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

Mellio

Well I dont see the positives for the working man in this treaty but then again I dont see any other alternative as the money borrowed from EU/IMF still has to be paid back no matter what and anything else that is borrowed in the mean time.

These are the basic articles I have extracted from the stability.ie website, i hope its alright to put these up?

For me Article 1,3,4,5,7 and 8 are the most significant is they focus on improving budgetary discipline, mantain balanced budget with surplus, must not have debt bigger than 60% of GDP, Countries with excessive defecit will have to put in place a programme of econimic reform, being held to account and fined if countries dont meet there targets.

For this reason I am against as I beleive it just gives the EU and our governement a stronger hand in demanding more from the people when most are currently sailing quite close to there means as it stands.

I think if the governement were to gaurentee that in 5-10 years time we would be out of this mess and this is what we have to do people could make a better judgement of things but hiding behind policies and treaties is just a way of trying to hoodwink the people as most wont understand it.

• Article 1 states that the Treaty aims to strengthen economic and monetary union by adopting rules to improve budgetary discipline and to strengthen coordination of economic policies.

Article 2 makes it clear that the Treaty must comply with EU Treaties.

• Article 3 requires a Government to run a balanced budget or one that creates a surplus (ie, it generally cannot spend more than it raises in taxes). It sets out in technical terms how the rule is to be applied, and requires that it be included by each country in its national law.
• Article 4 states that a country must not have a debt bigger than 60% of what it produces in a year (its GDP). If it does, it must reduce its debt by one-twentieth of the excess each year. This is an existing EU rule.
• Article 5 states that a country with an excessive deficit (too large a gap between its income and spending) will have to put in place a programme of economic reform.
• Article 6 states that countries will share information on when they plan to issue debt (to sell bonds to raise money).
• Article 7 makes it easier to hold countries that break EU economic rules to account, as those bound by the Treaty agree to act together to support the EU Commission in this.
• Article 8 says that it will be possible for a country to be taken to the European Court of Justice if it doesn’t apply the rule of Article 3 in its national laws properly. If the Court finds against it, and it does not comply, the country might be fined.
• Article 9 contains an agreement to work together to ensure the proper functioning of the euro so as to promote employment and economic stability.
• Article 10 states that the countries participating are ready to work together in groups on particular issues where not everyone in the EU wants to move forward together (enhanced cooperation). This would be done case-by-case and within existing EU rules.
• Article 11 contains an agreement to share plans for major economic policy reforms with each other.
• Articles 12 and 13 contain arrangements to improve the working of the euro area, including an agreement for Prime Ministers to meet at least twice a year.
• Article 14 says that each country will ratify the Treaty according to its own requirements – in Ireland’s case a referendum. It will come into force once 12 euro area countries have ratified it. The target date for ratification is 1 January 2013.
• Article 15 provides that other EU countries can join in the future.
• Article 16 provides that steps will be taken to include this new Treaty in the EU Treaties no more than 5 years from when it comes into force.

Scofflaw

Good summary, Mellio - thanks!

cordially,
Scofflaw

Mellio

Scofflaw wrote: »

Good summary, Mellio - thanks!

cordially,
Scofflaw

No Problem at all.

hopefully from this people can see in a summarised version what is expected from the treaty and the people.

Manach

As per OP, I would actually like to vote Yes for the first time to an EU treaty (the treaty itself, to me seems a fairly good idea) but given the government's recent PR triumphs that are the home tax and water metering , I've moved to the undecided column.

FreudianSlippers

Manach wrote: »

As per OP, I would actually like to vote Yes for the first time to an EU treaty (the treaty itself, to me seems a fairly good idea) but given the government's recent PR triumphs that are the home tax and water metering , I've moved to the undecided column.

Shouldn't one vote on something based on its merits and not on some ocular or PR type scheming and plotting? I'm not a huge fan of the current government, but I can see that this is far over their heads in terms of importance to us as a country.

I don't really care if this government is praised undeservedly once we fix the problems.

SeanW

FreudianSlippers wrote: »

Source?

I was first alerted to the anti-democratic nature of the treaty by this video.

Then I actually read the damn thing. Text here. And it's even worse than that: Article 15 specifically enumerates the ESM with the responsibility of pushing loans onto countries GOVERNMENTS for the specific and sole purpose of "recapitalising" national banks. i.e. bailing them out at the expense of that country's people, and the governments of ESM contributors, instead of letting them go and prioritising the compensation of retail depositors which is what - even today - is still routinely done in the United States.

If the ESM is ever created I can an example situation like this happening, if not soon, definitely in the next 10 years or so.

1. A massive bubble forms in another small Eurozone country, e.g. Malta. The bubble is in property, tourism, Maltesers :rolleyes: etc. could be anything.
2. The bubble bursts, spectacularly and its banks are about to fall, the E.U. political class decides there's a risk of "contagion."
3. The Maltese government states that it does not have to resources to rescue its banks, and would not do so even if it did.
4. The ESM has an emergency meeting and decides to make credit available to Maltese gov't to recapitalise their banks.
5. The Maltese gov't comes under extreme political pressure from Brussels Eurocrats to borrow the money and "recapitalise" the banks.
6. The Maltese people are now stuck with a massive debt they didn't borrow and don't morally owe, and they're stuck with a decade of recession as they're now solely dependent a banking system full of zombie banks.

It's safe to say I don't think the ESM as proposed is a good idea and don't want any part of it.


By all means, if the Eurocrats come back with an ESM that is actually subject to oversight and the rule of law, and doesn't have a mandate to repeat the Irish bank-bailout fiasco, I would happily re-examine it. But as far as I am concerned, this particular version should be consigned to the rubbish-tip of history.

Scofflaw

SeanW wrote: »

I was first alerted to the anti-democratic nature of the treaty by this video.

Then I actually read the damn thing. Text here. And it's even worse than that: Article 15 specifically enumerates the ESM with the responsibility of pushing loans onto countries GOVERNMENTS for the specific and sole purpose of "recapitalising" national banks. i.e. bailing them out at the expense of that country's people, and the governments of ESM contributors, instead of letting them go and prioritising the compensation of retail depositors which is what - even today - is still routinely done in the United States.

If the ESM is ever created I can an example situation like this happening, if not soon, definitely in the next 10 years or so.

1. A massive bubble forms in another small Eurozone country, e.g. Malta. The bubble is in property, tourism, Maltesers :rolleyes: etc. could be anything.
2. The bubble bursts, spectacularly and its banks are about to fall, the E.U. political class decides there's a risk of "contagion."
3. The Maltese government states that it does not have to resources to rescue its banks, and would not do so even if it did.
4. The ESM has an emergency meeting and decides to make credit available to Maltese gov't to recapitalise their banks.
5. The Maltese gov't comes under extreme political pressure from Brussels Eurocrats to borrow the money and "recapitalise" the banks.
6. The Maltese people are now stuck with a massive debt they didn't borrow and don't morally owe, and they're stuck with a decade of recession as they're now solely dependent a banking system full of zombie banks.

It's safe to say I don't think the ESM as proposed is a good idea and don't want any part of it.


By all means, if the Eurocrats come back with an ESM that is actually subject to oversight and the rule of law, and doesn't have a mandate to repeat the Irish bank-bailout fiasco, I would happily re-examine it. But as far as I am concerned, this particular version should be consigned to the rubbish-tip of history.

Er, no. Making finance available to a government in order to recapitalise their banks is something the ESM is allowed to do, not required to do:

1. The Board of Governors may decide to grant financial assistance through loans to an ESM Member for the specific purpose of re-capitalising the financial institutions of that ESM Member.

And there is absolutely nothing in the rest of that article which suggests a reprise of how Ireland has dealt with its banks - something which has been the subject of quite a bit of criticism at the European level.

Nor is there any way for the ESM to make a country recapitalise its banks via the fund against the objections of that government as per your scenario, although it's true that in a situation where the country requires access to the ESM for other reasons there would be an obvious avenue for pressure. If, however, the country only requires ESM access on account of their banks, then access to ESM funding obviously cannot be used to pressure the country - they need only say "no, we're letting the banks fail", and that's basically that, because they don't need the ESM funding otherwise anyway.

Sure, if you subscribe to the conspiracy theory that everything that happens is controlled by banks/Goldman Sachs/Rothschilds/Illuminati, and that the ESM will be the agent of banks and their puppet governments, then your scenario "works". Otherwise, not so much - it's standard conspiracy theory stuff and political/legal nonsense as usual for such theories.

regards,
Scofflaw

liammur

So the Mandate union will encourage it's members to vote NO, maybe this will be closer than the 1/4 the bookies have on it atm after all.

4/9 for the Yes and 13/8 for the No.

SeanW

FreudianSlippers wrote: »

That doesn't make sense. Vote on what you're voting on.

The poster said specifically that he was disillusioned with the European Union. I suggested that a No vote would make this disillusionment more clear to policymakers than a spoiled vote.

If you want to vote no on the sister treaty then vote no on that.

Oh dear ... if only we could vote on the related, but far scarier, ESM treaty. There's just one problem: that decision is going to be made for us by our political class. The same people that approved ACTA and signed the Irish people up to taking on the gambling debts to Anglo.

If we could vote on both treaties I would vote Yes to the FST, because I believe in living within our means, and vote No to the ESM treaty, because I think it's taking Europe in the wrong direction, but that is not an option. Furthermore, there's probably nothing I can do to stop the ESM treaty or make my opposition to it count for anything.

I can only hope that by helping to derail the EST, making Ireland ineligable for ESM aid, might make it difficult for even our political class to justify the ratification of the ESM.

Er, no. Making finance available to a government in order to recapitalise their banks is something the ESM is allowed to do, not required to do:

True, but applying the correct political pressure to force countries to recapitalise their banks would be done by other branches of the Eurocracy.

And there is absolutely nothing in the rest of that article which suggests a reprise of how Ireland has dealt with its banks - something which has been the subject of quite a bit of criticism at the European level.

Source? (I'm not being smart here, I genuinely would like to know what criticisms were made, from where and by whom?)

Unknown Soldier

I'll be voting NO as I heard on the radio that there is a chance the new treaty could mean the end of the tracker mortgage.

beeftotheheels

Unknown Soldier wrote: »

I'll be voting NO as I heard on the radio that there is a chance the new treaty could mean the end of the tracker mortgage.

I'm sorry to ask but is this post genuine or did you miss the sarcasm smilie?

Scofflaw

SeanW wrote: »

The poster said specifically that he was disillusioned with the European Union. I suggested that a No vote would make this disillusionment more clear to policymakers than a spoiled vote.

Were it not, of course, for the confounding effect of those who are going to vote in the treaty referendum on the basis of household charges...

SeanW wrote: »

Oh dear ... if only we could vote on the related, but far scarier, ESM treaty. There's just one problem: that decision is going to be made for us by our political class. The same people that approved ACTA and signed the Irish people up to taking on the gambling debts to Anglo.

The people elected to make the decisions...

SeanW wrote: »

If we could vote on both treaties I would vote Yes to the FST, because I believe in living within our means, and vote No to the ESM treaty, because I think it's taking Europe in the wrong direction, but that is not an option. Furthermore, there's probably nothing I can do to stop the ESM treaty or make my opposition to it count for anything.

I can only hope that by helping to derail the EST, making Ireland ineligable for ESM aid, might make it difficult for even our political class to justify the ratification of the ESM.

The wrong direction being the ability to bail out European countries?

SeanW wrote: »

True, but applying the correct political pressure to force countries to recapitalise their banks would be done by other branches of the Eurocracy.

Countries don't have to be forced to bail out their banks, though - banks over a certain size are always bailed out.

SeanW wrote: »

Source? (I'm not being smart here, I genuinely would like to know what criticisms were made, from where and by whom?)

There was plenty of criticism at the time around Europe, but the criticism is ongoing. For example, Commissioner Almunia:

IRELAND’S “UNILATERAL” bank guarantee of September 2008 was the trigger for subsequent EU-level actions to preserve Continent-wide financial stability, according to Joaquin Almunia, EU commissioner for competition.

Speaking to an audience of bankers in Dublin yesterday, the Spaniard repeated criticisms he made earlier in the week of the guarantee. Among other things, Mr Almunia said that it had limited the “margin for manoeuvre to seek burden-sharing from senior bondholders”.

http://www.irishtimes.com/newspaper/finance/2011/0618/1224299153081.html

Also, from the same source:

He went on to say that banking sectors could not be allowed reach a size “disproportionate” to the economies in which they operated. In Ireland’s case the “economy needs smaller, more robust and more prudent institutions”.

He said that another factor in the crisis was a failure of the State regulator to assess risk in “traditional” lending.

In the future, Mr Almunia warned that the creation of two pillar banks will “create a de facto duopoly”.

That last is an important point. We are creating two "pillar banks", which will automatically be "too big to fail" - which means that in the event of any future crisis, Ireland will do all of this over again. No doubt we will blame the EU for it somehow.

cordially,
Scofflaw

Dirk Gently

Scofflaw wrote: »

That last is an important point. We are creating two "pillar banks", which will automatically be "too big to fail" - which means that in the event of any future crisis, Ireland will do all of this over again. No doubt we will blame the EU for it somehow.

cordially,
Scofflaw

This is what I can't get my head around. Why have any "pillar" banks. Surely a greater number of smaller banks, none of which are systemic would be more desirable. That assumes of course that it is our wish not to have to bail another bank out. We need anti-merger legislation when banks get to a certain size, we're doing the opposite though.

We appear to be going heavy on the government spending side, setting up bail out mechanisms but not tackling the actual trigger (we're actually provoking the trigger). Have we just accepted bail outs will happen over and over again and are now legislating to stream line the process? There's nothing to stop another banking collapse (causing a deficit where there was none previously) but yet we have mechanisms in place to bail them out when they collapse. Would it not be better to prevent the private collapse in the first place than plan for the public rescue in the aftermath?

Any chance of a treaty requiring states to not have too big to fail entities written into their constitution and a no bail out rule?

Scofflaw

Dirk Gently wrote: »

This is what I can't get my head around. Why have any "pillar" banks. Surely a greater number of smaller banks, none of which are systemic would be more desirable. That assumes of course that it is our wish not to have to bail another bank out. We need anti-merger legislation when banks get to a certain size, we're doing the opposite though.

We appear to be going heavy on the government spending side, setting up bail out mechanisms but not tackling the actual trigger (we're actually provoking the trigger). Have we just accepted bail outs will happen over and over again and are now legislating to stream line the process? There's nothing to stop another banking collapse (causing a deficit where there was none previously) but yet we have mechanisms in place to bail them out when they collapse. Would it not be better to prevent the private collapse in the first place than plan for the public rescue in the aftermath?

Any chance of a treaty requiring states to not have too big to fail entities written into their constitution and a no bail out rule?

That would be excessive interference, I think - it's a specific policy prescription, after all. I'd favour a cap on bank sizes, certainly, amongst other things.

Depressing article from the IT:

MORE STRINGENT banking regulations – such as imposing limits on loan-to-value and loan-to-income borrowing ratios – should be considered to prevent another property bubble, the deputy governor of the Central Bank, Stefan Gerlach, has said.

Speaking at a conference on housing issues at NUI Galway yesterday, Mr Gerlach said: “Tightening these ratios in as the boom gets under way raises the ability of the financial system to cope if the bubble bursts. Their potential use in Ireland warrants further reflection.”

He also said that lending for the purchase of buy-to-let properties, which poses greater risks, could be reduced by forcing banks to set aside higher amounts of capital for these types of loans than for the purchase of homes.

This would ensure that the reliance of banks is “bolstered by the additional capital buffer”, he added.

Forcing banks to build up buffers against performing loans in an upturn “naturally slows bank lending in the boom phase and leaves banks in a better position to withstand loan losses in a crash”, he said.

http://www.irishtimes.com/newspaper/ireland/2012/0421/1224315009870.html

The thing about all those rather sensible-sounding rules? We could have had them in place 10 years ago. So any expectation of the Irish government doing the sensible thing here and breaking the banking sector up into multiple smaller banks (with legislative requirements ensuring that they be easily able to cooperate) is evidently just not a runner.

I suppose governments still like their "national champions", even though the track record of "national champions" is one of corruption, stupidity, and repeated bailouts.

cordially,
Scofflaw

Dirk Gently

Scofflaw wrote: »

That would be excessive interference, I think - it's a specific policy prescription,

seems strange talking about excessive interference being a no no considering recent history but I understand the point.

Surely it could be got round by making it a condition of future bailout loans that there are no systemic threats in an economy. opt in or opt out, each countries choice whether they want in or not. We already have public excessive interference and private bailouts are certainly excessive interference. Is there nothing in competition law that could be applied? It just seems that governments (i.e. people) are on the hook and banks are off the hook.

SeanW

Dirk Gently wrote: »

Any chance of a treaty requiring states to not have too big to fail entities written into their constitution and a no bail out rule?

Now there's a treaty I would vote Yes to in a heartbeat :cool:

Scofflaw

Dirk Gently wrote: »

seems strange talking about excessive interference being a no no considering recent history but I understand the point.

Surely it could be got round by making it a condition of future bailout loans that there are no systemic threats in an economy. opt in or opt out, each countries choice whether they want in or not. We already have public excessive interference and private bailouts are certainly excessive interference. Is there nothing in competition law that could be applied? It just seems that governments (i.e. people) are on the hook and banks are off the hook.

Unfortunately, an economy with no systemic threats is an economy that isn't going to need a bailout...

cordially,
Scofflaw

andrew

I'm going to go with a yes, since it's a step toward more fiscal integration. We'll never have a fiscally integrated EU in which countries which are doing well help out countries who are doing poorly, through the use of transfer payments, unless countries can be sure that other countries aren't going to piss that money away on unsustainable budgets.

The worst that can happen by voting yes, is that these rules aren't actually enforced, in which case it becomes another failed stability and growth pact. The idea that this treaty will somehow lead to more austerity is false; it targets the structural deficit, not the cyclical deficit (ie, the deficit you get when you ignore extra government spending which takes place during a recession).

Dirk Gently

Scofflaw wrote: »

Unfortunately, an economy with no systemic threats is an economy that isn't going to need a bailout...

cordially,
Scofflaw

not neccessarily. Economies and technology evolve all the time, they dont stay static. There's always external threats and unknowns. The treaty is essentially about governments being less wreckless on spending while not addressing private wrecklessness at all. Domestically though it would be prudent to eliminate known threats, such as pillar banking and over reliance on financial markets. We're regulating the state with this treaty without regulating that which feeds the state. We're only working on one half of the equation. In essence we're streamlining the bailout process and accepting that private debt is infact public debt to be borrowed and paid back with interest. seems like a win win situation for too big to fail lenders.

Scofflaw

Dirk Gently wrote: »

not neccessarily. Economies and technology evolve all the time, they dont stay static. There's always external threats and unknowns. The treaty is essentially about governments being less wreckless on spending while not addressing private wrecklessness at all. Domestically though it would be prudent to eliminate known threats, such as pillar banking and over reliance on financial markets. We're regulating the state with this treaty without regulating that which feeds the state. We're only working on one half of the equation. In essence we're streamlining the bailout process and accepting that private debt is infact public debt to be borrowed and paid back with interest. seems like a win win situation for too big to fail lenders.

To be fair, there's quite a bit of policy prescription and oversight on the other side of the equation, introduced through the "Six Pack" and "Two Pack". They just don't get a lot of coverage.

cordially,
Scofflaw

Ozymandius2011

No for a couple of reasons.

- The MANDATE representative Mr. Douglas said on Prime Time last night that even if we vote no we will still have access to the funds from the EFSF (European Financial Stability Fund) whatever happens with the ESM. The ESM is what we don't get access to if we vote no. He said we can borrow up to €250 billion under the EFSF. In any case the govt hasn't said we need another bailout and I find their signals on this question confusing.

- While in favour of strict limits on the size of the deficit I am opposed to the erosion of national sovereignty implied in allow the European institutions to supervise the implementation of this at national level. It constitutes a step on the road to fiscal-union in my humble opinion, and therefore a slippery-slope to an assault on our independence in other areas of fiscal policy.

- The likely election of Francois Hollande in France and the fall of the Dutch government call into question these countries' continued ratification of the Fiscal Compact, meaning that Ireland would not necessarily be isolated in voting no. Hollande has called for renegotiation of the FC.

- I no longer support the Euro, and protection of the Euro has been cited by the govt as a reason for supporting the Treaty. The Euro has resulted in Irish monetary policy being determined based on Eurozone inflationary trends, rather than those of Ireland. Ireland has been at the opposite end of the inflationary-cycle from Germany yet has had the interest rates required by Germany imposed on us. In large part this caused the housing bubble in this country. I believe we need to return to setting out own interest rates so this does not happen again.

- Iceland is recoverying strongly outside the euro because of their weak currency boosting exports. Unemployment in Iceland has fallen back to 6%.

- Spain and Greece recently got away with breaching the original conditions of their respect bailouts. In that context threats of dire consequences to Ireland in seeking a renegotiation of the FC ring hollow.

recedite

Skopzz wrote: »

A government that was remotely interested in the nation's future would stay in, repudiate the bank bailout, lend Euros at base rate, defend its stance and balance the budget by collecting sufficient income tax. This could provide the platform for going forward.

It would be nice to see a new political party advocating these policies.
Currently the only opposition we have is the anti-austerity left wing who have no desire to balance any budgets.

andrew wrote: »

I'm going to go with a yes, since it's a step toward more fiscal integration. We'll never have a fiscally integrated EU in which countries which are doing well help out countries who are doing poorly, through the use of transfer payments, unless countries can be sure that other countries aren't going to piss that money away on unsustainable budgets.

I agree the Euro would work well in a fiscal union, similar to the way the dollar works in US states. But treaties like this and the previous growth and stability pact do nothing to prevent one euro State from creating a credit bubble in another. For example, lets say the ECB sets an interest rate which is too low for Ireland. And then a vast amount of the eurozone currency is created at home and abroad and "invested" in a property bubble. And then the govt. can run record surpluses by taxing the capital gains of those selling land, while also applying stamp duties to those buying the property. All provisions of the treaty are complied with.
Everything seems fine until the time comes for the investors to get their money back, and then the bubble collapses. By the normal rules of capitalism they should lose some or all of the investment through default or local currency devaluation. But in this Brave New Eurozone World, the ordinary citizen of the victim country is forced to take on all the burden instead.

meglome

Ozymandius2011 wrote: »

- The MANDATE representative Mr. Douglas said on Prime Time last night that even if we vote no we will still have access to the funds from the EFSF (European Financial Stability Fund) whatever happens with the ESM. The ESM is what we don't get access to if we vote no. He said we can borrow up to €250 billion under the EFSF. In any case the govt hasn't said we need another bailout and I find their signals on this question confusing.

Ah the unions, the very people who helped get us into this mess by having their cake and eating it. I'd rather take advice from my neighbours cat.

Ozymandius2011 wrote: »

- While in favour of strict limits on the size of the deficit I am opposed to the erosion of national sovereignty implied in allow the European institutions to supervise the implementation of this at national level. It constitutes a step on the road to fiscal-union in my humble opinion, and therefore a slippery-slope to an assault on our independence in other areas of fiscal policy.

We are the EU as much as anyone is and the same way we vote these treaty's in we can vote them out.

Ozymandius2011 wrote: »

- The likely election of Francois Hollande in France and the fall of the Dutch government call into question these countries' continued ratification of the Fiscal Compact, meaning that Ireland would not necessarily be isolated in voting no. Hollande has called for renegotiation of the FC.

Making election promises to win an election... who woulda thunk it.

Ozymandius2011 wrote: »

- I no longer support the Euro, and protection of the Euro has been cited by the govt as a reason for supporting the Treaty. The Euro has resulted in Irish monetary policy being determined based on Eurozone inflationary trends, rather than those of Ireland. Ireland has been at the opposite end of the inflationary-cycle from Germany yet has had the interest rates required by Germany imposed on us. In large part this caused the housing bubble in this country. I believe we need to return to setting out own interest rates so this does not happen again.

Bully for you. You know all our debts are in Euro right?
And setting interest rates is by no means the only way to regulate our economy, many economists don't even think it's the preferred way.

Ozymandius2011 wrote: »

- Iceland is recoverying strongly outside the euro because of their weak currency boosting exports. Unemployment in Iceland has fallen back to 6%.

Ah the auld Iceland comparisons. Why oh why do people see the need to make poor comparisons.
Iceland has 7% unemployment according to the figures I just looked up. The interesting thing about that is it's nearly 8 times higher than it was before their bust. That's not something to applaud.

andrew

recedite wrote: »

I agree the Euro would work well in a fiscal union, similar to the way the dollar works in US states. But treaties like this and the previous growth and stability pact do nothing to prevent one euro State from creating a credit bubble in another. For example, lets say the ECB sets an interest rate which is too low for Ireland. And then a vast amount of the eurozone currency is created at home and abroad and "invested" in a property bubble. And then the govt. can run record surpluses by taxing the capital gains of those selling land, while also applying stamp duties to those buying the property. All provisions of the treaty are complied with.
Everything seems fine until the time comes for the investors to get their money back, and then the bubble collapses. By the normal rules of capitalism they should lose some or all of the investment through default or local currency devaluation. But in this Brave New Eurozone World, the ordinary citizen of the victim country is forced to take on all the burden instead.

In a proper fiscal union, things would be a bit different. There'd be more centralised control of govrenment budgets, and so it'd be more difficult for a government to adopt massively pro-cyclical budget and tax policies, since they'd be expected to contribute, in good times, toward the rest of the union. And in the event a bubble forms and collapses, a proper union would deal with bank failures on a federal basis, spreading the cost and burden over a manageable number of people; for example, individual US states aren't expected to bail out banks which reside there, and so it's not good to expect EU states to do the same.

I agree that the whole socialisation of losses is a problem, and banks that are too big to fail are a problem, but these problems aren't exclusive to the eurozone, and I don't see how they're relevant to the treaty at hand.

recedite

Indeed the treaty's irrelevance to the problems is the reason nobody is enthusiastic about it.

Ozymandius2011

Leo Varadkar has just had to acknowledge on Vincent Browne in response to Padraig McLochlainn that "there may be alternatives" to the ESM for funding and also - devastatingly in my view - that the ESM Treaty barring us from funding if we dont ratify the Fiscal Compact - will not be ratified until after the referendum. In other words, if we vote no it is not even certain we will be barred from accessing the ESM. And now Stephen Donnelly - on the yes side - is admitting we may still be able to borrow from the IMF even if we vote no.

meglome wrote: »

Ah the unions, the very people who helped get us into this mess by having their cake and eating it. I'd rather take advice from my neighbours cat.



We are the EU as much as anyone is and the same way we vote these treaty's in we can vote them out.



Making election promises to win an election... who woulda thunk it.



Bully for you. You know all our debts are in Euro right?
And setting interest rates is by no means the only way to regulate our economy, many economists don't even think it's the preferred way.



Ah the auld Iceland comparisons. Why oh why do people see the need to make poor comparisons.
Iceland has 7% unemployment according to the figures I just looked up. The interesting thing about that is it's nearly 8 times higher than it was before their bust. That's not something to applaud.

It was 10% at the height of the bust and is half of ours.

K-9

Ozymandius2011 wrote: »

Leo Varadkar has just had to acknowledge on Vincent Browne in response to Padraig McLochlainn that "there may be alternatives" to the ESM for funding and also - devastatingly in my view - that the ESM Treaty barring us from funding if we dont ratify the Fiscal Compact - will not be ratified until after the referendum. In other words, if we vote no it is not even certain we will be barred from accessing the ESM. And now Stephen Donnelly - on the yes side - is admitting we may still be able to borrow from the IMF even if we vote no.It was 10% at the height of the bust and is half of ours.

I would agree the ESM type bail out is very debatable. The IMF part to me, isn't. We have borrowed more than the IMF can lend us, the IMF are having their own difficulties in finding extra funding. I think assuming the IMF will give us a second bail out is very presumptuous.

andrew

recedite wrote: »

Indeed the treaty's irrelevance to the problems is the reason nobody is enthusiastic about it.

I would've thought that at worst, that'd make people indifferent toward it, as opposed to actively opposing it. And anyway, you can't fix those problems with a single treaty. A treaty to solve the problems you could fix with a single treaty (a lack of fiscal centralisation for example) probably wouldn't pass anyway.

Scofflaw

Ozymandius2011 wrote: »

Leo Varadkar has just had to acknowledge on Vincent Browne in response to Padraig McLochlainn that "there may be alternatives" to the ESM for funding and also - devastatingly in my view - that the ESM Treaty barring us from funding if we dont ratify the Fiscal Compact - will not be ratified until after the referendum. In other words, if we vote no it is not even certain we will be barred from accessing the ESM. And now Stephen Donnelly - on the yes side - is admitting we may still be able to borrow from the IMF even if we vote no.

Unfortunately, Stephen Donnelly doesn't speak for the IMF. Nor does our ratification of the ESM make any difference at all to whether we have access to it - or to whether it goes ahead as is. We can refuse to ratify, and it can still go ahead, and unless we've ratified the Fiscal treaty, we still don't have access to it as it currently stands.

On the other hand, yes, there will almost certainly be alternative bailout funding available to us - it's just going to be on worse terms than the ESM funding, because it will come from the same people, and it will be politically impossible for them to give a better deal than the ESM.

Ozymandius2011 wrote: »

It was 10% at the height of the bust and is half of ours.

And their unemployment is normally a quarter of ours (1% to our 4%), so relative to their normal unemployment, their current unemployment rate is double. To reach the same relative rates as during the height of Iceland's bust, we would have had to have 40% unemployment.

The dangers, as already said, of facile comparisons.

cordially,
Scofflaw

karlth

Scofflaw wrote: »

And their[Iceland's] unemployment is normally a quarter of ours (1% to our 4%), so relative to their normal unemployment, their current unemployment rate is double. To reach the same relative rates as during the height of Iceland's bust, we would have had to have 40% unemployment.

Average unemployment was before the bust 3.3%, so it has about doubled. The difference between Ireland and Iceland is that we are taking the hit in a devalued currency rather than unemployment. (Neither is pleasant).

Also what is helping us here up north is that we are pretty close to Norway (in distance and culture) and a lot of Icelanders are moving there temporarily for work.