Fiscal Treaty Megathread [Poll Reset]

Ghandee

Gurgle wrote: »

Apparently low corporation tax is not the main reason for so much FDI here.
http://www.rte.ie/news/2011/0225/fdi-business.html
http://www.forbes.com/lists/2011/6/best-countries-11_Ireland_CHI009.html

Also, we're the only native English speakers in the Eurozone.
I can't remember where, but I have heard that listed as the top reason for FDI here.

What about Engerland (for starters)

paddyandy

Another Sinn Fein Circus with the no vote . They'll never be forgiven if they succeed and the entire economy goes belly up .These are the good old days maybe .Big Flight if they get into power and many won't even consider Ireland with that gang in power .

Stark

Ghandee wrote: »

What about Engerland (for starters)

England isn't in the Eurozone.

Ghandee

Stark wrote: »

England isn't in the Eurozone.

Sorry, my bad.

E.U and Eurozone mix up.

I stand corrected

bnt

Gurgle wrote: »

Apparently low corporation tax is not the main reason for so much FDI here.
http://www.rte.ie/news/2011/0225/fdi-business.html
http://www.forbes.com/lists/2011/6/best-countries-11_Ireland_CHI009.html

Also, we're the only native English speakers in the Eurozone.
I can't remember where, but I have heard that listed as the top reason for FDI here.

Both those links use old data (2009-10) - and I was making the point that things have changed, and the education/innovation attraction is not as strong as it was. Assuming that data was accurate, that is, and the respondents to the surveys weren't making post facto justifications of economic decisions.

Some companies (especially in the Biomedical area) are complaining that they can't find suitably-qualified people - and they aren't going to invest in the training required if they think they might lose the tax advantage. I don't follow your point about the Eurozone: they don't have to be in the Eurozone, do they? They could just as easily set up shop in the UK, all things being equal. IMHO, the reasons why they don't aren't really about internal borders, or education, or the Euro: it's about the tax rate. They can compensate for poor education, to a point, if they have the money required to do so. But if the tax rate is not guaranteed to stay low in the long term, why should a multinational invest in Ireland, and not (say) India or the Philippines?

Ghandee

paddyandy wrote: »

Another Sinn Fein Circus with the no vote . They'll never be forgiven if they succeed and the entire economy goes belly up .These are the good old days maybe .Big Flight if they get into power and many won't even consider Ireland with that gang in power .

Post is hypocritical, and contradicts itself.:cool:

dvpower

Gurgle wrote: »

Apparently low corporation tax is not the main reason for so much FDI here.
http://www.rte.ie/news/2011/0225/fdi-business.html
http://www.forbes.com/lists/2011/6/best-countries-11_Ireland_CHI009.html

Also, we're the only native English speakers in the Eurozone.
I can't remember where, but I have heard that listed as the top reason for FDI here.

A recent Economist Intelligence Unit report lists 'access to EU market' as the top reason for investing in Ireland - something that can be offered by every other EU state, followed by 'fiscal stability' - something that almost every other EU state beats us on. Corporation tax comes in third place.

When it comes to Ireland specifically, access comes out on top, with “access to EU market” named by 46% of respondents, compared with 30% citing legal and fiscal stability and 29% citing the competitive corporate tax rate. Other important drivers are also tax-related, including favourable double-taxation treaties (16%) and sector-specific incentives (14%).

Scofflaw

Shane Ross wrote:

Imagine the global headlines: 'Ireland Endorses Redundant Fiscal Treaty'. And then a strap-line: 'President Hollande wins concessions on growth from Merkel'. We will be a laughing stock.

I seem to remember this "we'll be a laughing stock" argument being rightly derided when used to argue for a Yes at Lisbon 1.

Is this what the No side is reduced to already?

cordially,
Scofflaw

Justice for the individual

Scofflaw wrote: »

I seem to remember this "we'll be a laughing stock" argument being rightly derided when used to argue for a Yes at Lisbon 1.

Is this what the No side is reduced to already?

cordially,
Scofflaw

Remind me - what did we achieve with Lisbon 1 - more jobs, better economy?

Scofflaw

Justice for the individual wrote: »

Remind me - what did we achieve with Lisbon 1 - more jobs, better economy?

Nothing happened with Lisbon 1, which was a No.

cordially,
Scofflaw

paddyandy

The Shinners are going for broke with the no vote .They'll be consigned to political oblivion if they succeed and everything collapses on us .

K-9

Scofflaw wrote: »

Nothing happened with Lisbon 1, which was a No.

cordially,
Scofflaw

Unemployment more than doubled when we voted No!

Noreen1

K-9 wrote: »

That's for the Irish Government to work out. Eg. scrap the Croke Park agreement or let numbers fall by not replacing retirees.



Nobody is suggesting anything of the sort. It's part of the Treaty, hence the debate over if we actually will need it.

Really?
http://www.irishtimes.com/newspaper/finance/2012/0421/1224315008600.html

“On the positive side ... programme targets are being met, policy implementation on all fronts has been very good, reviews have been completed on time and you see this in the spreads that Ireland has relative to the spreads of the other programme countries.”
However, he said the burden of household debt, declining house prices and uncertainty about Ireland’s future were contributing to a continued lack of domestic demand, which posed risks.
“If we did have a scenario where domestic demand did not pick up, and there were external shocks and that constrained export growth, and let’s say growth got stuck at around a half per cent, you would not then have debt stabilising; it would continue to go up,” he said. “So the basic point ... is that risks are high. It all comes back to growth.”
Mr Chopra mentioned several times in his presentation that Ireland’s problem was fundamentally a banking crisis, which was caused by a “bloated financial system”, unlike Greece and Portugal, where irresponsible fiscal policies had resulted in unsustainable debt levels.

It seems to me that Mr Chopra is concerned about growth/debt stability.
Given that our growth rate is as follows, I think we have reason for concern:

http://www.tradingeconomics.com/ireland/gdp-growth

K-9 wrote: »

If we need another bailout the clauses don't apply to us..

I never said they did.

K-9 wrote: »

There is nothing particularly wrong with the measures, it's how you achieve them that is the problem, as we found out..

There may be nothing wrong with the measures during a period of growth. However, no Country has yet succeeded in cutting it's way out of recession. Yet our European friends seem to think we can achieve precisely that. Meanwhile our SMEs continue to fail, thus increasing unemployment, reducing PAYE income, and increasing social welfare spending.
So how much longer can we hold out before spiralling into depression?

K-9 wrote: »

Poor Enda does get mixed up. Depending on the audience it isn't our fault and is!

Hmm. i can think of several words to describe Enda in this scenario. "Poor" isn't one of them!:D

Justice for the individual

Scofflaw wrote: »

Nothing happened with Lisbon 1, which was a No.

cordially,
Scofflaw

Very good, good answer.

When we voted yes to Lisbon 2, how did we do - not very well. where are the jobs that were promised? Nothing happened with it either! Instead we got 400,000 unemployed. Ah sure, we may as well vote yes to more austerity, we Irish are getting used to hardship by now.

K-9

Noreen1 wrote: »

Really?
http://www.irishtimes.com/newspaper/finance/2012/0421/1224315008600.html

It seems to me that Mr Chopra is concerned about growth/debt stability.
Given that our growth rate is as follows, I think we have reason for concern:

http://www.tradingeconomics.com/ireland/gdp-growth

Looking back there I think we are getting our wires crossed. I was talking more about the actual Treaty and also the FF plan (before the bailout) which became the basis for the Irish loans.

Tbh, what he is saying there would apply here even if the IMF/EU weren't here. Exports are a big driver of growth for the economy, the problem is they don't generate as many jobs as they used to. I do note that in their latest review they have mentioned that employment will be a major target now. We were always going to struggle over the last few years with such a crash.

Construction accounted for about 20% of the economy, 3/4% now and that was always going to be hard to replace and effect us internally far more, you can't export houses after all!

There may be nothing wrong with the measures during a period of growth. However, no Country has yet succeeded in cutting it's way out of recession. Yet our European friends seem to think we can achieve precisely that. Meanwhile our SMEs continue to fail, thus increasing unemployment, reducing PAYE income, and increasing social welfare spending.
So how much longer can we hold out before spiralling into depression?

Was there much alternative though? Construction, retail and the motor trade have seen the biggest hits as regards employment, trying to fill that void left by an artificial credit
bubble is a tough task.

Scofflaw

Justice for the individual wrote:

When we voted yes to Lisbon 2, how did we do - not very well. where are the jobs that were promised? Nothing happened with it either! Instead we got 400,000 unemployed. Ah sure, we may as well vote yes to more austerity, we Irish are getting used to hardship by now.

Yes, Lisbon totally collapsed our property bubble and the construction sector. Oh no, wait, that had already happened.

Noreen1 wrote:

There may be nothing wrong with the measures during a period of growth. However, no Country has yet succeeded in cutting it's way out of recession. Yet our European friends seem to think we can achieve precisely that. Meanwhile our SMEs continue to fail, thus increasing unemployment, reducing PAYE income, and increasing social welfare spending.
So how much longer can we hold out before spiralling into depression?

There's a big logical hole in this. We have a huge government deficit, which results from the 1997-2007 governments balancing our tax take on the property bubble, and helping balance our economy on the same, to the extent that 20-30% of all Irish employment and 22% of GDP was estimated as being construction-related.

As a result of the collapse of the property bubble, we've had a massive fall in tax take, a huge number of business failures, and a resulting enormous rise in unemployment and social welfare payments.

Between that huge and widening hole and the government's decision to take on the debts of a banking sector whose balance sheets were three and a half times GDP, the bond markets decided our public debt was a risky proposition - we lost access to the markets, unsurprisingly, just after the government bank guarantee expired and the September 2010 "wall of debt" repayment of massive bank debts.

So austerity is not something anyone else is imposing on us, but is the result of the position we got ourselves into. Keeping going with the deficit as it was isn't an option, let alone widening it with some kind of huge stimulus programme, because nobody will lend us the money to do either of those things. And the reason nobody will lend us the money to do those things is because it's patently obvious that lending us that money is just a way of losing your money.

Think about a stimulus package for a moment, and think about that 20% of employment and 22% of GDP that came from construction - the latter of which has fallen to about 5-6%, producing most of the fall in our GDP over the last couple of years.

What stimulus package will turn that round in any sustainable way? We pour the money in, loads of ex-brickies and chippies get retrained as "knowledge workers"...and what, exactly? The jobs just spring up? Companies mushroom out of nowhere, because the only thing holding them back was a lack of ex-construction workers retrained in keyboard-bashing and Java programming?

I don't think so. I think "stimulus" here is just code for borrow heavily to pour money through the economy and down the drain to produce make-work jobs that last as long as the funding flows. And in a couple of years, when the money has all been spent, we'll be just as screwed but a lot more broke.

And that's before we get onto the fact that a stimulus package is, first and foremost, going to stimulate every gombeen politician in the country into a bout of hyperactivity to ensure that his mates and supporters get a slice of the stimulus pie. Kerry would re-elect John O'Donoghue just to make sure they got their share. And our record for malinvestment in the Celtic Tiger is extraordinarily impressive, so the biggest likelihood here is that what will most likely be done with the stimulus is re-inflate the property bubble! In fact, I often think that's what people really want.

Luckily, nobody will lend us the money to give the world such a spectacular demonstration of pissing money into sand - and I don't think anyone would do it like us. So instead we have to structurally reform the economy, and only pay for the stimulus measures we can afford, and bit by painful bit claw our way back to having a competitive economy that actually does something other than sell houses to itself at ever-increasing prices and in ever-increasing numbers until the whole thing goes pop and we have to go crying back to Mammy for more money, resenting her like billy-ho when she'll only fork out on condition we don't blow it all on bricks and mortar again.

We have austerity, we have unemployment, we have business failures, not as a result of anyone dictating these things to us, but because of the incredible mess we made of our post-euro boom, in allowing the construction sector to grow to epically unbalanced proportions. Nobody being willing to lend to us so that we can throw more money down the property hole isn't an imposition, but just common sense on their part, because they'd never see the money again - and neither would we, except in the form of an even larger bill than we're already faced with.

Reform first, then stimulus - when we can afford it.

cordially,
Scofflaw

thebaz

if people want some form of economic recovery there is no alternative to a Yes vote - a No vote would keep the country in recession for much longer

Noreen1

K-9 wrote: »

Looking back there I think we are getting our wires crossed. I was talking more about the actual Treaty and also the FF plan (before the bailout) which became the basis for the Irish loans.

Tbh, what he is saying there would apply here even if the IMF/EU weren't here. Exports are a big driver of growth for the economy, the problem is they don't generate as many jobs as they used to. I do note that in their latest review they have mentioned that employment will be a major target now. We were always going to struggle over the last few years with such a crash.

Construction accounted for about 20% of the economy, 3/4% now and that was always going to be hard to replace and effect us internally far more, you can't export houses after all!



Was there much alternative though? Construction, retail and the motor trade have seen the biggest hits as regards employment, trying to fill that void left by an artificial credit
bubble is a tough task.

Fair points.
However - if we ever get to a point where we've balanced our economy (and based on our current growth figures, that remains a very big if) - then we will need a growth stimulus.
That may be renewable energy/more exports/bio-medical etc./Gas/Oil or prefereably,a combination of the above, or others, to spread the risk portfolio (just not another housing bubble/ponzi scheme, for the love of God!:D)- but the key point is, it will not happen alone.
At that point, we could conceivably invest borrowed money, as a nation, if the return on investment was at an acceptable level.
If, on the other hand, we commit to limiting the amount we can borrow, then we are surely limiting our options. That is not wise, imo.

Scofflaw wrote: »

There's a big logical hole in this. We have a huge government deficit, which results from the 1997-2007 governments balancing our tax take on the property bubble, and helping balance our economy on the same, to the extent that 20-30% of all Irish employment and 22% of GDP was estimated as being construction-related.

As a result of the collapse of the property bubble, we've had a massive fall in tax take, a huge number of business failures, and a resulting enormous rise in unemployment and social welfare payments.

Between that huge and widening hole and the government's decision to take on the debts of a banking sector whose balance sheets were three and a half times GDP, the bond markets decided our public debt was a risky proposition - we lost access to the markets, unsurprisingly, just after the government bank guarantee expired and the September 2010 "wall of debt" repayment of massive bank debts.

So austerity is not something anyone else is imposing on us, but is the result of the position we got ourselves into. Keeping going with the deficit as it was isn't an option, let alone widening it with some kind of huge stimulus programme, because nobody will lend us the money to do either of those things. And the reason nobody will lend us the money to do those things is because it's patently obvious that lending us that money is just a way of losing your money.

Think about a stimulus package for a moment, and think about that 20% of employment and 22% of GDP that came from construction - the latter of which has fallen to about 5-6%, producing most of the fall in our GDP over the last couple of years.

What stimulus package will turn that round in any sustainable way? We pour the money in, loads of ex-brickies and chippies get retrained as "knowledge workers"...and what, exactly? The jobs just spring up? Companies mushroom out of nowhere, because the only thing holding them back was a lack of ex-construction workers retrained in keyboard-bashing and Java programming?

I don't think so. I think "stimulus" here is just code for borrow heavily to pour money through the economy and down the drain to produce make-work jobs that last as long as the funding flows. And in a couple of years, when the money has all been spent, we'll be just as screwed but a lot more broke.

And that's before we get onto the fact that a stimulus package is, first and foremost, going to stimulate every gombeen politician in the country into a bout of hyperactivity to ensure that his mates and supporters get a slice of the stimulus pie. Kerry would re-elect John O'Donoghue just to make sure they got their share. And our record for malinvestment in the Celtic Tiger is extraordinarily impressive, so the biggest likelihood here is that what will most likely be done with the stimulus is re-inflate the property bubble! In fact, I often think that's what people really want.

Luckily, nobody will lend us the money to give the world such a spectacular demonstration of pissing money into sand - and I don't think anyone would do it like us. So instead we have to structurally reform the economy, and only pay for the stimulus measures we can afford, and bit by painful bit claw our way back to having a competitive economy that actually does something other than sell houses to itself at ever-increasing prices and in ever-increasing numbers until the whole thing goes pop and we have to go crying back to Mammy for more money, resenting her like billy-ho when she'll only fork out on condition we don't blow it all on bricks and mortar again.

We have austerity, we have unemployment, we have business failures, not as a result of anyone dictating these things to us, but because of the incredible mess we made of our post-euro boom, in allowing the construction sector to grow to epically unbalanced proportions. Nobody being willing to lend to us so that we can throw more money down the property hole isn't an imposition, but just common sense on their part, because they'd never see the money again - and neither would we, except in the form of an even larger bill than we're already faced with.

Reform first, then stimulus - when we can afford it.

cordially,
Scofflaw

Eh???

Believe me, I never want to see another property bubble.
I was one of the ones who predicted a bad ending, and, unfortunately, I was proved right.

I have said that there will be austerity, one way or another.
That is entirely unavoidable.

However, if we can manage to balance the budget, without spiraling into depression, then we do actually have resources that could well prove viable for investment. (Renewable energy, exploration licences don't last forever, the agri sector (if China haven't outperformed us by then), bio-medical etc.
The more sectors we can invest in, the lower the risk - assuming we ever get feasibility studies done by acknowledged, competent, ethical Companies, rather than someones wifes' second cousin, or whatever.
These kind of changes, however, are within our capabilities as a Nation.
We just require adequate legislature - and adequate enforcement of same - by our own legislature. We do actually have some very competent and ethical Management consultants, Barristers etc.
We should be using them, instead of Political appointments (many of unqualified people) to Boards of Management etc.
We have the available skills - we just need to prise the Governments control away from that skillset, and let it flourish.


However, if we limit the amount we can borrow to 0.5% of GDP, then I fear that we will be unable to raise the funds necessary for investment - and to what end?
To appease Frau Merkel? To continue with a head in the sand "This the only way forward, because Europe says so!" mindset?

What we will need to get out of this mess is thinking outside of the box - not locking ourselves into a bigger box.

I'm in favour of balanced budgets, overall - but I'm also in favour of having enough autonomy to do what's best for OUR Country - not what some faceless, unelected bureaucrat decides, from afar.

Fenian Army

http://namawinelake.wordpress.com/2012/04/29/the-fiscal-compact-referendum-on-31st-may-2012-the-position-advocated-on-here/

comeback_kid

thebaz wrote: »

if people want some form of economic recovery there is no alternative to a Yes vote - a No vote would keep the country in recession for much longer

why do you see economic recovery so tied up with a YES vote ?

steve9859

thebaz wrote: »

if people want some form of economic recovery there is no alternative to a Yes vote - a No vote would keep the country in recession for much longer

Why?

K-9

Noreen1 wrote: »

Fair points.
However - if we ever get to a point where we've balanced our economy (and based on our current growth figures, that remains a very big if) - then we will need a growth stimulus.
That may be renewable energy/more exports/bio-medical etc./Gas/Oil or prefereably,a combination of the above, or others, to spread the risk portfolio (just not another housing bubble/ponzi scheme, for the love of God!:D)- but the key point is, it will not happen alone.
At that point, we could conceivably invest borrowed money, as a nation, if the return on investment was at an acceptable level.
If, on the other hand, we commit to limiting the amount we can borrow, then we are surely limiting our options. That is not wise, imo.

Well we can always hope.

Just on the Treaty, it would have affected us in 08/09 when we went over the 60% debt limit. Could have meant no further bank bail outs?

hmmm

Noreen1 wrote: »

However, if we limit the amount we can borrow to 0.5% of GDP, then I fear that we will be unable to raise the funds necessary for investment - and to what end?
To appease Frau Merkel? To continue with a head in the sand "This the only way forward, because Europe says so!" mindset?

The Irish Government has borrowed about 120 billion so far. Most of that borrowing has been spent on day to day expenditure, social welfare, public sector salaries etc.

Are you trying to argue that it is a good thing that we have allowed governments run up that size of debt? What "investment" have we got out of it?

Noreen1

K-9 wrote: »

Well we can always hope.

Just on the Treaty, it would have affected us in 08/09 when we went over the 60% debt limit. Could have meant no further bank bail outs?

Was never going to happen, unfortunately. Once Geithner vetoed any bondholders being burned, the troika adopted that particular mantra with a zeal that is/was interesting, to say the least.

hmmm wrote: »

The Irish Government has borrowed about 120 billion so far. Most of that borrowing has been spent on day to day expenditure, social welfare, public sector salaries etc.

Are you trying to argue that it is a good thing that we have allowed governments run up that size of debt? What "investment" have we got out of it?

Where on earth did I even hint at that?

I said we have to balance the budget.
Current spending does not equal investment, on which one would expect a return.
However, if we do manage to balance the budget, we would be very foolish to sign up to an agreement that limits our ability to achieve a genuine return on investment (ROI).
We will not be in a position, as a Country, to embark on any significant investment, without borrowing money.
So what should we do? The only other option to get people back to work that I can see is to hand over our resources to foreign Companies.(Complete with low tax rates!)

We need to be able to profit from our own resources. That's obvious.

Scofflaw

Noreen1 wrote: »

Was never going to happen, unfortunately. Once Geithner vetoed any bondholders being burned, the troika adopted that particular mantra with a zeal that is/was interesting, to say the least.


Where on earth did I even hint at that?

I said we have to balance the budget.
Current spending does not equal investment, on which one would expect a return.
However, if we do manage to balance the budget, we would be very foolish to sign up to an agreement that limits our ability to achieve a genuine return on investment (ROI).
We will not be in a position, as a Country, to embark on any significant investment, without borrowing money.
So what should we do? The only other option to get people back to work that I can see is to hand over our resources to foreign Companies.(Complete with low tax rates!)

We need to be able to profit from our own resources. That's obvious.

There's, again, an element of confusion here. We can run a budget deficit of up to 3%, not 0.5%. That latter isn't a budget deficit but a "structural deficit" - and while that's a term that hardly very well tied down, the basic idea behind it is simple enough. It's the deficit net of extraordinary measures.

So if we run a deficit over 0.5% because we're borrowing to pay day to day government expenditure, that's a problem, because such persistent borrowing is 'structural'. Borrowing to fund a stimulus, on the other hand, isn't structural, but once off - well, unless we're going to do it every year, of course.

And deficits, for the purpose of the Treaty limits, are averaged over three years, so there is some room to borrow for a stimulus, but only once you can, in general terms, afford to do so.

It's quite important to read the detail of the Treaty, because what looks like a very hard and fast limit is a good deal more nuanced. Possibly, indeed, too nuanced.

I agree with you, by the way, about what can be done in terms of investment, but what kind of investment are you thinking of which requires quite such massive borrowing? And is it the 60% debt/GDP limit you're thinking of, rather than the deficit limit? Because apart from the new "structural deficit" limit, we're already signed up to those limits, and have been for 20 years.

cordially,
Scofflaw

thebaz

comeback_kid wrote: »

why do you see economic recovery so tied up with a YES vote ?

if there is a NO vote is it going to make it easier for the country to borrow money on favourable terms ?

The answer is No , we will be viewed as wanting it both ways - the reality is we need to borrow money , to pay for social welfare , hospitals, public sevices - do you think a No vote will make it easier to borrow money ??

K-9

Noreen1 wrote: »

Was never going to happen, unfortunately. Once Geithner vetoed any bondholders being burned, the troika adopted that particular mantra with a zeal that is/was interesting, to say the least.

But I am looking forward here, you are looking back.

k.p.h

The 20 billion spending that had to be cut, dose anyone know where we stand now.? How much more to be cut..? Also what % of our GDP do we currently borrow.?

steve9859

thebaz wrote: »

if there is a NO vote is it going to make it easier for the country to borrow money on favourable terms ?

The answer is No , we will be viewed as wanting it both ways - the reality is we need to borrow money , to pay for social welfare , hospitals, public sevices - do you think a No vote will make it easier to borrow money ??

I dont think it will make it particularly harder, no. That is scaremongering of the yes side.

And what we give away on control of pretty much everything from corporation taxes to eployment law, in the aim of "pan-European economic integration" (see article 9) makes it too high a price IMO

dvpower

steve9859 wrote: »

I dont think it will make it particularly harder, no. That is scaremongering of the yes side.

And what we give away on control of pretty much everything from corporation taxes to eployment law, in the aim of "pan-European economic integration" (see article 9) makes it too high a price IMO

In the same post where you deride scaremongering, you scaremonger about our control of Corporation Tax.:mad: