Fiscal Treaty Megathread [Poll Reset]

Scofflaw

lightspeed wrote: »

Im not sure if others were as surprised as me but tonight Germany and France said that they owe a duty to Greece to keep them in the euro and help them however possible even though Greece will not abide by any austerity package whatsoever. They will not even make any changes to the retirement age of 55 in Greece. Take that into account and then ask what will happen to Ireland if we vote no? Well worse case scenario could be that we end up in Greece's shoes, that does not seem to bad. They have already had over 100 billion euro of debt written off, perhaps if our cowardly politicians were not so eager to please our fuher we could have struck a bette deal, at least with the Anglo promissory notes payment.

Another important issue is what about Spain? Its generally accepted that they wont even meet the revised and reduced deficit targets, so how will they reach the targets set out in this treaty with 25% unemployment and now they are only beginning to get to grips with their bankng crisis. So how that gonna work out?

This treaty is nothing but a piece of paper to try get Angela Merkel by another year to survive long enough to get reelected next year. The markets are not going to suddenly relax because people agree to words on page. Hollande tonight said even Eurobonds are on the table and thats exactly what is needed. The whole EU is so fundamentally flawed. In the USA they dont just abandon the troubled states to fix their own financial problems with no federal funding and huge interests rates to pay but thats not the case in the EU. Hence the absolute failure of the european recovery.

Germany was irresponsible when they lent the money to so many banks during the boom years to begin with now they think they can just lend more money, charge large amounts of interest and enforce austerity so that they dont have to pass any measures of austerity on their own people. They have never had such low unemployment since the fall of the berlin wall and posted growth of 0.5% Gdp just yesterday. The germans seem to forget that they are in a single currency that risks collapsing.

There is an all one community approach on federal law, single currency and immigration but with debt there is an on your on own approach. Its just too flawed to work. I will be voting no cause the longer this game of Jenga continues, the longer it will be before the Germans bite the bullet and agree to issuing Eurobonds to help Europe recover.

Except that the general view is that Merkel (or her successor) needs the Treaty before eurobonds would even become a possibility.

cordially,
Scofflaw

lightspeed

If that was the case then why is it not a condition. of this treaty? why would it not be made public that the germans will agree to eurobonds if their is a fiscal treaty in place? I reckon it will be in the next treaty referendum if this treaty is voted out. Ill be quite disappointed if its a yes vote considering Germany themselves have not ratified it and most of the troubled countries who are supposed to abide by the rules laid out in it wont be able to.

Greece - No not a chance
Spain - Highly optimistic, most likely innthe same boatnas Greece
Ireland - Cant see how we can afford to but im sure we will play ball til it come crashing down and an anti austerity party is voted in here and Enda gets the boot. I reckon Fine Gael are terrified about Greece because if the position they have taken does not turn out as bad as everyone thinks it will, Fine Gael will have to follow suit otherwise come election time, they are fuked.
Belgium- if im not mustaken also has large issues with a debt
Holland - Dutch government recently collapses as they were unable to agree with austerity measures.
Portugul They have not been in the news in a while but surely its debatable that they will be able to abide by the fiscal rules of thus fiscal treaty.

Scofflaw

lightspeed wrote: »

If that was the case then why is it not a condition. of this treaty? why would it not be made public that the germans will agree to eurobonds if their is a fiscal treaty in place?

Because no such thing is guaranteed, nor is it the point of the Treaty. The Germans are opposed to eurobonds, as they are to a number of other moves to let other people trade on their economic strength or otherwise put their hands in Germany's pocket. The Fiscal Treaty is a minimum requirement for Germany to begin consideration of any of these options - but the point of it is primarily to reassure the sovereign debt markets.

lightspeed wrote: »

I reckon it will be in the next treaty referendum if this treaty is voted out. Ill be quite disappointed if its a yes vote considering Germany themselves have not ratified it and most of the troubled countries who are supposed to abide by the rules laid out in it wont be able to.

Greece - No not a chance
Spain - Highly optimistic, most likely innthe same boatnas Greece
Ireland - Cant see how we can afford to but im sure we will play ball til it come crashing down and an anti austerity party is voted in here and Enda gets the boot. I reckon Fine Gael are terrified about Greece because if the position they have taken does not turn out as bad as everyone thinks it will, Fine Gael will have to follow suit otherwise come election time, they are fuked.
Belgium- if im not mustaken also has large issues with a debt
Holland - Dutch government recently collapses as they were unable to agree with austerity measures.
Portugul They have not been in the news in a while but surely its debatable that they will be able to abide by the fiscal rules of thus fiscal treaty.

The reason most of Europe is having austerity is because most of Europe, like Ireland, have boom time public spending balanced on recession economies, and market lenders are concerned about their ability to repay borrowings. The Treaty provides targets to aim for, and limits to stick to once the targets have been reached, but no amount of voting one way or another will vote Europe out of recession or avoid the need for Europe's governments to balance their books. Fundamentally, the markets are enforcing austerity, not the Treaty - the Treaty is an attempt to show that European governments are serious about reining in spending and to try to push sovereign bond rates back towards their boom time levels, particularly for those countries most visibly in trouble.

cordially,
Scofflaw

Dead Kennedys

AdamD wrote: »

People do realise we have to make budget cuts right? EU or no EU...

We can vote NO and still make budget cuts, public sector pay for example. Writing down the bank 'debt' is a no brainer but FG / Labour haven't the balls.

Trine

Things like "Vote Yes for Jobs", calling it a "Stability" Treaty, and silly stuff like "Greece is an example of what we will become if we vote No" makes me feel like a naive child being condescendingly talked down to by a parent.

I'll be more determined to vote than in any previous election or referendum.

It'll be a No from me.

lightspeed

[QUOTE=
The reason most of Europe is having austerity is because most of Europe, like Ireland, have boom time public spending balanced on recession economies, and market lenders are concerned about their ability to repay borrowings. The Treaty provides targets to aim for, and limits to stick to once the targets have been reached, but no amount of voting one way or another will vote Europe out of recession or avoid the need for Europe's governments to balance their books. Fundamentally, the markets are enforcing austerity, not the Treaty - the Treaty is an attempt to show that European governments are serious about reining in spending and to try to push sovereign bond rates back towards their boom time levels, particularly for those countries most visibly in trouble.

cordially,
Scofflaw[/QUOTE]

How can you say its the markets dictating austerity when austerity is the reason why the EU as a whole is unable to grow and that is clearly at the hands of the germans. Germany has the fantasy that they are a country and not a state like the rest of us. If the amount of austerity that is required to be passed is passed, almost all of the EU countries will go further into recession. How can you pass austerity and grow an economy at the same time? Its not a matter of social justice, its a matter of science. If eurobonds are not on the table, a far left government will be voted in in every austerity stricken country and then all austerity packages will be rejected which means the euro will be exterminated.

Patience / German Arrogance and Denial = Eurobonds
Or
German Arrogance and Denial + Austerity = Death of the Euro

How will there be any other outcome?
Can anybody answer the fundamental question of how you can enforce austerity measure and produce growth? Forget having a social conscience for a moment, lets talk scientifically like science like people. How is it actually possible? Is it not like taking large amounts of water out of a glass and expecting the glass to have the same amount in it?
This argument of austerity isnt work because the economy has further declined seems odd to me because how could it? How can you choke an economy of growth but expected it to grow?

Phill Ewinn

http://i50.tinypic.com/dma1ja.jpg

He's asking you to vote no to the fiscal treaty. In fairness he's done some good charactures and incuded a picture of some good lookin' hen.

Is it OK that an post now works for Farage? I found it odd.

Born to Die

Not really if you read it. not a good choice as the main name though.

FatherLen

http://www.boards.ie/vbulletin/showthread.php?t=2056611774

Pushtrak

Ah, great UKIP, he kips.

My name is URL

http://img.chan4chan.com/img/2010-05-07/1273262294811.jpg

Dravokivich

There was someone giving out leaflets at my trainstation the other day. She must of been mid 50's by the looks of her. Appeared to be quite jolly as well. Ah, what a buetiful morning it was.

Didn't accept her leaflet though. So can't tell you if she was for or against it. Personally I tend to ignore the baised posters / leaflets.

She seemed nice though. How about this Nigel fella? Looks a bit grumpy in that picture.

Shenshen

Yep, we got one of those through the door the other day.
I had to laugh at the thought of a nationalistic Brit trying to tell the Irish what to vote for... I mean, it does take some cheek, it really does.

Morlar

Being honest that is one of the few leaflets I'd be interested in reading. The uber-left boyd-barrett types being against the treaty are not doing that side of the argument any favours.

That plane photo cracks me up every time :
http://img.chan4chan.com/img/2010-05-07/1273262294811.jpg

very funny guy if you ask me.

Stiffler2

Whatever the regime wants us to vote then I will be voting for the opposite. That's how I vote these days. It's a no brainer really.

gettting sick of Germanys chancers chancellors dictators

Dubhlinner

I thought the UK already rejected this treaty?

Phill Ewinn

At least he's not doing it for the benefit of his own popularity. We can't vote for him.

Like to see him take on Vinnie Browne. Be like two pitbulls so they would. Any chance TV3?

Nothingbetter2d

Stiffler2 wrote: »

really.

gettting sick of Germanys chancers chancellors dictators

wasn't Hitler a chancellor before he got promoted to dictator? the cycle continues

Krispie

Just had a quick scan through it and it's not the cartoons, emigration stats or sensational Headlines that got me.

It was the size of the baloobas on yer one on the 2nd last page, in the white T-Shirt...... aaawwwwwggggggg....:D:D

Eramen

Stiffler2 wrote: »

Whatever the regime wants us to vote then I will be voting for the opposite. That's how I vote these days. It's a no brainer really.

gettting sick of Germanys chancers chancellors dictators

You say that as if Germans ruled or had a say in their Germany. Thing is, they don't!

They are owed by the political/international financial established as much as we are. Go figure.

Blame zee Germans is easier than accepting our Irish failures.

Kurz

It gave me a chuckle over my cornflakes this morning, very well put together leaflet compared to the other stuff we get full of stock photos and slogans. The photoshop of Phil Hogan being dropped in a bin and the Merkel cartoon were very funny.

I'd like to see the likes of himself and Ganley putting in their two cents a bit more as people have gotten sucked into the trap of thinking that this is a left/right issue and they're not going side with Richard Boyd Barret.

My name is URL

Dubhlinner wrote: »

I thought the UK already rejected this treaty?

He's involving himself in this as part of the EFD Group, not a British MEP. He just happens to be president of that group.

christmas2012

I read the nigel farage leaflet and found it very informative and clear to the point,because of this i will be voting NO.

I think weve been fooled for long enough,and if people vote no,they wont be able to tax the hell out of us again,thats what they have planned in the yes vote.

Didnt they lie to us some years back,and said vote yes to jobs?Vote yes to growth?While all our irish emigrated to OZ?

Scofflaw

lightspeed wrote: »

How can you say its the markets dictating austerity when austerity is the reason why the EU as a whole is unable to grow and that is clearly at the hands of the germans.

How is that even supposed to happen? There are three countries in bailout programmes - Greece, Portugal, Ireland. The Fiscal Treaty hasn't happened. So, of all the EU countries, the most you could claim are in any sense even in a position to have their policies dictated by Germany are the three bailout countries - yet every country in Europe is engaged in austerity. You could maybe claim the ECB is enforcing the German will on Europe, but the ECB is keeping its rates in the basement and lending a positive tsunami of money.

"Austerity" is happening - both inside and outside the EU - because governments are spending too much and taking in too little in tax. It's not complicated, and requires no fantasy of "Deutschland uber alles" to explain it.

The only source of money for governments that want to keep running deficits - which seems to be the "opposite" to "austerity", given the latter apparently doesn't mean actual hardship but any deficit cutting - is the markets, which is to say, money that belongs to other people. Those people, or the people that manage their money for them, are reluctant to lend to sovereigns because they are afraid that the sovereigns either cannot or will not pay them back. That's your "bond rates" problem, and the bond rates are higher for countries with high debt and high deficits. Again, not complicated, requires no realpolitik fantasies.

lightspeed wrote: »

Germany has the fantasy that they are a country and not a state like the rest of us. If the amount of austerity that is required to be passed is passed, almost all of the EU countries will go further into recession. How can you pass austerity and grow an economy at the same time? Its not a matter of social justice, its a matter of science. If eurobonds are not on the table, a far left government will be voted in in every austerity stricken country and then all austerity packages will be rejected which means the euro will be exterminated.

Patience / German Arrogance and Denial = Eurobonds
Or
German Arrogance and Denial + Austerity = Death of the Euro

How will there be any other outcome?
Can anybody answer the fundamental question of how you can enforce austerity measure and produce growth? Forget having a social conscience for a moment, lets talk scientifically like science like people. How is it actually possible? Is it not like taking large amounts of water out of a glass and expecting the glass to have the same amount in it?
This argument of austerity isnt work because the economy has further declined seems odd to me because how could it? How can you choke an economy of growth but expected it to grow?

I'm sure every government currently doing deficit cutting would much rather be doing stimulus packages, but that option isn't necessarily there. Where can you get the money to "grow the economy"? It's a simple question. You can't have, say, a €100bn stimulus package in Spain if Spain can't borrow €100bn. Or, of course, if it can't borrow the money at rates that make stimulus work.

When you borrow for stimulus, you're taking a bet that the growth resulting from the stimulus will be larger than the costs of borrowing the money. If your economy has structural problems that will restrict its growth response to stimulus, and the rates being charged for borrowing are high, stimulus isn't a realistic option.

And if the reasons your rates are high is because the market thinks you have too much debt already, it should be as plain as the balls on a dog that before you can borrow for stimulus, you are going to have to reduce your debt levels.

The other option is printing money - "quantitative easing". That's what has traditionally been done, and the results are well known - a temporary boost followed by a long-term headache. The reason central banks became independent after the Eighties was to prevent politicians from opting to run the printing presses whenever they had a deficit problem, because that's always what people call for, and politicians like to do what people want.The ECB's independence, and its hard line on printing money to "stimulate growth" is a result of the lessons learned in the Seventies, when turning the money taps on produced galloping stagflation and a couple of decades of economic stagnation.

So, sure, most people would love to see "spending for growth" rather than austerity, but where does the money come from to do it, and how successful will it be in the longer term?

cordially,
Scofflaw

Attabear

christmas2012 wrote: »

I think weve been fooled for long enough,and if people vote no,they wont be able to tax the hell out of us again,thats what they have planned in the yes vote.

Oh dear, you are going to be very disappointed I'm afraid.

There's a massive s**t pie to be eaten and we're eating it one way or the other. Voting no to the treaty won't make any difference to the taste of that pie.

lightspeed

From what i heard on sky news, the idea of Eurobonds essentially means all the debt from the debt sticken countries would be bundeled together and would be the burden of the the entire EU countries and not just the member states. Germany is obviously against that but with the disproportional level of cuts of austerity required all across europe how can the euro survive if left wing anti austerity parties get into power and refuse to abide by the austerity measures. When the left wing parties like Sinn fein and United left alliance were against bailing out the banks cause we would have to default anyway, i did not think they were right. However seeing whats happening in Greece and what is expected from this treaty, its seems a very real possibility, may not right away but it looks to be down the road. The question is now how can the euro survive if ant austerity parties refuse to abide by austerity measure?
Can anybody answer that question?

squod

lightspeed wrote: »

all the debt from the debt sticken countries would be bundeled together and would be the burden of the the entire EU countries and not just the member states.

Bundling together good debts and bad debts and expecting people to take these bonds seriously?

lightspeed wrote: »

The question is now how can the euro survive if anti austerity parties refuse to abide by austerity measure?
Can anybody answer that question?

Big write downs and devaluation of the euro will come soon enough.

Chucky the tree

Anti-austerity parties won't refuse. Greece is the only country that will do that, once they leave the euro and everything implodes on them then I think other countries will realise that might not be a good road to go down.

steve9859

Scofflaw wrote: »

How is that even supposed to happen? There are three countries in bailout programmes - Greece, Portugal, Ireland. The Fiscal Treaty hasn't happened. So, of all the EU countries, the most you could claim are in any sense even in a position to have their policies dictated by Germany are the three bailout countries - yet every country in Europe is engaged in austerity. You could maybe claim the ECB is enforcing the German will on Europe, but the ECB is keeping its rates in the basement and lending a positive tsunami of money.

"Austerity" is happening - both inside and outside the EU - because governments are spending too much and taking in too little in tax. It's not complicated, and requires no fantasy of "Deutschland uber alles" to explain it.

The only source of money for governments that want to keep running deficits - which seems to be the "opposite" to "austerity", given the latter apparently doesn't mean actual hardship but any deficit cutting - is the markets, which is to say, money that belongs to other people. Those people, or the people that manage their money for them, are reluctant to lend to sovereigns because they are afraid that the sovereigns either cannot or will not pay them back. That's your "bond rates" problem, and the bond rates are higher for countries with high debt and high deficits. Again, not complicated, requires no realpolitik fantasies.



I'm sure every government currently doing deficit cutting would much rather be doing stimulus packages, but that option isn't necessarily there. Where can you get the money to "grow the economy"? It's a simple question. You can't have, say, a €100bn stimulus package in Spain if Spain can't borrow €100bn. Or, of course, if it can't borrow the money at rates that make stimulus work.

When you borrow for stimulus, you're taking a bet that the growth resulting from the stimulus will be larger than the costs of borrowing the money. If your economy has structural problems that will restrict its growth response to stimulus, and the rates being charged for borrowing are high, stimulus isn't a realistic option.

And if the reasons your rates are high is because the market thinks you have too much debt already, it should be as plain as the balls on a dog that before you can borrow for stimulus, you are going to have to reduce your debt levels.

The other option is printing money - "quantitative easing". That's what has traditionally been done, and the results are well known - a temporary boost followed by a long-term headache. The reason central banks became independent after the Eighties was to prevent politicians from opting to run the printing presses whenever they had a deficit problem, because that's always what people call for, and politicians like to do what people want.The ECB's independence, and its hard line on printing money to "stimulate growth" is a result of the lessons learned in the Seventies, when turning the money taps on produced galloping stagflation and a couple of decades of economic stagnation.

So, sure, most people would love to see "spending for growth" rather than austerity, but where does the money come from to do it, and how successful will it be in the longer term?

cordially,
Scofflaw

Scofflaw, I haven't been on boards for a while....not on much these days. But was just wondering (and you have probably given your view elsewhere) ....do you believe that Greece will stay in the Euro and there will not be game changing contagion if / when it leaves? And that the ESF will have enough money to bail out Italy and Spain?

In that eventuality surely it doesn't matter at all whether we vote yes or no, as the whole thing is dead in the water?

I am not being facetious....it is a genuine question, having not followed any of these threads for a good while.

Scofflaw

steve9859 wrote: »

Scofflaw, I haven't been on boards for a while....not on much these days. But was just wondering (and you have probably given your view elsewhere) ....do you believe that Greece will stay in the Euro and there will not be game changing contagion if / when it leaves? And that the ESF will have enough money to bail out Italy and Spain?

In that eventuality surely it doesn't matter at all whether we vote yes or no, as the whole thing is dead in the water?

I am not being facetious....it is a genuine question, having not followed any of these threads for a good while.

No, they're good questions, but the answers are obviously going to be speculative!

Greece may or may not leave the euro - I'd see a lowish likelihood of a chaotic exit, a possibility of a managed exit, and a decent chance of remaining in the euro. Which of those comes about depends almost entirely on Greek domestic politics - the assistance is there to help them stay in, so if they're prepared to make the necessary efforts to do so, that's what will happen. If they can't resolve their own internal politics, then a chaotic exit of some kind becomes possible, because I cannot see the EU intervening to enforce a resolution, and I can see a politically divided Greece chaotically defaulting as a result of simply being incapable of managing its finances at all. The idea of a managed exit...I can't really see how managed euro exit resolves any Greek problems, whereas a chaotic exit will probably accompany a default, so that one will only come about if the Greeks resolve enough of their internal disputes to elect a government that thinks a euro exit is necessary.

Effectively, at the moment, Greece is using the euro currency, and is part of the euro monetary system, but in much the same way as Anglo is still part of the financial system - it's a zombie part, reliant for life support on the rest of the system.

On contagion resulting from a Greek exit, a lot depends, in turn, on how that comes about. I know the idea is that having "forced a Greek exit" the predatory markets will then move on to shaft Ireland and Portugal...but the markets have already "forced" the exit of all three countries from the markets. I don't see what they can really do to force Ireland or Portugal out of the euro - both countries are small enough to be protected by the rest of the eurosystem, and already are. There would be contagion effects for holders of Greek debt, obviously, but as far as those can be protected and/or run down, holders have been doing their best to ensure that they are insulated from a Greek exit/default:

"Greece is basically irrelevant." That is how Allianz ALV.XE -0.39% described its exposure to the struggling country in its first-quarter-earnings analysts call on Tuesday. Investors worried about the impact of a Greek euro exit on Europe's insurers may take heart: Greek debt equals less than 1% of shareholders' equity for most big European groups. Many have written off the value of such assets on their balance sheets to zero. Greek insurers dominate their local market. But pain in Athens could still prove hard to contain.

Europe's insurers have been rapidly reducing their Greek exposure. The value of Greek sovereign-debt holdings at 16 of 28 groups tracked by J.P. Morgan more than halved in less than a year, to about €4.5 billion ($5.73 billion) at the end of 2011.

So I don't see a Greek exit at this point as being the game-changer it would have been a couple of years ago. Costly, certainly, but not game changing.

On the ESM having enough to bail out Spain or Italy...well, highly speculative. Italy's economy is ten times the size of Ireland's, Spain's is six and a half. If you just assume their bailouts are in proportion to ours, you can come up with some hand-waving figures. Our bailout package was €85bn, of which we provided €17.5bn, and of which €50bn was for current spending, €35bn for banks, of which most wasn't used. So you could say "50% of GDP", which obviously gives very scary figures for Italy and Spain - €700bn for Spain, c. €1tn for Italy.

Those two together would obviously swamp the current ESM ceiling of c. €750bn. Trebling the fund would make it large enough, and would represent a contribution of 7% of the remaining eurozone GDP (that is, without Italy, Spain, Ireland, Greece and Portugal), assuming a 5 year support programme like our own.

However, we have no idea whether Italy or Spain would require that much.

Spain's problems seem to be largely in its banks, and the kind of figure put on recapitalising those is around €174bn - Spain's banking sector is not 3.5 times the size of their economy, as ours was. There's an interesting and fairly detailed analysis here, which suggests that Spain plus Portugal (second bailout) might be €350-370bn, or about half of ESM - €250bn of that is for Spain, the rest for Portugal, the two economies being intimately connected:

Let's recap with some numbers:

(a) Money necessary to meet EBA recapitalization guidelines: €26.2 billion ($34 billion)
(b) Provisions recently imposed by the Spanish government: €50 billion ($66 billion)
(c) Likely extra provisions necessary (BAML estimates): €41 billion ($54 billion)
(a+b+c) Spanish-only bank bailout: €174 billion ($229 billion)
(d) Spanish banking exposure to Portugal: €78.8 billion ($103 billion)
(a+b+c+d) Spanish bank bailout with exposure backstop: approximately €250 billion ($328 billion)

(a+b+c+d+e) Spanish bank bailout with exposure backstop and Portuguese bailout: roughly €350-370 billion ($460-485 billion)


Read more: http://articles.businessinsider.com/2012-04-17/markets/31352944_1_spanish-banks-ecb-spain/2#ixzz1v6WfIX13

That's 17-18% of Spanish GDP. A similar sized bailout for Italy would be another €365bn, so the ESM, in conjunction with the IMF, should certainly be able to handle what's required.

Will they actually need the bailouts? Uncertain - polls of economists suggest an estimated 25% chance of a Spanish bailout, and 13% for an Italian one. The general view seems to be that both countries will avoid bailouts, but will act as a continuing drag on the eurozone economy.

So, is the "whole thing dead in the water" before we even vote? I would say very much not.

cordially,
Scofflaw