Wednesday, 30 May 2012

The Fiscal Treaty - vote "yes" or "no"?

"If we vote 'no' to this treaty, we're fucked.  Or even more fucked than we already are".

My local tyre dealer.

I suppose some people might say "what do you expect such a capitalist pig to say anyway?",  but when you see someone operating a viable business in a cut-throat industry for many years, you wonder if he hasn't got a very good reason for keeping his eye on the ball. 

What bothers me about the "no" side is their dishonesty.  A couple of examples:


Excuse me for asking, but who the hell are we to "demand" anything?  The country was bankrupted by the previous government, in cahoots with the Central Bank and an eager new Irish landlord class who swarmed like flies around ordure at every apartment launch in the country.

After we joined the eurozone McCreevy - who was hailed as a genius by the likes of Kevin Myers, then writing in The Irish Times - slashed capital gains tax from 40% to 20%.   The Irish Government continued to use property tax incentives to enable the building of apartment blocks that nobody would ever want to live in, in godforsaken kips all over the country.


Will voting "no" to the treaty end austerity?  No.  We will not be able to access European Stability Mechanism funds if we do so.  That means we will be reliant on the IMF.  The result can only be increased taxes or public service cuts.   And don't mind the Shinners saying we can default - they are only looking to get into coalition with FF in the next election, and will say anything to get a vote.  Until they get into power, of course.

So where is the blog on the Fiscal Treaty? 

Well, I can see why people want to give the government a bloody nose.  Then I can see the other cliche about dismembered noses and spited faces.  It would be nice to see the bollocks we all know and intensely dislike, Phil Hogan, reined back with his raft of not-so-stealthy stealth taxes for fear of upsetting the electorate until he can get a "yes" vote in a second, tweaked election, but will that happen?   Kenny has said it won't, but that means nothing, I suppose. 

But let's get back to the issue. Don't kid yourselves.  This is not about septic tanks, household charges and all the rest.  It is about making legal the fiscal parameters (which have been agreed) which eurozone countries must observe in order to preserve the currency in our pockets

The problem is it does not go far enough.  What is needed is closer fiscal and political union across the eurozone.   We need a proper eurozone, with tax harmonisation (no VRT, no allowing multinationals - and U2 - to dodge taxes) and the same conditions and rules for every member state.  Then we can have eurobonds, and stop the speculators targeting peripheral eurozone states on the markets.

That needs to happen.  Whether voting "yes" or "no" will hinder or help, I do not know with 100% certainty.  But it would be nice if people did actually vote on the issue in question, rather than heeding those who are being the  most disingenuous.

Will it be a "yes" or a "no" vote? 

It will be a  "no", I can see it.  

Let's see where that leaves us, and remember when the next election comes around.

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Dakota said...

Exactly GM, AUSTERITY is already here. It's a fact. Oireland has already signed up for the terms and conditions in Dec last year, this vote tomorrow is just the topping on the cake. Hot air, either way, a bit of theatrical mould. THE GAME NOW IS AND SHOULD BE GROWTH, AND NOT ADDITIONAL TAXATION AND CUTS MID DEPRESSION.

Eh, also hate to break the bad news and LABOUR the POINT, but the sad politicos, they - the Irish people - voted in, has already done the opposite to whatever they ALREADY PROMISED, and enacted AUSTERITY measures ALREADY (that double A word again, see a pattern?) and plan additional measures in the years to come, EITHER way. OK, at this time is a NO vote going to solve the Irish peoples impotence. Eh, NO. To late. If you want to protest then do it at the next general or local elections, when the political landscape maybe more stable. Otherwise you're going to spook the markets and cause additional bother.

Ah GM, lets be kind though, to them, (the incompetent politicos, that is) in their favour, they now seem to have read some EU literature on GROWTH and may enact some of their measures. (God Bless the EU, as Irish Politicians would be looking into the Pig Sty mud for runic inspiration otherwise) A complete disaster of a Political Class but the Irish Public did vote them in and kept STUM when they broke all their promises, one by one.

Reality Check: Individuals must be damn sure that a NO will have a back up plan. DO THEY? REALLY? Some of them say DEFAULT, Some of them say, we'll get the money from OTHER SOURCES? WHAT SOURCES EXACTLY? If the country is TECHNICALLY OUT OF THE ESM? German Banks are not Irish, they have learned their lessons and would rather run a Marathon backwards than to lend to Ireland if it's outside official European Fiscal and Financial sources.

By the way, if Ireland Defaults I genuinely hope everyone has a reliable rowing boat on this Island. As that's the only way they'll be able to get off this rock. Oh and to say it again, start praying to whatever entity or belief system you happen to favour, that GREECE SEES SENSE and votes for REFORM and the INEVITABLE AUSTERITY (If they are anything like the IRISH then the IRISH ARE FLUMMOXED. How IRONIC IS THAT?) Maybe the Greeks understand the CRAIC afterall?

Anonymous said...

Ratifying this treaty will ratify the idea that governments are subservient to the finance industry. Large commercial banks, pension funds, bond traders, investment banks, insurance outfits, and major corporations (what we call, collectively, "the Markets") will be calling the shots economically, without challenge, and governments will follow.

This means that it makes no difference how people in this or that country vote on economic matters; the Markets will have the final say. And that means that the democratic process will be thwarted.

This treaty will be the triumph of the finance industry over government in Europe. In terms of European democracy, it is a suicide pact.

Here in Ireland, if we ratify the treaty, this referendum will be the last meaningful vote we will ever cast in economic matters.

Locke and Mill were right: there is no democracy without economic self determination.

SF is right for the wrong reasons. They're only trying to deceive voters into voting against their interests for their own benefit, like all the rest. So why the special hate? We shouldn't reject the treaty merely because that would give pleasure to SF. And might even make them look legit, quelle horreur. And yes, that parasite Adams will literally crow about how this illustrates the many ways in which SF is aligned with the will and wisdom of the Oirish People, and I will have to suppress the urge to rip out my eyeballs.

In economic terms, I don't believe we can be any more fucked than we already are. Austerity is coming either way. The *real* terrors spawned by Irish corruption, short-sighted greed, stupidity, and unbridled self-interest are coming for us soon enough, and I doubt that the treaty will have any effect on that, whichever way we vote.

Ideally, the euro should be wound down in an orderly fashion, since it is essentially an anti-democratic instrument, taking control of fiscal and monetary policy from governments. Without the euro, we will have a central national bank regulated by our own government which can set monetary policy (perhaps even wisely in an alternate universe) and let us devalue our way out of some of this intolerable debt burden.

85 billion euros, and for nothing. We'd have done more good if we'd simply dropped the bank notes from helicopters.

We *are* going to default. We cannot avoid it. We could liquidate the whole island and it wouldn't be worth that. Why give up what little sham of democracy we have left, when the outcome is going to be the same?


The Gombeen Man said...

@ Dakota.

"Some of them say, we'll get the money from OTHER SOURCES? WHAT SOURCES EXACTLY?" This one area where I feel the "no" side are being a bit dishonest. We can't go back to the bond markets as the current rate is still a prohibitive 8.2%... though it was as high as 14% in July. It is still a higher rate for borrowing money than the ECB. Governemt expenditure is higher than the country's income, so if we rule out access to the EMS, what will happen? I really think people need to think about that.

@ thomas. I think the euro can work thomas, if they make the changes necessary to make it work. It's like they never thought it through in the first place, or maybe they knew a crisis would precipitate major structural changes that might not have been countenanced in advance?

I'll nail my colours to the mast here. I am a supporter of the EU - at least in a general sense of principle. I can't help but feel that many of the "no" camp are just anti-EU full stop, and I accept that I can sometimes let my dislike of narrow nationalists like the Shinners let my emotions rule my mind! Mind you, Fianna Fail are in the "yes" camp and I hate that shower too.

The idea for the EU came from the ashes of WW2, and one of its aims was to make another war in Europe an impossibility. Also, I like the idea of anything that diminishes nation-state nationalism. I agree we have to make the EU more democratic, more accountable and all the rest.

I think we also have to make the euro work. It is just a currency after all, and even if Ireland went back to the Punt - natural forces forbid - we would still not be immune to the markets. A small, broke country on the peripery of Europe, with it's own currency - though tied to Sterling to some extent - I don't think it's a good idea. I honestly don't.

Sure, they could devalue and all the rest, which would make exports cheaper. That would be nice for the business class (and the multis if they still wanted to operate in a country outside the euro), but I don't think it would be good for you and me.

Imports would be more expensive and our money would be worth less than those in other EU countries. That would be a bummer when buying imported goods, or going on holiday, but even worse if we wanted to sell up and get out of the kip!

I'll have to agree to differ with you here, my man. I think the EU have to bite the bullet, and offer the fiscally troubled countries (though I do believe Greece is a lost cause) some kind of debt write off in exchange for closer political and fiscal union. Then we can have eurobonds and end the ridiculous situation where the markets are targeting different nations who share the same currency.

I think that is what will happen, eventually. But it needs to happen sooner than later in my view.

Dakota said...

Hi Thomas, I agree with a lot of what you say, but..."Why give up what little sham of democracy we have left." Thomas, the people on this Island gave up on it many years ago. Democracy was always a SHAM here. Was there ever real Democracy in Ireland? Mob Rule in one guise or other. One of the fundamental reasons why Ireland could not negotiate it's way out of a paper bag. What you get is what you see.

"Without the euro, we will have a central national bank regulated by our own government which can set monetary policy." Thomas, they couldn't regulate the opening of a packet of biscuits. Yes the Euro is flawed, the EU project is also flawed and the debt burden is and will be too much for such a tiny vulnerable and open economy. But default is not the answer. It would destroy any chance of recovery indefinitely. The country would descend into financial and societal chaos. A run on the Banks would be the least of anyones worries. In comparison to the inadequate and somewhat disfunctional EZ and EU it is a parallel paradise in comparison to what Oireland really still is beneath the surface.

If Ireland is to get out of this mess, it will only come about by an acceptance of inflationary policies, Growth, timed right, Centrally controlled QE and a large chunk of debt right down, accepted and acknowledged by not only the ECB but by European Banks, each of which have a lot to answer for.

Anonymous said...

GM, Dakota, I find it odd to be arguing with the two voices I most often agree with here. And I can't argue that Ireland is not the past, present and future Sick Man of Europe -- for all time, really. In 90 years, we have got exactly nothing right, ever. We need to be carried. Left to our own devices, we will do what we always do: fuck up every opportunity. We can never be taken seriously. We are a joke, a punch line. Always and forever. This, apparently, has been ordained by Almighty God, for reasons that I, a poor human, cannot comprehend. But it does appear to be the judgment of Heaven.

The euro zone, in its current form, is anti-democratic. It doesn't have to be, but it is. For it to work properly, we would need a government to which the financial industry answers, and in which every citizen of every eurozone state has a voice. What we have now is a polite plutocracy. It pretends not to be, and we pretend it is not, but that is what we have got. Interested parties (call them "bankers" collectively for convenience), who answer to no electorate, make economic decisions that elected governments must live with. That is not a democracy. That is a plutocracy, plain and simple.

That is why I voted no. For no other reason. Certainly not because I think Ireland will put its house in order (it could, of course; it simply won't). But this treaty will give final legitimacy to the European system of plutocracy. I won't be a part of that.

GM, I have always loved the idea of a truly integrated Europe. I still do. In the next century, it appears that the global centres of mass will be North America and East Asia. I want Europe to be a third centre of mass in global affairs. For Europe to be heard in the next century, she will have to speak with one voice; 27 competing voices will be ignored. Europe must unite to survive, or at least to live well, in the coming world.

It is only when you sit down and think about how we might get from here to there in practical terms that it appears impossible.

Right now, the rich states influence the major decisions. Basically France and Germany. They like this, and see no reason to change. Why should they? They are the golden geese. The European faith in the essential sacredness of money makes it inevitable that France and Germany will have disproportionate influence.

Think about what we would need for a real United States of Europe. A real central government and a single currency, but also a central bank regulated by that government. And real, universal legislative power distributed among all the states, with direct elections. It would have to be more or less the way the US federal government is structured, with a legislature and executive that answer to all European citizens. Any half measures, and we will simply switch to domination by the most populous states rather than the richest ones, which does not strike me as an improvement, or even much of a change. It would be absolutely crucial that the UK be part of this too.

How would we get there from here? I don't believe it's possible. Think about the practical issues. I would gladly sacrifice an arm to get there, but I believe that gesture would be in vain.


The Gombeen Man said...

@ thomas, Dakota.

Sure it would be very boring if we all agreed on everything all the time. Nothing wrong with constuctive argument. I think we are agreed on the main goal, but the "How would we get there from here?" is one hell of a stumbling block to overcome.

I can only hope the crisis will expediate some joined-up thinking Europe-wide that has hitherto been lacking. We'll see.

For the record, I didn't actually vote on this one myself... only moved house before Xmas and getting on the register would involve a trip to the local cop shop. A class of people I think best avoided...

So there's me contributing to what looks like a low turn-out.

Anonymous said...

A sad, sad day indeed. a very bad case of Stockholm syndrome to say the least. As the courageous people of Greece are finally getting around to kicking out their corrupt political class, the Spainish people are demonstrating regularly in their hundreds of thousands, Ireland gives a timely boost to the Banker owned EU. Understand that this treaty is not about fiscal discipline, it is about privatisation of profit making assets (financed by the financial sector), cut back of social spending, increasing taxes on the working and middle class, cutting pensions, weakening of labour laws.
It was even argued by the yes side that leaving the Euro would have an extremely detrimental effect on business in Ireland. The Euro is not in existence to help create employment. It exists primarily to benefit the financial sector with lower transaction costs. The "real boom" in Ireland was before the existence of the Euro. The Euro if anything was a major factor in the creation of the housing bubble, allowing the Irish banks to engage in reckless borrowing to push up the price of housing.
Also this idea that "if" Ireland defaults...Ireland will default, the problem with the continuation of the currently policies is that we are heading for an uncontrolled default. Continuing with the current policies is not an option, it is a disaster, other countries in Europe are waking up to this fact.
What a missed opportunity. The 1 country in the EU that is allowed a democratic vote gives a resounding Yes for the continued destruction of a "social" EU by the financial sector.
Sad day indeed...