and Ireland has done everything demanded of it under the "bailout" plan - its a lousy, lousy plan but that's hardly Ireland's fault. Perhaps the ESM may be cut off, maybe it wont but a way will be found. There was no bailout mechanism for Ireland in 2009, but a way was found when it suited the Troika.

Of course, we would be far better off if we get a real bailout. ESM access is not a bailout.

Lantus

I'll be voting no.

Not just for the first one but when the EU and the Irish gov come back again and again to secure the answer they want just like Lisbon.

Dont get fooled by some clever re-wording the 2nd or 3rd time around.

Either way Enda is set for life. A guranteed €100,000 lump sum upon retirement and €30,000 a year for being a teacher for 4 years (they count 34 years even though he's been a TD.)

Plus his TD's pension which could fetch him €100,000 annually. As well any other whole host of perks and paymens that normal folk could only dream of.

What manner of fiscal management created such a perverse and sick situation where TD's could amass so much personal wealth?

Sand

Lantus wrote: »

What manner of fiscal management created such a perverse and sick situation where TD's could amass so much personal wealth?

Irish fiscal management?

Scofflaw

Sand wrote:

Yeah, I've read it - breaching the fiscal limits on an ongoing basis is by definition a failure to enshrine the fiscal rules in an adequate format. 3(2) states the national budgetary policy will meet the fiscal restrictions in 3(1).

The rules set out in paragraph 1 shall take effect in the national law of the Contracting Parties at the latest one year after the entry into force of this Treaty through provisions of binding force and permanent character, preferably constitutional, or otherwise guaranteed to be fully respected and adhered to throughout the national budgetary processes. The Contracting Parties shall put in place at national level the correction mechanism referred to in paragraph 1(e) on the basis of common principles to be proposed by the European Commission, concerning in particular the nature, size and time-frame of the corrective action to be undertaken, also in the case of exceptional circumstances, and the role and independence of the institutions responsible at national level for monitoring compliance with the rules set out in paragraph 1. Such correction mechanism shall fully respect the prerogatives of national Parliaments.

I dont think the Eurozone will be impressed by claims of "Shure, we are fully respecting the treaties - honest. We dunno how we keep on breaching the limits. Ah well, shure it'll sort itself out in the end".

And you know that too. The "reassurance" that Germany seeks is that it will be able to intervene to investigate and punish "rogue states" in the Eurozone regardless of the Commission or the rest of the Eurozone. Articles 7 and 8 offers them that power. Without that power, the treaty is barely any more enforceable than the existing EU treaty.

I'm going to have to do some digging on this one, because what I see is that the Contracting Parties can take each other to the CJEU on the question of whether they have properly put legislation in place to ensure that the fiscal limits are respected - and that is not, as far as I can see, the same thing as taking each other to court for breaches of the fiscal limits when the Treaty is in operation.

The purpose, as far as I can see, is to add an extra binding to the idea of putting debt brakes into legislation, in that any attempt to water it down or put a loophole in it can result in a case being taken. I do not, however, see that if the legislation is considered adequate in itself, that there is any mechanism for the Contracting Parties to take each other to court over a breach of the limits. Nor is there any mention of such cases in any of the material either in the Treaty or elsewhere dealing with the excessive deficit procedure - yet the excessive deficit procedure definitely does deal with breaches of the fiscal limits, and the existence of a CJEU case in respect of breaches of fiscal limits can hardly be said to be either irrelevant or unimportant in that context.

IIEA on the subject seems to agree entirely with my position:

In connection with the requirement to include the debt brake provision in its national law, a Member State party to the Treaty may bring a case against another such Member State to the Court of Justice of the EU, either on its own initiative or on foot of a report by the European Commission.

The Court of Justice will adjudicate on whether the debt brake has been transposed correctly into national law.

If the Member State does not comply with the judgement of the Court, a fine (limited to 0.1% of GDP) can be imposed. The Court of Justice will not rule on whether the balanced budget rule or the other budgetary rules have themselves been breached.

Court of Justice involvement in relation to an intergovernmental non-EU Treaty is already enabled by Article 273 of the EU Treaty, which allows the Court to adjudicate in disputes between Member States.

http://www.iiea.com/blogosphere/the-stability-treaty-faq-frequently-asked-questions

cordially,
Scofflaw

femur61

Lantus wrote: »

I'll be voting no.

Not just for the first one but when the EU and the Irish gov come back again and again to secure the answer they want just like Lisbon.

What manner of fiscal management created such a perverse and sick situation where TD's could amass so much personal wealth?

The Fiscal treaty doesn't need our signature, it will go ahead without us.

I totally agree with that TDs in this country get vastly overpaid as do a lot of the PS. But I'm looking after my coffers by voting yes, I believe it will be the best option for this country in that we need foreign investment. One of our bargining tools beside speaking English, we trade in the Euro.

We will be on the outside looking in. If we have tight rules on borrowing then I believe all wages will come down to meet European rates.

BunShopVoyeur

I'll be voting no. However, I fully expect to be told off and made to vote again as I "didn't understand".

FreudianSlippers

BunShopVoyeur wrote: »

I'll be voting no. However, I fully expect to be told off and made to vote again as I "didn't understand".

We've never had the same referendum twice AFAIK, so it's highly unlikely it will happen on this one.

C14N

Lantus wrote: »

I'll be voting no.

Not just for the first one but when the EU and the Irish gov come back again and again to secure the answer they want just like Lisbon.

Dont get fooled by some clever re-wording the 2nd or 3rd time around.

Is it not somewhat ignorant to decide without even knowing the terms which way you're going to vote?

Lantus wrote: »

Either way Enda is set for life. A guranteed €100,000 lump sum upon retirement and €30,000 a year for being a teacher for 4 years (they count 34 years even though he's been a TD.)

Plus his TD's pension which could fetch him €100,000 annually. As well any other whole host of perks and paymens that normal folk could only dream of.

What manner of fiscal management created such a perverse and sick situation where TD's could amass so much personal wealth?

Has this got anything to do with the treaty at all?