How will a No vote prevent austerity?

hatrickpatrick · 17-05-2012 11:17PM

Scofflaw wrote: »

"Structural balance" rule - sorry, may not have been obvious. Something worth noting, though, is that the 0.5% structural balance rule isn't a limit in quite the same way as the 3% and 60% - it cannot trigger an excessive deficit procedure.

Then you should probably read the implementation decisions: http://ec.europa.eu/economy_finance/economic_governance/sgp/pdf/coc/2012-01-24.pdf

The Stability & Growth Pact is 20 years old - the implementation, and the factors to be taken into consideration, seem vague to you because they're not explicit in the Treaty, but the reason they're not in the Treaty is because they already exist, and the Treaty just refers to them.

cordially,
Scofflaw

But once again I must ask, if that's the case, then what new things does the treaty actually do, apart from setting up the ESM?
If all of those measures are old, what's actually in the treaty that's never been in it before, and how are those old provisions at all relevant? Does the treaty give them new teeth or something?

There must be some substantial new elements in this treaty apart from just restating existing rules, otherwise (a) it wouldn't be such a huge issue, and (b) it wouldn't be important enough to require a referendum.

Scofflaw · 18-05-2012 12:20AM

hatrickpatrick wrote: »

But once again I must ask, if that's the case, then what new things does the treaty actually do, apart from setting up the ESM?

The Fiscal Treaty doesn't set up the ESM - the ESM Treaty does that.

hatrickpatrick wrote: »

If all of those measures are old, what's actually in the treaty that's never been in it before, and how are those old provisions at all relevant? Does the treaty give them new teeth or something?

Excuse the copy and paste of my earlier answer. What's changing is:

1. transposing the fiscal rules into national law
2. creating a national 'correction mechanism'
3. making 1 and 2 subject to a ruling of the CJEU
4. the voting mechanism for determining whether the rules have been breached, which moves from requiring majority to support to requiring a majority to block

Now those are all to do with ensuring countries stick to the rules. The simple one is (4), which just makes it harder for big countries to block excessive deficit procedures, something they were doing with the Stability & Growth Pact.

(1) and (2) are actually rather a bit more subtle and far-reaching than they first appear. They require the transposition of the fiscal rules into national legislation and they require the creation of a national "correction mechanism" which is triggered if we breach the structural balance rule, and they also require us to have the necessary independent institutions to ensure the observance of the rules and the triggering and implementation of the correction mechanism.

We've already done some of this - that's what the Fiscal Advisory Council is for, in part.

hatrickpatrick wrote: »

There must be some substantial new elements in this treaty apart from just restating existing rules, otherwise (a) it wouldn't be such a huge issue, and (b) it wouldn't be important enough to require a referendum.

In some logical counterpart of Ireland, I'm sure that would be the case, but not in this Ireland. The rules for triggering referendums are frankly arcane - two people can read the Crotty judgement and come away with entirely different impressions of what the issue was - and nobody, bar the AG and the government, knows why we're actually having this referendum at all. Certainly the rules have nothing to do with whether something is important - ESM is arguably more important than the Fiscal Treaty, but it hasn't pulled the referendum trigger, while the Fiscal Treaty has.

And as for it not being a huge issue if it didn't contain "substantial new elements"...hah. Sure. Absolutely. No, seriously though, of course it's a huge issue (in Ireland). It's an opportunity for protest in a country that feels let down by national and European leadership, it's a chance to poke Europe in the eye for bailing us out, it's a chance for eurosceptics both foreign and domestic to try and stick a spoke in Europe's wheels, it's an opportunity for publicity equal to the government for all the opposition parties no matter how small, it's an opportunity for every tin foil hat wearing loon to strike a blow against the NWO, it's an opportunity for political rejects to stage a comeback, it's an opportunity to air any and every grievance against the government...the list is endless. Only the relatively jaded state of the electorate prevents this being as big as VAT on children's shoes or the appointment of an AG.

cordially,
Scofflaw

meglome · 18-05-2012 12:23AM

Scofflaw wrote: »

In some logical counterpart of Ireland, I'm sure that would be the case, but not in this Ireland. The rules for triggering referendums are frankly arcane - two people can read the Crotty judgement and come away with entirely different impressions of what the issue was - and nobody, bar the AG and the government, knows why we're actually having this referendum at all. Certainly the rules have nothing to do with whether something is important - ESM is arguably more important than the Fiscal Treaty, but it hasn't pulled the referendum trigger, while the Fiscal Treaty has.

And as for it not being a huge issue if it didn't contain "substantial new elements"...hah. Sure. Absolutely. No, seriously though, of course it's a huge issue (in Ireland). It's an opportunity for protest in a country that feels let down by national and European leadership, it's a chance to poke Europe in the eye for bailing us out, it's a chance for eurosceptics both foreign and domestic to try and stick a spoke in Europe's wheels, it's an opportunity for publicity equal to the government for all the opposition parties no matter how small, it's an opportunity for every tin foil hat wearing loon to strike a blow against the NWO, it's an opportunity for political rejects to stage a comeback, it's an opportunity to air any and every grievance against the government...the list is endless. Only the relatively jaded state of the electorate prevents this being as big as VAT on children's shoes or the appointment of an AG.

cordially,
Scofflaw

Thank you Scofflaw. You are as always the voice of reason.

paddydu · 18-05-2012 12:42AM

I don't know about you lot especially the Irish among us, but I have not so distant past relatives who fought and died for the right to live in an independent Ireland. I am myself centre to right wing in my views and have been that way since a young man, but there is no way I can understand any sense in voting yes!! If you choose to vote yes you will be giving the complete control of our beautiful little country over to Germany and in doing so we will suffer a lot of pain but stretched out over a complete generation maybe a lot longer. I believe it is better that we say no to selling our country and children out and suffer what is coming anyway in one go! If this leads to us leaving the Euro (which may happen anyway) then very quickly we would see growth and Jobs because immediately we would have a devaluation of our currency it would be cheaper straight away for foreign investors to come here ie labour would cost them less selling back out of this country would be extremely competitive and we would have control to print money when needed in a crisis which is needed right now but Germany won't do it! Who we vote for would actually be able to implement their policies which can not be done now as we have seen with Fine Gael and Labour just look at the promises from the last election most have been put on the back burner or ignored all together at the orders of Europe. Argentina and Iceland have gone through similar recent crisis's and now they are among the few countries with growth. So come on get educated and don't listen to fear tactics. I am voting no to this Fiscal Compact for the right to self determination and an Independent Ireland just this time round no one has to give their life to do so!! To think I voted Fine Gael in the last election I am ashamed and feel severely let down, I won't make that mistake again!!
Reply

meglome · 18-05-2012 03:20AM

paddydu wrote: »

I don't know about you lot especially the Irish among us, but I have not so distant past relatives who fought and died for the right to live in an independent Ireland. I am myself centre to right wing in my views and have been that way since a young man, but there is no way I can understand any sense in voting yes!! If you choose to vote yes you will be giving the complete control of our beautiful little country over to Germany and in doing so we will suffer a lot of pain but stretched out over a complete generation maybe a lot longer. I believe it is better that we say no to selling our country and children out and suffer what is coming anyway in one go! If this leads to us leaving the Euro (which may happen anyway) then very quickly we would see growth and Jobs because immediately we would have a devaluation of our currency it would be cheaper straight away for foreign investors to come here ie labour would cost them less selling back out of this country would be extremely competitive and we would have control to print money when needed in a crisis which is needed right now but Germany won't do it! Who we vote for would actually be able to implement their policies which can not be done now as we have seen with Fine Gael and Labour just look at the promises from the last election most have been put on the back burner or ignored all together at the orders of Europe. Argentina and Iceland have gone through similar recent crisis's and now they are among the few countries with growth. So come on get educated and don't listen to fear tactics. I am voting no to this Fiscal Compact for the right to self determination and an Independent Ireland just this time round no one has to give their life to do so!! To think I voted Fine Gael in the last election I am ashamed and feel severely let down, I won't make that mistake again!!
Reply

Congratulations you've listed off a load of reasons for things that are not in the treaty or have nothing to do with the treaty. Oh and things that are not remotely factual.

Also I'm amused you've done this while telling us all to "get educated and don't listen to fear tactics".

Fussgangerzone · 18-05-2012 10:22AM

I'm voting no in the referendum.

How will a No Vote prevent austerity?
It won't, nobody is saying it is, that looks like a straw man to me.
We are already in austerity.

The "No to Austerity" argument is this: A Yes Vote will lead to more austerity.

There, simple. Answered your question.

The hows, whys, rights and wrongs of that argument and it's counterpart are already covered elsewhere on these boards.

Craven99 · 18-05-2012 10:29AM

Not that I think an actual Yes vote will actually change that much in anycase - I think its more our arcane way of dealing with these sort of things through referendi more than any substantial changes (Scofflaw verbilises this MUCH better than I ever could)
BUT I would vote Yes anyway - and mostly because I do not believe that this Irish government, the last, any any future one I can see in the short term simply do not have the skills to manage the counrty properly.

beeftotheheels · 18-05-2012 10:30AM

Fussgangerzone wrote: »

The "No to Austerity" argument is this: A Yes Vote will lead to more austerity.

There, simple. Answered your question.

How so? "A Yes vote will lead to more austerity" is about as much an answer as "A Yes vote will see the end of the toothfairy".

Please explain how a yes vote will lead to more austerity.

Godge · 18-05-2012 10:41AM

Fussgangerzone wrote: »

I'm voting no in the referendum.

How will a No Vote prevent austerity?
It won't, nobody is saying it is, that looks like a straw man to me.
We are already in austerity.

The "No to Austerity" argument is this: A Yes Vote will lead to more austerity.

There, simple. Answered your question.

The hows, whys, rights and wrongs of that argument and it's counterpart are already covered elsewhere on these boards.

Here is my view. There is more austerity coming. Fact.

A "Yes" vote will therefore lead to more austerity.
Equally, a "No" vote will also lead to more austerity.

However, I believe that a "No" vote will lead to more austerity than a "Yes" vote because of investor confidence. Both real investors (multi-national companies) and bond investors (financiers) will lack confidence in Ireland's ability to manage itself outside the confines of Stability Pact and probably outside of the Euro. This is with good reason based on how we have managed ourselves in the past. As a result, there will be little or no investment in Ireland leading to another recession and borrowing on the markets will require paying interest rates above 10%. As a result, draconican measures on tax, social welfare and public services (including pay) would then be needed.

A bit of me is so annoyed by the ignorance of the "No" side around the issue of what will happen if we vote "No" that it is wishing for a "No" vote even though it could create events that would wreck the country for generations.

Fussgangerzone · 18-05-2012 10:47AM

beeftotheheels wrote: »

How so? "A Yes vote will lead to more austerity" is about as much an answer as "A Yes vote will see the end of the toothfairy".

Please explain how a yes vote will lead to more austerity.

I'm just explaining what the argument actually is, and pointing out what I see as the deliberately misleading OP.

My 2 personal reasons for agreeing with the argument are:

Under the ESM, we would have automatically triggered mechanisms in the even of a too-great structural deficit. In practice, and based on current form, I read this as "cut like a motherhubbard"
More generally, I believe the ESM fits fully with the momentum of current EU policy regarding debt. That is to say, it will be a failure. As such, we as Europeans need to do what we can to halt this momentum of cut-only economic reform, and move for policies which prioritise growth.

Fussgangerzone · 18-05-2012 11:05AM

Godge wrote: »

However, I believe that a "No" vote will lead to more austerity than a "Yes" vote because of investor confidence. Both real investors (multi-national companies) and bond investors (financiers) will lack confidence in Ireland's ability to manage itself outside the confines of Stability Pact and probably outside of the Euro. This is with good reason based on how we have managed ourselves in the past. As a result, there will be little or no investment in Ireland leading to another recession and borrowing on the markets will require paying interest rates above 10%. As a result, draconican measures on tax, social welfare and public services (including pay) would then be needed.

A bit of me is so annoyed by the ignorance of the "No" side around the issue of what will happen if we vote "No" that it is wishing for a "No" vote even though it could create events that would wreck the country for generations.

Have you any evidence that that will happen? Have you a quote by anyone outside Ireland saying that not ratifying would put us in a place where we wouldn't get help if we really needed it?

antoobrien · 18-05-2012 11:30AM

Fussgangerzone wrote: »

I'm voting no in the referendum.

How will a No Vote prevent austerity?
It won't, nobody is saying it is, that looks like a straw man to me.
We are already in austerity.

Going by this statement from SF, they are.

“The extra €6 billion of cuts and tax increases arising from the Austerity Treaty will further damage the domestic economy. This will hurt the small and medium sized sector particularly hard leading to more job losses.

“At the same time the Austerity Treaty will lead to a Eurozone wide contraction as all 17 member states will seek to meet its harsh deficit targets. This will hurt our exports, already experiencing a decline.

There is no call in the treaty for cuts that have not already been agreed with the troika. Due to the situation we have been in since 2008, under this treaty we get until 2019 to meet the targets that the no side believe will happen in 2015.

To achieve this it is planned that there will be a further €8.6 billion of expenditure cuts and tax increases spread over the next three budgets. The ‘No’ campaign has focused on the post-2015 period and claimed that adhering to the debt brake rule will force further cuts of up to €5 billion a year. This is not true.

When a country leaves the Excessive Deficit Procedure, they will enter a three-year transition period before the debt brake rule applies. Ireland will be in this three-year phase from 2016 to 2018 so it will actually be 2019 before the debt brake applies to us. Even if the rule did not exist we would need to bring the debt ratio down as a country cannot persist in having a debt ratio above 100pc of GDP.

oscarBravo · 18-05-2012 11:35AM

Fussgangerzone wrote: »

Have you a quote by anyone outside Ireland saying that not ratifying would put us in a place where we wouldn't get help if we really needed it?

http://www.irishtimes.com/newspaper/finance/2012/0428/1224315295778.html

IRELAND COULD see its cost of borrowing soar once more if the referendum on the fiscal treaty is defeated, rating agency Standard Poor’s warned...

Fussgangerzone · 18-05-2012 11:46AM

antoobrien wrote: »

Going by this statement from SF, they are.

Fair enough, but as far I'm concerned, SF are one big straw man in any fight they join. Not going to bother defending them.

Amtmann · 18-05-2012 12:58PM

This thread is unintentionally hilarious. It's pretty clear that everyone who intends to vote no is either uninformed, or speculating that the unknown consequences won't be that unpleasant, or are otherwise going off on a tangent that's unrelated to the treaty.

Fussgangerzone · 18-05-2012 01:17PM

oscarBravo wrote: »

http://www.irishtimes.com/newspaper/finance/2012/0428/1224315295778.html

IRELAND COULD see its cost of borrowing soar once more if the referendum on the fiscal treaty is defeated, rating agency Standard Poor’s warned...

It also says that they think there's a one-in-three chance. Meaning it probably won't happen, by their calculations.

RandomName2 · 18-05-2012 02:11PM

Eliot Rosewater wrote: »

So I'm a bit bemused. Can anyone explain how the vote No to austerity argument works?

Isn't the argument that a yes vote would institutionalise austerity as it would limit things like public spending (public debt to gpa ratio)? I can't imagine that they are arguing that austerity would disappear if we votes no...

SeanW · 18-05-2012 02:30PM

beeftotheheels wrote: »

The ESM is not above the law. It is a construct of the law. Yes the ESM treaty grants it immunity from certain spurious litigation. But it is an EU Institution and it is not above the core EU laws in the TEU and TFEU, nor is the jurisdiction of the CJEU excluded (read Article 37 on dispute resolution).

The ESM may have a few precious safeguards like the one you mentioned but by and large it and its senior officers are totally above the law.

It cannot be sued by anyone, it cannot be audited by anyone and officers of the organisation are granted absolute legal immunity from any crimes committed in an official capacity.

But on the other side of the coin it can sue anyone, anytime, for any reason and can demand as much money as it likes, from any government at any time.

That's a pretty powerful organisation!

View · 18-05-2012 04:27PM

SeanW wrote: »

The ESM may have a few precious safeguards like the one you mentioned but by and large it and its senior officers are totally above the law.

It cannot be sued by anyone, it cannot be audited by anyone and officers of the organisation are granted absolute legal immunity from any crimes committed in an official capacity.

But on the other side of the coin it can sue anyone, anytime, for any reason and can demand as much money as it likes, from any government at any time.

That's a pretty powerful organisation!

You appear not to have read the ESM Treaty.

Articles 28, 29 & 30 allow for auditing the ESM.

Article 37 deals with legal disputes/interpretation issues (and article 37.3 explicitly allows for disputes to be referred to the ECJ for binding judgments).

And the immunity articles are similar to those that the EU (and other international) bodies have when carrying out their assigned tasks. You do realise this isn't some sort of new legal innovation just thought up for the ESM, don't you?

Scofflaw · 18-05-2012 05:04PM

Fussgangerzone wrote: »

I'm just explaining what the argument actually is, and pointing out what I see as the deliberately misleading OP.

My 2 personal reasons for agreeing with the argument are:
Under the ESM, we would have automatically triggered mechanisms in the even of a too-great structural deficit. In practice, and based on current form, I read this as "cut like a motherhubbard"

More generally, I believe the ESM fits fully with the momentum of current EU policy regarding debt. That is to say, it will be a failure. As such, we as Europeans need to do what we can to halt this momentum of cut-only economic reform, and move for policies which prioritise growth.

That should be "Fiscal Treaty", not ESM in both those.

cordially,
Scofflaw

Eliot Rosewater · 18-05-2012 06:45PM

Fussgangerzone wrote: »

How will a No Vote prevent austerity?
It won't, nobody is saying it is, that looks like a straw man to me.

My OP contained a picture of Gerry Adams holding a booklet entitled "Austerity isn't working: vote no". There is a clear implication there that voting "no" will stop or undo austerity.

Fussgangerzone wrote: »

It also says that they think there's a one-in-three chance. Meaning it probably won't happen, by their calculations.

That's, unfortunately, not how statistics work. In this case one would calculate the expected increase in the interest rate which is (probability interest rises)*(interest rate rise) = (1/3)(something positive) = (something positive). Look at it the other way: they're saying that if we vote No we certainly won't be in a better position, but could be in a worse position. Therefore there is no chance we will actually gain something from a No vote.

RandomName2 wrote: »

Isn't the argument that a yes vote would institutionalise austerity as it would limit things like public spending (public debt to gpa ratio)? I can't imagine that they are arguing that austerity would disappear if we votes no...

It is and it isn't. The posters and the leaflets contain the implication that voting No will stop the current austerity measures. The claim is that austerity isn't working now and that a No vote will change that now. It isn't posed as a problem that will only be relevent the next time we are confronted with economic decline: the posters are phrased in the present tense.

So whatever the theoretical underpinnings of the campaign are it is a de facto campaign against contemporary austerity because of the way it is being presented, in my opinion.

And even on the theoretical angle: I'm not sure one could convincingly argue that the treaty implies future austerity. If governments who ratify it took Keynes' advice and actually saved during economic good times, the debt issue wouldn't appear as there would be a cushion to fall back on during recessions. And by the time the cushion ran out, the country would presumably satisfy the emergency status.

NoAnimalID · 18-05-2012 06:47PM

Ireland must go the Icelandic way.

The Irish government should demand the removal of the clause in the bail out agreement requiring Ireland to sign up but to increase our contribution to this ESM.

The government should also demand to null the clause in its agreements for the bank bail outs that requires Ireland to reduce pension, salaries, and all kinds of social assistance in order to keep on buying german and french bondholders.

Eliot Rosewater · 18-05-2012 06:54PM

Interestingly, the anarchist Workers Socialist Movment, though advocating a No vote, argue that the rest of the Left is wrong: voting No won't stop austerity.

We say this because there is no suggestion that if the referendum is voted down austerity will be halted.

http://anarchism.pageabode.com/andrewnflood/controversy-wsm-position-austerity-treaty

meglome · 18-05-2012 07:01PM

NoAnimalID wrote: »

Ireland must go the Icelandic way.

The Irish government should demand the removal of the clause in the bail out agreement requiring Ireland to sign up but to increase our contribution to this ESM.

The government should also demand to null the clause in its agreements for the bank bail outs that requires Ireland to reduce pension, salaries, and all kinds of social assistance in order to keep on buying german and french bondholders.

So mostly nothing to do with the actual contents of this treaty then. (and not to mention factually incorrect)

Stabshauptmann · 18-05-2012 07:03PM

Godge wrote: »

sorry, do you mean that if we vote no, we could somehow force taxpayers in the rest of Europe to pay for the debts that we have run up? Are you having a laugh? Seriously, who would pay for the write-down? The Germans? The Greeks? Somebody would have to pay and ultimately that is the failure of the "No" campaign on this sort of thing, they have absolutely no clue as to who would pay up for our budget deficits if we voted no.

The thing is, the bank debt shouldnt be "ours" in the first place.
We have spent approx €50bn bailing out the banks (not including the cost of NAMA) to date, and mooted spending another €30bn.

The Troika bailout was €65bn, anyone who cant see the connection between the bank bailout and the Irish bailout is blind.

So the question is, who should pay for the bank bailout. I dont think it should be the Irish people. We are the last poor schmucks in a ponzi scheme.

We are being forced to pay unsecured bondholders of Anglo - people who expect not to get paid in a bankruptcy because those bondholders are UK, German, French etc. banks and if Anglo defaulted those governments might have to bailout their own banks.

Yes Irish banks made huge mistakes when it came to lending, but so to did the european banks who lent to them! Its a pan European problem, which needs a pan european response. Not just lump the Irish with the bill, imHo.

Stabshauptmann · 18-05-2012 07:05PM

Eliot Rosewater wrote: »

My OP contained a picture of Gerry Adams holding a booklet entitled "Austerity isn't working: vote no". There is a clear implication there that voting "no" will stop or undo austerity.

I dont see that implication myself.
I agree that Austerity isnt working, and do not want to increase the levels of Austerity by agreeing to stricter budget deficit rules

Eliot Rosewater · 18-05-2012 07:53PM

Stabshauptmann wrote: »

I dont see that implication myself.
I agree that Austerity isnt working, and do not want to increase the levels of Austerity by agreeing to stricter budget deficit rules

I think the implication is pretty obvious. "Austerity is bad" implies "vote No" means that voting No will somehow lessen the affect of the badness, austerity.

But this wheels us back to the question of the thread: how will voting No lead to less austerity than voting Yes? The question is not "will voting Yes lead to austerity?". For the No vote argument to work one must demonstrate that voting Yes will lead to more austerity than if we vote No.

I understand that if we vote Yes we won't be able to borrow as much as we please, but if we vote No, how will this enable us to borrow as much as we please? From whom will we borrow?

NoAnimalID · 18-05-2012 08:10PM

And the rest of the message from that German bank : "So you had better vote for the fiscal pact in the referendum on May 31 so that you can have another bailout if you need one". Achtung, Baby.

Ireland's whole economy is based on its corporate tax rate which only serves to syphon tax revenues from its neighbors. I wouldn't give Ireland any more while this situation continues. Although I expect the Germans will make Ireland snap its tax rates into line in exchange for keeping the Euro afloat.

ardmacha · 18-05-2012 08:18PM

This is the basic premise of the NO vote

That they won't let us shoot ourselves!

The Waltzing Consumer · 18-05-2012 08:36PM

NoAnimalID wrote: »

And the rest of the message from that German bank : "So you had better vote for the fiscal pact in the referendum on May 31 so that you can have another bailout if you need one". Achtung, Baby.

Ireland's whole economy is based on its corporate tax rate which only serves to syphon tax revenues from its neighbors. I wouldn't give Ireland any more while this situation continues. Although I expect the Germans will make Ireland snap its tax rates into line in exchange for keeping the Euro afloat.

So more nonsense. :rolleyes:

A poster rightly challenged your other post in this thread. Are you going to bother replying to him/her or does it go

1) make a statement
2) statement is challenged by another poster showing it to be wrong and unreleated
3) Ignore the rebuttal
4) Make new ill informed and incorrect statement
5) Repeat step 2 to 4.

How will a No vote prevent austerity?

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