The Fiscal Treaty Yes or No

OldNotWIse

The NO campaigners are, tbh, in my opinion, coming across as a little...desperate Sending people little booklets with cartoons depicting bank customers being held up at machine gun point? Come on :rolleyes: I know the message they are trying to get across but I'm not a big fan of shock tactics, and I find it insulting that they think they can win people over with scary cartoons. Are we not worthy of text and legal jargon?

Vita nova

Finnbar01 wrote: »

I'm voting no because:

1. We need to stop borrowing money.

Even if we don't add any additonal debt, we will still have to borrow, all countries do. We have existing debts (debt to GDP = 108%) owed to bondholders, these bonds have to be repayed when they reach maturity, e.g. after 2,3,9 10 years etc. Governments pay off the bondholders by issuing new bonds or rolling over debt. This doesn't increase the debt to GDP ratio but it does change the amount of interest we have to pay. If the market perceives we are a high risk we will have higher interest on new bonds or if the cost is too high (often >7%)we would require another bailout.

So by voting no we may end up paying higher interest on our existing debt (assuming we can borrow) which means we need to make even bigger cuts after a no than a yes, hence the irony of the vote no to austerity claims.

If we can't rollover debt or reduce borrowing then we need another bailout, but because we voted no we're not entitled to access the ESM fund, so we'd have to look elsewhere, and even if we do find anything it will definitely be more expensive than ESM funding

2. We need to balance our budget as soon as possible.

We need to balance our budget whether we vote yes or no. This treaty ensures that we put deficit rules and a correction mechanism into our national law so that in future we run balanced budgets:if we don't then OUR legal system kicks in and forces the government to implement a correction mechanism to restore stability.
Btw, the fine is not for exceeding deficit rules it's actually for not putting the deficit rules into national law and its adjudicated by the European court of Justice. Our own laws take care of ensuring our deficit compliance.

3. We need to get a deal on our bank debt

There are a lot of things we need but it doesn't necessarily mean we are going to get them. Under normal circumstances I don't believe a no makes a deal more likely than a yes, in the former, you're using blackmail and threats in the later you're using goodwill and negotiation. Greece has received some deals but I don't want Ireland to reach the sad state of affairs there before we could get a similar deal - I believe their bond rates are 30% (ours are ~7.5%).

If you vote Yes (IMO) you are just dragging out the economic 'pain' over a number of years.

There will be economic pain if we vote yes or no, as to whether a yes drags it out is a matter of opinion -as you indicate. However, voting no provides a less certain situation, and that's bad should we need to borrow or need a future bailout.
The buisness community has also indicated that the uncertainty caused by a no vote will impact negatively on their ability to attract investment (see SFA, Exporters Assoc, IBEC, Chambers Ireland).

merlante

OldNotWIse wrote: »

The NO campaigners are, tbh, in my opinion, coming across as a little...desperate Sending people little booklets with cartoons depicting bank customers being held up at machine gun point? Come on :rolleyes: I know the message they are trying to get across but I'm not a big fan of shock tactics, and I find it insulting that they think they can win people over with scary cartoons. Are we not worthy of text and legal jargon?

If the yes 'side' thought they could get people to vote yes with a dodgy cartoon, they'd plaster the country with them. Luckily, they have the apparatus of the state to provide a platform for them -- McKenna judgement or no, and the idea that they have a hot-line to Europe and that therefore, their threats are more credible than the 'no' threats (which hasn't been the case so far). They have the referendum committee in their back pocket, obviously staffed with 'right thinking' people. Given that, it is always a shock that the 'no' side (it's always 'no' to further integration, never 'yes' for maintaining sovereignty) ever even comes close to winning, let alone winning and forcing the goverment to subvert democracy further by holding referenda again.

The plebiscite in this country is a shambles. People are never allowed to vote on the content of the treaty as a people, nor are they ever encouraged to develop an opinion. Just threats from two camps of lunatics from day 1, with one crowd using the state to achieve their ends.

OldNotWIse

merlante wrote: »

If the yes 'side' thought they could get people to vote yes with a dodgy cartoon, they'd plaster the country with them. Luckily, they have the apparatus of the state to provide a platform for them -- McKenna judgement or no, and the idea that they have a hot-line to Europe and that therefore, their threats are more credible than the 'no' threats (which hasn't been the case so far). They have the referendum committee in their back pocket, obviously staffed with 'right thinking' people. Given that, it is always a shock that the 'no' side (it's always 'no' to further integration, never 'yes' for maintaining sovereignty) ever even comes close to winning, let alone winning and forcing the goverment to subvert democracy further by holding referenda again.

The plebiscite in this country is a shambles. People are never allowed to vote on the content of the treaty as a people, nor are they ever encouraged to develop an opinion. Just threats from two camps of lunatics from day 1, with one crowd using the state to achieve their ends.

Perhaps, but tbh, a first year marketing/business student would know this type of hysterical propaganda and comic book depictions of people dragging cart loads of fat bankers through the streets will not really hit a nerve with many people. It's like (though this is unrelated) this new campaign to bin your gum and they have all these jazzed up silhouettes depicted doing "groovy" moves to "bin their gum their way" or something stupid and condescending like that As if anyone is going to do a little jig and a reel on Abbey street before chucking their masticated hoof scrapings in the bin :rolleyes: Sorry, rant over.

I agree with you regarding the lack of neutral info. It seems to be just scare mongering from both sided. Do it or else, dont do it or else

cassette50

Finnbar01 wrote: »

I'm voting no because:

1. We need to stop borrowing money.
2. We need to balance our budget as soon as possible.
3. We need to get a deal on our bank debt


If you vote Yes (IMO) you are just dragging out the economic 'pain' over a number of years.

Pretty much sums up my reasons for voting no, plus simple logic dictates that if FF are in favour of it, the opposite must be the correct course.

sandin

If the fiscal treaty was in palce 6 years ago, FF would not have been able to buy the electorate with a spend spend spend budget and we would not be in as bad a position as we are currently in.

The fiscal treaty PROTECTS countries from getting into debt over what they can afford and also ensures those currently in debt get their books in order.
- In laymans terms, its called goofd housekeeping.
By signing up to this, we are assured of finance at a very low rate.

If we say no, we may still be able to access finance, but it won't be at the same low rate and we may be forced to give up the much trumpeted low corporation tax which is so beneficial to this country.

Bards

sandin wrote: »

If we say no, we may still be able to access finance, but it won't be at the same low rate and we may be forced to give up the much trumpeted low corporation tax which is so beneficial to this country.

I Reckon if we vote "Yes" and need an additional bailout from the ESM then the terms may be that we give up the low Corporate TAX

If we vote "NO" and need a 2nd bailout we may be able to get it from the IMF or other outside bodies. They will not be interested in getting rid of our low corporate tax as they know it will drive FDI away and will only make our problems worse.

AdMMM

But we've been told that in no circumstances by the Government that we'll need a Second Bailout.

Access to a second bailout is being touted as one of the main advantages to Ireland for ratifying it. However, why should we surrender control of our own fiscal matters to Europe for something that we're being told time and time again we won't need?

Or are our Government lying to us about the necessity for a second bailout?

merlante

AdMMM wrote: »

But we've been told that in no circumstances by the Government that we'll need a Second Bailout. Access to a second bailout is being touted as one of the main advantages to Ireland for ratifying it. Why should we surrender control of our own fiscal matters to Europe for something that we're being told time and time again we won't need?

Or are our Government lying to us about the necessity for a second bailout?

You see you're getting the rationale for previous government decisions (bailouts/austerity), i.e. because we'll get out of the 'programme' by 2013 (or whenever), mixed up with the rationale for current government decisions (yes on treaty), i.e. because we won't get out of the programme by 2013. The fact that those rationales conflict, but that we're supposed to kind of keep them both in our heads at the same time as 'good sense' is what Orwell called 'double think' in that prescient government manual, 1984.

The point is that whether we go it alone or throw our lot in with the big boys of Europe, we are going to lose big time, one way or the other, and it comes down to maintaining sovereignty and getting cold shoulders in Germany, or losing effective sovereignty but gaining access to EU subsidies indefinitely. FG/Lab are not comfortable governing in hard times and are happy to hand over the reigns to Brussels. Sad really. I look forward to hearing about the 'subsidies' we'll receive in return for harmonising corporation tax in about 3/4 years.

Vita nova

Bards wrote: »

I Reckon if we vote "Yes" and need an additional bailout from the ESM then the terms may be that we give up the low Corporate TAX

Where are you getting that from? It's highly unlikely, we haven't had to give up our low CTR for our current bailout and that's from predominately EU sources. Furthermore, a no vote is more likely to result in an increase in CTR, since if we can't get a bailout then the money will need to be found from other sources, one of which could be CT. Didn't the Socialist MEP Paul Murphy indicate as much in a radio interview?

This old chesnut of a yes vote endangering our low CTR was also brought up at every treaty referendum including Nice and Lisbon and it hasn't happened so far.

If we vote "NO" and need a 2nd bailout we may be able to get it from the IMF or other outside bodies.

We have already exceeded our IMF quota by 1000%, furthermore the IMF does not deal with EU countries individually, they work in collaboration with the EU bodies hence why we have the troika. It's worth noting that Christine Lagarde (head of the IMF) has said there are African countries in much more dire need of their assistance than the relatively well off EU countries.
When you say we'll get funding from "other outside bodies", that seems to indicate you don't know which or don't want to mention them

They will not be interested in getting rid of our low corporate tax as they know it will drive FDI away and will only make our problems worse.

I don't think anybody wants to make our situation worse and certainly not our EU partners.

Bards

We all know at the end of the day, if we vote NO, the establishment will ignore the vote and re-run the referendum again until they get the answer they want.

Finnbar01

Vita nova wrote: »

Even if we don't add any additonal debt, we will still have to borrow, all countries do. We have existing debts (debt to GDP = 108%) owed to bondholders, these bonds have to be repayed when they reach maturity, e.g. after 2,3,9 10 years etc. Governments pay off the bondholders by issuing new bonds or rolling over debt. This doesn't increase .....community has also indicated that the uncertainty caused by a no vote will impact negatively on their ability to attract investment (see SFA, Exporters Assoc, IBEC, Chambers Ireland).

A yes vote will exacerbate our problems.

We need to default, exit the eurozone and devalue.

wellboytoo

Finnbar01 wrote: »

A yes vote will exacerbate our problems.

We need to default, exit the eurozone and devalue.

Sher just default so, and I can assure you you won't have to devalue, it will be done for you.
Next day no social welfare, no unmarried mothers, no fuel vouchers, etc, what is your plan then?

Vita nova

AdMMM wrote: »

But we've been told that in no circumstances by the Government that we'll need a Second Bailout.

Access to a second bailout is being touted as one of the main advantages to Ireland for ratifying it. However, why should we surrender control of our own fiscal matters to Europe for something that we're being told time and time again we won't need?

Or are our Government lying to us about the necessity for a second bailout?

Whether they are lying or not doesn't really matter (obviously not speaking from a moral point of view). What's important for voters is that there's a strong possibility of needing a bailout either during this or future crises, in which case it would be nice to have access to cheap emergency funding (ESM). Think of it as insurance, you hope you won't need it but it's safer to have it.

Finnbar01

wellboytoo wrote: »

Sher just default so, and I can assure you you won't have to devalue, it will be done for you.
Next day no social welfare, no unmarried mothers, no fuel vouchers, etc, what is your plan then?

We will not lose social welfare, fuel vouchers etc. Granted they will be cuts, but the cuts will equate to 2000/2001 spending.

Look, we're going to default anyway. The sooner the better.

wellboytoo

[QUOTE=Finnbar01;78908203

Look, we're going to default anyway. The sooner the better.[/QUOTE]
Couldn't actually disagree with that.

merlante

wellboytoo wrote: »

Sher just default so, and I can assure you you won't have to devalue, it will be done for you.
Next day no social welfare, no unmarried mothers, no fuel vouchers, etc, what is your plan then?

Don't see how. Our exports are much larger than our imports so there'd be plenty of demand for our own currency, although we would of course devalue it to stimulate growth, as every other country has ever done in our situation. It's not beyond the bounds of possibility that we might then be able to pay back our inflated debts. If not, then we'd default, like every other country has ever done in this situation. Then we'd merely have to live within our means, which everyone is in favour of anyway. Any default situation would be resolved within a few years after the country has recovered. Nobody wants an EU country in a state of default for years.

It might be worth remembering that we had our own currency a decade or so ago, when we were a wealthy country. I seem to remember no problems with social welfare and so on. Funny that. If we had a real debate in this country then these issues would be well understood.

(And yes, there would be huge trouble and chaos for a period of time, but there's no free lunch in our situation.)

wellboytoo

merlante wrote: »

Don't see how. Our exports are much larger than our imports so there'd be plenty of demand for our own currency, although we would of course devalue it to stimulate growth, as every other country has ever done in our situation. It's not beyond the bounds of possibility that we might then be able to pay back our inflated debts. If not, then we'd default, like every other country has ever done in this situation. Then we'd merely have to live within our means, which everyone is in favour of anyway. Any default situation would be resolved within a few years after the country has recovered. Nobody wants an EU country in a state of default for years.

It might be worth remembering that we had our own currency a decade or so ago, when we were a wealthy country. I seem to remember no problems with social welfare and so on. Funny that. If we had a real debate in this country then these issues would be well understood.

(And yes, there would be huge trouble and chaos for a period of time, but there's no free lunch in our situation.)

Agree completely, but then we are back in Michael O Leary territory, we are running a 15 billion defecit at the moment, so we would have to cut 15billion from our current spending immediately by your reasoning, hence my comments about the social welfare etc, massive cuts in state wages etc.
I have no problem with what you are postulating but feel you should high light the negative of what you are proposing as well.
No gain without pain.

Hoffmans

Vita nova wrote: »

AdMMM wrote: »

But we've been told that in no circumstances by the Government that we'll need a Second Bailout.

Access to a second bailout is being touted as one of the main advantages to Ireland for ratifying it. However, why should we surrender control of our own fiscal matters to Europe for something that we're being told time and time again we won't need?

Or are our Government lying to us about the necessity for a second bailout?

Whether they are lying or not doesn't really matter (obviously not speaking from a moral point of view). What's important for voters is that there's a strong possibility of needing a bailout either during this or future crises, in which case it would be nice to have access to cheap emergency funding (ESM). Think of it as insurance, you hope you won't need it but it's safer to have it.

whats cheap about the esm, ireland are required to put 11more billion of iou's into it, its a complete farce like the fine gael eurocrat wannabes

Sully

AdMMM wrote: »

But we've been told that in no circumstances by the Government that we'll need a Second Bailout.

Access to a second bailout is being touted as one of the main advantages to Ireland for ratifying it. However, why should we surrender control of our own fiscal matters to Europe for something that we're being told time and time again we won't need?

Or are our Government lying to us about the necessity for a second bailout?

I personally think we will need one. I don't think any government is going to openly admit to it though, as I think it would be damaging. Regardless, however, for any future government - who says they wont need it? Nobody is 100% sure. Its best be safe, rather than sorry.

As an aside Adam, we already surrendered part control on our budgets. The EU wont be poking their nose in unless we go over spending.

Sully

Hoffmans wrote: »

whats cheap about the esm, ireland are required to put 11more billion of iou's into it, its a complete farce like the fine gael eurocrat wannabes

We are only required to do so in the event the full EMS is drawn down. We have already done similar to the previous bailout fund which "the fine gael eurocrat wannabes" were not part of.

Hoffmans

Sully wrote: »

Hoffmans wrote: »

whats cheap about the esm, ireland are required to put 11more billion of iou's into it, its a complete farce like the fine gael eurocrat wannabes

We are only required to do so in the event the full EMS is drawn down. We have already done similar to the previous bailout fund which "the fine gael eurocrat wannabes" were not part of.

True , but they have just continued down the same rocky road to ruin propping up the last bits of the celtic pyramid scheme, as the last brady bunch i have no doubt if they were in the position for the bank guarantee lark they would have done exactly same as ff

Sully

Hoffmans wrote: »

True , but they have just continued down the same rocky road to ruin propping up the last bits of the celtic pyramid scheme, as the last brady bunch i have no doubt if they were in the position for the bank guarantee lark they would have done exactly same as ff

What has that got to do with this treaty?

AdMMM

Sully wrote: »

I personally think we will need one. I don't think any government is going to openly admit to it though, as I think it would be damaging. Regardless, however, for any future government - who says they wont need it? Nobody is 100% sure. Its best be safe, rather than sorry.

As an aside Adam, we already surrendered part control on our budgets. The EU wont be poking their nose in unless we go over spending.

If you're in prison, would you rather cosy up with the Bears and let them **** you up the ass at any time for their pleasure, or rather have confidence in your own ability to get through it?

That's essentially what I see this referendum ass.

Vita nova

Hoffmans wrote: »

whats cheap about the esm, ireland are required to put 11more billion of iou's into it, its a complete farce like the fine gael eurocrat wannabes

The ESM fund is cheap because it allows us to get emergency funding at close to cost; 3% has been mentioned. Without access to this fund we can't be certain where we'll get funding; in a worst case scenario we would have to get it on the bondmarket, currently we would pay 7.5%. Greece for example would have to pay 30% interest.

...ireland are required to put 11more billion of iou's into it...

The ESM fund will have a capitalization of ~€500b, our commitment to that is €11b based on our GDP relative to others (Germany's commitment is €190b). We would only have to put in €11 should the full €500b be required for emergency funding. We have a cash commitment of €1.27b over 3 years to build up a reserve of ~€80b among members.
Any money we give as part of a bailout is in the form of a loan (as are all bailouts), and we will earn interest on it and get it back at some stage.
Given that we are likely to need access to this fund it makes sense to contribute to it, remember that the amounts we draw will likely be a multiple of our contributions.

To put things in perspective for our current bailout fund is €67.5b made up of contributions from the EFSM, EFSF, IMF, UK, Sweden, etc. That's due to run out in 2013 so it makes sense to put in place access to the ESM fund now.

its a complete farce like the fine gael eurocrat wannabes

I'm not a member or supporter of any political party.

Bards

And what happens to the 500,000,000,000 when Spain, Greece and Italy go belly up, there wont be enough money left in the piggy bank for us.

We are in the end game for the euro and the sooner we realise what's happening the better, unless at the little meeting last week they have decided that once Greece exits the euro then they will bring in euro bonds otherwise all bets are off.

In hindsight I think the government would have been better off postponing the referendum as there still won't be stability in the euro zone if we vote yes to the "stability" treaty, as there are still too many unknows to quantify

Cabaal

Finnbar01 wrote: »

A yes vote will exacerbate our problems.

We need to default, exit the eurozone and devalue.

Things will devalue by default if we default and leave the eurozone, they;'ll we'll be out in the big bad world with a currency worth **** all and a import market which is gone to ****e.

So in no time at all oil will go through the roof and so will every other import we have,

Now with all these higher costs (oil and the big knock on affects it has) we'll have a situation where the government can't keep up with the running costs for the country so at that stage it would make sense to cut the largest running cost by far...the social welfare bill.

(think of the country as a company, if you ran a company with such a high output cost you'd look to cut it too).

Now I suppose that the government could cut taxes on oil/petrol etc but then that creates an even bigger shortfall in the budget for the government and regardless of what party is in power they'll be a nice big shortfall and higher interest rates if we go out into the big bad world to seek a loan.

So now we have higher living costs and anyone on social welfare getting hit the hardest....now wasn't that all worth it?
:rolleyes:

How about you come up with a workable solution instead of some anarchists wet dream?

Boskowski

I haven't actually seen a single coherent argument from any 'No' poster either here or on the Politics forum. It's all expressed frustrations and side battles and stuff we have either no influence over or have nothing to do with the treaty and then about 75% ignorance.

Its all about the Europeans will do this and the Germans will do that and I believe X, Y & Z but not a single fact. Has anyone actually read the thing?

I mean don't get me wrong, I can understand all that frustration. I don't like bad bank debts either and I thought it was criminal what was done. And I'm also frustrated with the political alternatives in this country. I think they're all the same and nothing will ever change. I'm p!ssed off too, but come on. Give me one somewhat strong argument that is a little thought out and shows a little line I can follow. Just one please.

Bards

Boskowski wrote: »

I Give me one somewhat strong argument that is a little thought out and shows a little line I can follow. Just one please.

The Treaty has not yet been fully drafted (The growth Pact), we don't know the exact wording, what is and isn't going to be in the final draft - yet we are being asked to take a blind leap of faith and vote Yes

Surely this is a good enough reason to Vote NO

When, and only when Germany & France Ratify the treaty should we be asked to ratify it too

Max Powers

This article is a good read on the treaty:

Vote Yes to Brussels and end decades of Irish fiscal ineptitude

DAN O'BRIEN
ECONOMICS : TWO WEEKS ago this column explored the risks of voting No to the fiscal treaty. With the probability of Greece being ejected from the euro zone having risen considerably since, the risks for Ireland, and all weaker peripherals, have become much greater.
Lessening the many risks to national wellbeing is among the best reasons for backing the treaty next week.
But there are also straightforward gains. With little discussion in the debate of the benefits of the rules contained in the treaty, it is worth setting out why stronger budget rules and greater external oversight of budgetary policy should be embraced enthusiastically.
This State has a lamentably long record of appalling fiscal mismanagement. This is no accident. It is the result of a political system that is incapable of steering a large modern State in a fast-changing globalised world.
No parliament anywhere in democratic Europe is weaker than the Oireachtas - in both its lawmaking and holding-to-account functions.
The executive branch of government is as weak. It is peopled by part-time amateurs who are usually inexpert in their ministerial briefs, rarely pro-active and, more often than not, more interested in constituency affairs than effectively managing their departments.
With such a system it is little wonder fiscal policy is conducted on an If-I-have-it-I'll- spend-it basis. The decades-long history of fiscal ineptitude is deeply depressing. But it is essential to recount in order to demonstrate the need for greater checks and balances in how politicians manage the public finances.
In the late 1970s Fianna Fáil splurged. A Fine Gael-Labour coalition then squabbled and dithered. The upshot was that Ireland, by 1984, became the first OECD country to run up a central government debt in excess of 100 per cent of GDP. It was not until the mid-1990s that debt returned to safe levels.
One might have thought such an extended trauma would have engendered an ultra- cautiousness in all those with a hand on the public purse strings. But it didn't. Within an electoral cycle they were at it again.
In the two years leading up to the 2002 election, the FF-PD coalition embarked on an unprecedented pre-election spending binge. Nominal general government spending rose by almost 30 per cent between 2000 and 2002 - three times the euro area average. Ireland's headline budget balance underwent the largest deterioration of any euro area country at that time. When the European Commission raised concerns, it was told to shove off.
As luck would have it, the international downturn then was much shallower than that of the late 1970s and early 1980s. But had the slump turned to deep recession, deficits and debt would have run out of control.
That is exactly what happened in 2007-08. Although taking on bank debts has since made matters worse, the disaster is mostly fiscal in its origins (one quarter of outstanding public debt is attributable to bank costs).
The main reason for the current public debt crisis is much reduced tax revenues - something that was not just a risk during the boom times, but always likely to happen. The accompanying chart shows that by 2006 almost 18 per cent of revenues came from taxes on property market transactions alone (this does not include other revenues associated with the property frenzy, such as the income taxes and PRSI paid by 270,000 construction industry employees).
Even if there had been a soft landing, these revenues would have fallen sharply. A crash landing was guaranteed to vaporise them. Despite the fact that these revenues would not last and the considerable risk they would disappear completely, complacency and hubris among politicians and civil servants prevailed. Had there been a greater focus on the underlying fiscal position, these windfall revenues would have been treated as such. If that had happened, the situation now would be infinitely better.
The "structural deficit" rule contained in the fiscal treaty is designed to measure the underlying fiscal position. The ceiling of 0.5 per cent of GDP makes good sense and only deficit-spending addicts could portray it as unreasonably austere.
The treaty says the European Commission will measure the structural deficit. The Brussels bureaucrats may not always get it right, but they offer a better chance of protecting Irish citizens from those who have proven themselves incapable of even moderately prudent fiscal management