24/05 - Fiscal Treaty text not being changed.

Scofflaw

The news coming out of the EU leaders meeting today is that there will be no changes to the Treaty text, and that Hollande's Growth Pact will be supplementary.

http://www.rte.ie/news/2012/0524/text-of-the-eu-fiscal-treaty-will-not-be-changed.html

and

The French president expressed his satisfaction that the required by him, "Growth Pact" was seized upon as a supplement to the European Pact for more fiscal discipline.

http://www.focus.de/finanzen/news/staatsverschuldung/tid-25912/eu-sondergipfel-in-bruessel-griechenland-soll-in-eurozone-bleiben-aber-nicht-um-jeden-preis_aid_757491.html

cordially,
Scofflaw

Ozymandius2011

Well then let's demand our own "supplementary" writing-off Irish debt. We can threaten to veto Article 136 until we get it. And it's not just a decision for governments. The German parliament is holding up ratification.

Godge

Ozymandius2011 wrote: »

Well then let's demand our own "supplementary" writing-off Irish debt. We can threaten to veto Article 136 until we get it.

Is this a Walter Mitty novel we are in? Of maybe you want to have a go at Don Quixote's windmills?

The EU told the new French Prime Minister where to go with his demand for an amended Treaty. Like France, one of the big core EU countries. Now, do you seriously, realistically, expect them to listen to the demands of a small little island on the edge of Europe who has got more than most out of Europe over the last 40 years, more than almost any other country and who is dependent on the goodwill of its EU neighbours to pay its social welfare and public service pay bills? Cop on, our negotiating power is nil.

Do you seriously think that German taxpayers and Danish taxpayers and French taxpayers and Northern Ireland taxpayers etc. are going to agree to pay for the "supplementary" write-off of our debt because that is who will have to pay?

Scofflaw

Ozymandius2011 wrote: »

Well then let's demand our own "supplementary" writing-off Irish debt. We can threaten to veto Article 136 until we get it. And it's not just a decision for governments. The German parliament is holding up ratification.

Vetoing the Article 136 amendment won't stop ESM - it won't stop anything but the Article 136 amendment itself.

If the amendment was necessary because ESM was in conflict with articles in the Treaty, those articles would be being amended. They're not, so clearly the Article 136 amendment is not required to square ESM with the Treaties.

It's a very weak card, and it's not one that we can play anyway, because, coming back to the point about negotiating powers, the amendment is one that the government can both sign off on and actually ratify without recourse to either the Oireachtas or a referendum.

Whether that seems wrong to you or not, that is the constitutional process for that amendment, and not ratifying it would mean that the government has to be acting in bad faith, because there is no excuse for not ratifying the amendment except bad faith. The government cannot say "oh, the Dáil rejected it" or "oh, the people rejected it", it can only say "we're going back on our word, heh heh".

cordially,
Scofflaw

Ozymandius2011

Godge wrote: »

Is this a Walter Mitty novel we are in? Of maybe you want to have a go at Don Quixote's windmills?

The EU told the new French Prime Minister where to go with his demand for an amended Treaty. Like France, one of the big core EU countries. Now, do you seriously, realistically, expect them to listen to the demands of a small little island on the edge of Europe who has got more than most out of Europe over the last 40 years, more than almost any other country and who is dependent on the goodwill of its EU neighbours to pay its social welfare and public service pay bills? Cop on, our negotiating power is nil.

Do you seriously think that German taxpayers and Danish taxpayers and French taxpayers and Northern Ireland taxpayers etc. are going to agree to pay for the "supplementary" write-off of our debt because that is who will have to pay?

France has an unfortunate history when it comes to standing up to the Germans. The legal position is that we can veto Article 136 from being amended. That is our trump card. We have suffered enough austerity. The economy remains mired in mass unemployment. We need growth not austerity, and only a write-off of the debt will secure the funds for a stimulus package.

swampgas

Ozymandius2011 wrote: »

... We have suffered enough austerity. The economy remains mired in mass unemployment. We need growth not austerity, and only a write-off of the debt will secure the funds for a stimulus package.

To be fair, much of the country have not experienced real austerity at all. Sure, there are a lot of people really struggling, but they are the unlucky minority, as far as I can see. Most people are still doing okay.

IMO there is lots of scope for extra "austerity".

A debt write-off will not fix the huge deficit we are running right now. The real fix to the Irish economy is balancing the budget, and that's going to take time and hard work.

Godge

swampgas wrote: »

To be fair, much of the country have not experienced real austerity at all. Sure, there are a lot of people really struggling, but they are the unlucky minority, as far as I can see. Most people are still doing okay.

IMO there is lots of scope for extra "austerity".

A debt write-off will not fix the huge deficit we are running right now. The real fix to the Irish economy is balancing the budget, and that's going to take time and hard work.

Absolutely agree with you on how a debt write-off makes no difference at this stage. Even if we had a significant debt write-off, that would only save us a few hundred million on debt repayments each year in the short term. We would still have to find billions of other savings to cut our deficit.

The other point is to look at the long-term implications of debt write-off. Argentina is the clear example. A hundred years ago, Argentina was one of the wealthiest nations on earth. Several debt write-offs later, it is no longer in that category. It always has to pay a premium for debt because a potential write-off risk is included in the price. That acts as a long-term permanent brake on economic growth. If we were to follow the same route, we probably wouldn't be able to get back into the markets until 2020 or so. Even then we would probably have to pay 4-5% more for our debt than the Germans leaving us with a significant permanent disadvantage that would outweigh any small gains over the next two to three years.. Of course, none of this fits with the short-term blinkered and grubby grasp for power by SF and its ULA acolytes.

dunphy3

Godge wrote: »

Absolutely agree with you on how a debt write-off makes no difference at this stage. Even if we had a significant debt write-off, that would only save us a few hundred million on debt repayments each year in the short term. We would still have to find billions of other savings to cut our deficit.

The other point is to look at the long-term implications of debt write-off. Argentina is the clear example. A hundred years ago, Argentina was one of the wealthiest nations on earth. Several debt write-offs later, it is no longer in that category. It always has to pay a premium for debt because a potential write-off risk is included in the price. That acts as a long-term permanent brake on economic growth. If we were to follow the same route, we probably wouldn't be able to get back into the markets until 2020 or so. Even then we would probably have to pay 4-5% more for our debt than the Germans leaving us with a significant permanent disadvantage that would outweigh any small gains over the next two to three years.. Of course, none of this fits with the short-term blinkered and grubby grasp for power by SF and its ULA acolytes.

what about iceland??????

Godge

dunphy3 wrote: »

what about iceland??????

(1) Look at Iceland's Central Bank rates, wouldn't like to have a mortgage there?

(2) Look at Iceland's inflation rate, wouldn't want to have a fixed income there?

(3) Look at Iceland's bond market rates, wouldn't like to be trying to raise money for the highest social welfare rates in Europe

(4) Iceland is not a member of the Euro

(5) I used Argentina as an example as I was looking at the long-term costs rather than the short-term. I would be delighted to compare Ireland and Iceland in ten years time.

View

dunphy3 wrote: »

what about iceland??????

What about it?

It had a roughly 60% currency devaluation from which it hasn't recovered.

What do you think that does to the price of imports? Do you think Toyota, Ford etc didn't raise their prices in Icelandic Kronor to compensate for its drop?

Try a scenario where a car cost 160000 ISK in late 07, today that'll buy you "40% of the car" - i.e. the comparable car now costs 400000 ISK. Sound like fun?

Sure you can postpone buying a car for a while but for how long? If you had a new car in 07, it is five years old now. If, instead in 07, you were driving let's say a 5 year old car it is only a matter of time before the annual repair bill of your now 10 year old car starts to mount.

Godge

View wrote: »

What about it?

It had a roughly 60% currency devaluation from which it hasn't recovered.

What do you think that does to the price of imports? Do you think Toyota, Ford etc didn't raise their prices in Icelandic Kronor to compensate for its drop?

Try a scenario where a car cost 160000 ISK in late 07, today that'll buy you "40% of the car" - i.e. the comparable car now costs 400000 ISK. Sound like fun?

Sure you can postpone buying a car for a while but for how long? If you had a new car in 07, it is five years old now. If, instead in 07, you were driving let's say a 5 year old car it is only a matter of time before the annual repair bill of your now 10 year old car starts to mount.

It doesn't just apply to new cars, imported parts would be the same, a minor part for your ten-year old car, say a new clutch, could cost more than the car originally cost given the devaluation that had taken place, but still a lot less than a new car so rock and hard place situation.

Scofflaw

dunphy3 wrote: »

what about iceland??????

If Iceland got a debt write-off, it's news to me. They still owe all their bank debts too.

cordially,
Scofflaw

later12

Godge wrote: »

The EU told the new French Prime Minister where to go with his demand for an amended Treaty.

It's probably fairly irrelevant whether there is a protocol added to the TSCG or whether it is introduced independently in the near future. The important thing is that growth comes back on the agenda. To that end, it is Angela Merkel who is finding herself being advised where to go, not Hollande.

I don't quite think it's a case that the EU turned down Hollande. Apparently, he didn't even raise it at the pre-summit meeting last night (presumably he understands that it doesn't matter if it happens now or in the near future), as most commentators seem to be anticipating a "growth compact" in the summit next month.

Count Dooku

Scofflaw wrote: »

If Iceland got a debt write-off, it's news to me. They still owe all their bank debts too.

This is what British and Dutch think, but they never will get it back

K-9

later12 wrote: »

It's probably fairly irrelevant whether there is a protocol added to the TSCG or whether it is introduced independently in the near future. The important thing is that growth comes back on the agenda. To that end, it is Angela Merkel who is finding herself being advised where to go, not Hollande.

I don't quite think it's a case that the EU turned down Hollande. Apparently, he didn't even raise it at the pre-summit meeting last night (presumably he understands that it doesn't matter if it happens now or in the near future), as most commentators seem to be anticipating a "growth compact" in the summit next month.

Indeed, and something I always thought would happen despite No side protestations on here. It was a non issue, Hollande was never going to be the knight in shining armour.

meglome

K-9 wrote: »

Indeed, and something I always thought would happen despite No side protestations on here. It was a non issue, Hollande was never going to be the knight in shining armour.

Given the complexity of getting so many countries to agree on something I found it very unlikely the treaty would be actually rewritten. Protocols added yes, rewritten no. It was amazing to see people who dismiss everything any politician says queueing up to accept that Hollande would renegotiate this treaty. Then again the no camp are in the main very very good at hearing what they want to hear.

later12

K-9 wrote: »

Indeed, and something I always thought would happen despite No side protestations on here. It was a non issue, Hollande was never going to be the knight in shining armour.

No side protestations?

Who did not seriously want growth added to the Treaty? Personally I couldn't care less about the Treaty being altered; i would have thought the only thing everyone would have agreed on is a specific, well defined growth plan for Europe.

I'm not talking about you here K9, but there is a bit of a bizarre sense of people jumping around saying "Ha Ha, No Growth, We Win!".

As it happens I don't think this detracts from Francois Hollande's growth agenda. Some amongst the Irish internet community seem to be the only ones suggesting that, it certainly hasn't been raised as an issue in the French media or any other media to my knowledge.

Godge

later12 wrote: »

No side protestations?

Who did not seriously want growth added to the Treaty? Personally I couldn't care less about the Treaty being altered; i would have thought the only thing everyone would have agreed on is a specific, well defined growth plan for Europe.

I'm not talking about you here K9, but there is a bit of a bizarre sense of people jumping around saying "Ha Ha, No Growth, We Win!".

As it happens I don't think this detracts from Francois Hollande's growth agenda. Some amongst the Irish internet community seem to be the only ones suggesting that, it certainly hasn't been raised as an issue in the French media or any other media to my knowledge.

I don't think there are people jumping around saying "Ha Ha, No Growth, We Win!" - it would be quite bizarre to interpret posts like that.

It would be quite strange to call it Francois Hollande's growth agenda when there have been many politicians here (including Kenny and Gilmore) and in other EU countries calling for more initiatives on growth in addition and complementary to the Stability Treaty. It is only the "No" side in Ireland who have wanted growth initiatives without the Stability Treaty.

Scofflaw

later12 wrote: »

No side protestations?

Who did not seriously want growth added to the Treaty? Personally I couldn't care less about the Treaty being altered; i would have thought the only thing everyone would have agreed on is a specific, well defined growth plan for Europe.

I'm not talking about you here K9, but there is a bit of a bizarre sense of people jumping around saying "Ha Ha, No Growth, We Win!".

As it happens I don't think this detracts from Francois Hollande's growth agenda. Some amongst the Irish internet community seem to be the only ones suggesting that, it certainly hasn't been raised as an issue in the French media or any other media to my knowledge.

Clearly nobody is saying what you claim here - this is yet another in a series of straw men of yours.

regards,
Scofflaw

later12

Godge wrote: »

I don't think there are people jumping around saying "Ha Ha, No Growth, We Win!" - it would be quite bizarre to interpret posts like that.

I'm not saying they're delighted there's no growth add-on in itself, I'm saying they're delighted there's no change to the Treaty. If you were listening to Irish media between The Late Debate on Wednesday evening through to Morning Ireland and Pat Kenny yesterday, there was a string of Government and pro-Treaty reps beaming down the phone that the Treaty wouldn't be changed. David Davin Power came on and said "Well, this plays right into the Government's hands"

Which is more important here? I would put up with a messy Treaty for the sake of a serious, specific European growth formula. I couldn't care less how it gets through as long as it gets through, preferably yesterday.

It would be quite strange to call it Francois Hollande's growth agenda

Eh, no; it isn't. This growth pact was not even in the building before Hollande's election. I'm not necessarily blaming Kenny - he is the Prime Minister of a small peripheral country - but this is by no means his development.

Scofflaw

later12 wrote: »

I'm not saying they're delighted there's no growth add-on in itself, I'm saying they're delighted there's no change to the Treaty. If you were listening to Irish media between The Late Debate on Wednesday evening through to Morning Ireland and Pat Kenny yesterday, there was a string of Government and pro-Treaty reps beaming down the phone that the Treaty wouldn't be changed. David Davin Power came on and said "Well, this plays right into the Government's hands"

Which is more important here? I would put up with a messy Treaty for the sake of a serious, specific European growth formula. I couldn't care less how it gets through as long as it gets through, preferably yesterday.

Then it's equally bizarre that you have an issue with whether such a growth formula is tacked onto the Treaty or inserted into it, yet here you are complaining about it.

Why make a messy Treaty by cobbling the two together, as opposed to having a fiscal treaty on the one hand, and a growth treaty on the other?

regards,
Scofflaw

later12

Scofflaw wrote: »

Then it's equally bizarre that you have an issue with whether such a growth formula is tacked onto the Treaty or inserted into it, yet here you are complaining about it.

Do I? I don't recall saying that it must be an revision and not a protocol or anything like that; presumably a protocol would carry the same legal weight.

I'm simply remarking on the short sighted joy of certain politicians and commentators that there was no development on growth which could be anticipated to materialize at this time or before the June summit. As it happens, I would have thought that could have handed an underestimated boost to the Yes campaign in Ireland.

Why make a messy Treaty by cobbling the two together, as opposed to having a fiscal treaty on the one hand, and a growth treaty on the other?

I did say it's probably not particularly relevant nor legally important, if you read back the thread. But Europe is in a crisis, and I think it's unfortunate that more development was not made on growth at this summit, prior to the Greek elections and perhaps worse news on the Spanish cajas later in the month.

Scofflaw

later12 wrote: »

Do I? I don't recall saying that it must be an revision and not a protocol or anything like that; presumably a protocol would carry the same legal weight.

I'm simply remarking on the short sighted joy of certain politicians and commentators that there was no development on growth which could be anticipated to materialize at this time or before the June summit. As it happens, I would have thought that could have handed an underestimated boost to the Yes campaign in Ireland.

I did say it's probably not particularly relevant nor legally important, if you read back the thread. But Europe is in a crisis, and I think it's unfortunate that more development was not made on growth at this summit, prior to the Greek elections and perhaps worse news on the Spanish cajas later in the month.

...but, again, that has nothing to do with whether a growth pact goes into the Treaty or not. Agreeing to put a growth pact into the Fiscal Treaty doesn't speed up the growth pact, it slows down the Fiscal Treaty.

It's entirely reasonable to welcome the end of uncertainty over something we're voting on next week, and certainly does not mean - as you only just claimed - that the people doing the welcoming are glad that a growth pact has been "delayed".

regards,
Scofflaw

later12

except I didn't say "that the people doing the welcoming are glad that a growth pact has been "delayed"."

I said they were delighted there was no change, which gives rise to an odd sort of celebration; I'm not sure they appreciate what they are celebrating. And I asked which is more important: our referendum or European stability. I think it's a little parochial to be so concerned about our a pretty irrelevant referendum as opposed to the scale of the Euro crisis and particularly that which relates to Spain and Greece, which might be cooled by a growth pact.

Perhaps the mentality has been better described in Patrick McCabes line "it'll be a sad day for this town when the world comes to an end".

Scofflaw

later12 wrote: »

except I didn't say "that the people doing the welcoming are glad that a growth pact has been "delayed"."

No, that was in fact where you'd moved your goalposts to from the claim that they were saying "Ha Ha, No Growth, We Win!".

later12 wrote: »

I said they were delighted there was no change,

Um, no, you didn't. See above.

later12 wrote: »

which gives rise to an odd sort of celebration; I'm not sure they appreciate what they are celebrating. And I asked which is more important: our referendum or European stability. I think it's a little parochial to be so concerned about our a pretty irrelevant referendum as opposed to the scale of the Euro crisis and particularly that which relates to Spain and Greece, which might be cooled by a growth pact.

Perhaps the mentality has been better described in Patrick McCabes line "it'll be a sad day for this town when the world comes to an end".

Which suggests...again...that they're welcoming no growth at all. As you initially said, and moved off when that was challenged.

People are not welcoming the idea of no growth. Nor are they welcoming the idea of a delay in a growth strategy. You have now claimed both of those things in quick succession, and moved from one to the other claim depending on which is being challenged.

If you are not arguing either that (a) people are welcoming no growth strategy, or (b) that they're welcoming a delay in creating one, then what are you arguing?

regards,
Scofflaw

later12

Scofflaw wrote: »

If you are not arguing either that (a) people are welcoming no growth strategy, or (b) that they're welcoming a delay in creating one, then what are you arguing?

.

I said they were delighted there was no change, which gives rise to an odd sort of celebration; I'm not sure they appreciate what they are celebrating

K-9

later12 wrote: »

except I didn't say "that the people doing the welcoming are glad that a growth pact has been "delayed"."

I said they were delighted there was no change, which gives rise to an odd sort of celebration; I'm not sure they appreciate what they are celebrating. And I asked which is more important: our referendum or European stability. I think it's a little parochial to be so concerned about our a pretty irrelevant referendum as opposed to the scale of the Euro crisis and particularly that which relates to Spain and Greece, which might be cooled by a growth pact.

Perhaps the mentality has been better described in Patrick McCabes line "it'll be a sad day for this town when the world comes to an end".

I just didn't see it as politically possible to get a pact agreed in 60 days as many on the No side seemed to think, couldn't see it as a runner and just another unrealistic reason to oppose the Treaty.

All for a growth pact, it'll be interesting to see what the compromise is.

cyberhog

K-9 wrote: »

All for a growth pact, it'll be interesting to see what the compromise is.

Berlin Proposes European Special Economic Zones

http://www.spiegel.de/international/europe/german-government-wants-to-create-special-economic-zones-in-europe-a-835224.html

SPD say they won't support the fiscal pact if it doesn't include a financial transaction tax.

Scofflaw

cyberhog wrote: »

Berlin Proposes European Special Economic Zones

http://www.spiegel.de/international/europe/german-government-wants-to-create-special-economic-zones-in-europe-a-835224.html

SPD say they won't support the fiscal pact if it doesn't include a financial transaction tax.

That's a little inaccurate:

“We have nothing against the fiscal compact if there is a growth
pact along side it,” SPD party leader Sigmar Gabriel told German ARD
public television. The SPD is not demanding that the fiscal compact
itself be renegotiated, he made clear.

cordially,
Scofflaw

Ozymandius2011

The haggling of opposition/former opposition parties in other countries over ratification of this Treaty is in sharp contrast to the slavish cooperation of Fianna Fáil. It calls into question whether better terms might have been acheived and may yet be acheived.

cyberhog

Scofflaw wrote: »

That's a little inaccurate:



cordially,
Scofflaw

Good grief, desperate to find an argument, are we?

Frankly, it is impossible to accurately respond to such a vague posting. You'll need to explain in your own words what you think is inaccurate.

Scofflaw

cyberhog wrote: »

Good grief, desperate to find an argument, are we?

Just desperate for accuracy, as ever!

cyberhog wrote: »

Frankly, it is impossible to accurately respond to such a vague posting. You'll need to explain in your own words what you think is inaccurate.

Ah - the quote was that they wouldn't support the Treaty unless a transaction tax was included in it - which suggests it has to go into the body of the Treaty. As I pointed out, they're looking for it to go into a supplementary growth pact.

I wouldn't be so picky were it not that the last best hope of the No side appears to be the claim that the text of the Treaty will be changed (an argument which has never made sense because our amendment would not then apply to it).

cordially,
Scofflaw

cyberhog

Scofflaw wrote: »

Ah - the quote was that they wouldn't support the Treaty unless a transaction tax was included in it - which suggests it has to go into the body of the Treaty.

That is what the SPD floor leader said! "If they aren't in it, then the SPD will not agree to it." I guess you can interpret that how ever you like.

Scofflaw wrote: »

I wouldn't be so picky were it not that the last best hope of the No side appears to be the claim that the text of the Treaty will be changed

cordially,
Scofflaw

Well I can assure you that was not my intention. I was only pointing out what the SPD want in return for their support.