Connection between ESM and the Fiscal treaty not legally binding?

Stabshauptmann · 30-05-2012 08:54PM #1

Can you please clarify "ESM access - access to the ESM bailout fund is legally dependent on ratifying the Fiscal Treaty. While it might be possible to find some way around the legal requirement to allow Ireland continued programme funding, it would be subject to legal challenges and political uncertainty."

My understanding is that the ESM Treaty has not yet been ratified (though we have signed it, we need to pass legislation to ratify it. Same with other countries. And all the EU member states will need to unanimously agree to amend Articles 121, 126 and 136 of the Treaty on the Functioning of the European Union.

So, basically, the rules around the ESM have not yet been set in stone.

The European Stability Mechanism Treaty is a separate treaty from the Fiscal Stability Treaty and is not the subject of the referendum in Ireland. Each Treaty does refer to the other. Each has a recital which states that assistance from the ESM from 1 March 2013 will be dependent on the country concerned having ratified the Fiscal Stability Treaty.

But recitals are only concise reasons for the chief provisions of the enacting terms, they are not themselves enacting terms, right? The actual enacting terms of the ESM Treaty say if indispensable to safeguard the financial stability of the euro area as a whole and of its Member States, the ESM may provide stability support to an ESM Member subject to strict conditionality, appropriate to the financial assistance instrument chosen. Such conditionality may range from a macro-economic adjustment programme to continuous respect of pre-established eligibility conditions.

Would someone be kind enough to point me in the direction of what those pre-established eligibility conditions are because I cant find them in the treaty?

Kind of 11th hour question here, but are we 100% sure we wont be able to access ESM funding if we vote no tomorrow?

Godge · 30-05-2012 11:01PM

Stabshauptmann wrote: »

Kind of 11th hour question here, but are we 100% sure we wont be able to access ESM funding if we vote no tomorrow?

Yes

Stabshauptmann · 30-05-2012 11:21PM

Cheers that was of no use, but I'm sure you feel very smart. Congrats!

beeftotheheels · 30-05-2012 11:27PM

Stabshauptmann wrote: »

Cheers that was of no use, but I'm sure you feel very smart. Congrats!

We cannot be 100% certain of anything about the future.

We cannot be 100% certain that it won't snow tomorrow although most experienced meteorologists don't think it likely.

All the evidence indicates that we are much more likely to be able from the ESM on preferable terms (should we need it) if we vote yes.

But nothing in the future can be 100% guaranteed, it is not guaranteed that we will need a second bail out if things go well, on the other hand it is not guaranteed that the euro will still exist in 2014 if events in Greece and Spain overtake it.

We just have to make the best decision we can, at the time we're making it, based on the best information available at that time.

Stabshauptmann · 30-05-2012 11:53PM

beeftotheheels wrote: »

All the evidence indicates that we are much more likely to be able from the ESM on preferable terms (should we need it) if we vote yes.

What "evidence"?

We know that the Germans want to connection to be made between the ESM and the Fiscal treaty. The "pre-condition" of ratifying the Fiscal treaty was inserted into the preamble of both treaties at the German behest.

And we expect the ESM treaty to be ratified in its current form.

Everything after that is intuition. Neither the ESM nor Fiscal treaty's enacting terms require the Fiscal treaty to be ratified in order to access ESM funding. It is a German threat without legal weight from what I can see, and I dont believe it.

Stabshauptmann · 30-05-2012 11:58PM

The only connection I can see between the Fiscal/Stability treaty and the ESM treaty is in the recitals of both treaties.

Recitals are only insights into what the writers of a treaty are thinking. They are rationales and explanations. They are not enacting terms, they are not law. They are the equivalent to the Minister's speech when he introduces an Act into parliament, words without weight.

My first thoughts were that surely there is some legal agreement detailing the connection and I just cant find it.

Then I found from my searches this doozie from the RTE website's guide to the referendum .

"Since the connection between the ESM and ratifying the Fiscal Treaty is in the preamble (i.e. the recitals) of the Treaty and not an article in the main body of the Treaty, does this make it less legally binding? Not according to officials who insist it is a clear part of the treaty and represents a clear statement of the intention of the contracting parties."

It doesnt really answer the very important question! Whether or not ratification of this treaty is required to access the ESM is legally ambiguous as far as I can see.

If it has been made legally clear somewhere, could someone please point me in that direction / explain the connection?

What the ESM treaty actually says is that if indispensable to safeguard the financial stability of the euro area as a whole and of its Member States, the ESM may provide stability support to an ESM Member subject to strict conditionality, appropriate to the financial assistance instrument chosen. Such conditionality may range from a macro-economic adjustment programme to continuous respect of pre-established eligibility conditions.

I can see people should be voting on whats actually in the treaty, not on how it may be related to the ESM.

Paparazzo · 30-05-2012 11:59PM

Stabshauptmann wrote: »

Cheers that was of no use, but I'm sure you feel very smart. Congrats!

Look forward to reading your summary of the fiscal compact referendum

Scofflaw · 31-05-2012 12:01AM

Stabshauptmann wrote: »

Can you please clarify "ESM access - access to the ESM bailout fund is legally dependent on ratifying the Fiscal Treaty. While it might be possible to find some way around the legal requirement to allow Ireland continued programme funding, it would be subject to legal challenges and political uncertainty."

My understanding is that the ESM Treaty has not yet been ratified (though we have signed it, we need to pass legislation to ratify it. Same with other countries. And all the EU member states will need to unanimously agree to amend Articles 121, 126 and 136 of the Treaty on the Functioning of the European Union.

No, only Article 136 - and that's an important point, because the Articles which are supposed to render ESM legally questionable (122 and 125) are not being amended. That being the case, those articles don't render ESM illegal, which means that ESM is permitted, and does not require the Article 136 amendment.

Stabshauptmann wrote: »

So, basically, the rules around the ESM have not yet been set in stone.

The European Stability Mechanism Treaty is a separate treaty from the Fiscal Stability Treaty and is not the subject of the referendum in Ireland. Each Treaty does refer to the other. Each has a recital which states that assistance from the ESM from 1 March 2013 will be dependent on the country concerned having ratified the Fiscal Stability Treaty.

But recitals are only concise reasons for the chief provisions of the enacting terms, they are not themselves enacting terms, right? The actual enacting terms of the ESM Treaty say if indispensable to safeguard the financial stability of the euro area as a whole and of its Member States, the ESM may provide stability support to an ESM Member subject to strict conditionality, appropriate to the financial assistance instrument chosen. Such conditionality may range from a macro-economic adjustment programme to continuous respect of pre-established eligibility conditions.

Would someone be kind enough to point me in the direction of what those pre-established eligibility conditions are because I cant find them in the treaty?

No, it's a mistake to think that the recitals aren't legally effective. The Treaty states in a couple of places that access to ESM is subject to 'strict conditionality'. A Treaty recital is a guide to the intentions of the Treaty's creators, and has legal force as such, since interpretations of treaties take into account those intentions. In this case, then, the condition for Fiscal Treaty ratification in the recital is a specific condition clearly intended by the creators, and given force by the requirements for strict conditionality in the main text.

Stabshauptmann wrote: »

Kind of 11th hour question here, but are we 100% sure we wont be able to access ESM funding if we vote no tomorrow?

Eh, 99%+, I guess. The future is the future, after all.

cordially,
Scofflaw

Scofflaw · 31-05-2012 12:03AM

Stabshauptmann wrote: »

Can you please clarify "ESM access - access to the ESM bailout fund is legally dependent on ratifying the Fiscal Treaty. While it might be possible to find some way around the legal requirement to allow Ireland continued programme funding, it would be subject to legal challenges and political uncertainty."

My understanding is that the ESM Treaty has not yet been ratified (though we have signed it, we need to pass legislation to ratify it. Same with other countries. And all the EU member states will need to unanimously agree to amend Articles 121, 126 and 136 of the Treaty on the Functioning of the European Union.

No, only Article 136 - and that's an important point, because the Articles which are supposed to render ESM legally questionable (122 and 125) are not being amended. That being the case, those articles don't render ESM illegal, which means that ESM is permitted, and does not require the Article 136 amendment.

Stabshauptmann wrote: »

So, basically, the rules around the ESM have not yet been set in stone.

The European Stability Mechanism Treaty is a separate treaty from the Fiscal Stability Treaty and is not the subject of the referendum in Ireland. Each Treaty does refer to the other. Each has a recital which states that assistance from the ESM from 1 March 2013 will be dependent on the country concerned having ratified the Fiscal Stability Treaty.

But recitals are only concise reasons for the chief provisions of the enacting terms, they are not themselves enacting terms, right? The actual enacting terms of the ESM Treaty say if indispensable to safeguard the financial stability of the euro area as a whole and of its Member States, the ESM may provide stability support to an ESM Member subject to strict conditionality, appropriate to the financial assistance instrument chosen. Such conditionality may range from a macro-economic adjustment programme to continuous respect of pre-established eligibility conditions.

Would someone be kind enough to point me in the direction of what those pre-established eligibility conditions are because I cant find them in the treaty?

No, it's a mistake to think that the recitals aren't legally effective. The Treaty states in a couple of places that access to ESM is subject to 'strict conditionality'. A Treaty recital is a guide to the intentions of the Treaty's creators, and has legal force as such, since interpretations of treaties take into account those intentions. In this case, then, the condition for Fiscal Treaty ratification in the recital is a specific condition clearly intended by the creators, and given force by the requirements for strict conditionality in the main text.

Stabshauptmann wrote: »

Kind of 11th hour question here, but are we 100% sure we wont be able to access ESM funding if we vote no tomorrow?

Eh, 99%+, I guess. The future is the future, after all.

cordially,
Scofflaw

Scofflaw · 31-05-2012 12:07AM

Stabshauptmann wrote: »

The only connection I can see between the Fiscal/Stability treaty and the ESM treaty is in the recitals of both treaties.

Recitals are only insights into what the writers of a treaty are thinking. They are rationales and explanations. They are not enacting terms, they are not law. They are the equivalent to the Minister's speech when he introduces an Act into parliament, words without weight.

My first thoughts were that surely there is some legal agreement detailing the connection and I just cant find it.

Then I found from my searches this doozie from the RTE website's guide to the referendum .

"Since the connection between the ESM and ratifying the Fiscal Treaty is in the preamble (i.e. the recitals) of the Treaty and not an article in the main body of the Treaty, does this make it less legally binding? Not according to officials who insist it is a clear part of the treaty and represents a clear statement of the intention of the contracting parties."

It doesnt really answer the very important question! Whether or not ratification of this treaty is required to access the ESM is legally ambiguous as far as I can see.

If it has been made legally clear somewhere, could someone please point me in that direction / explain the connection?

What the ESM treaty actually says is that if indispensable to safeguard the financial stability of the euro area as a whole and of its Member States, the ESM may provide stability support to an ESM Member subject to strict conditionality, appropriate to the financial assistance instrument chosen. Such conditionality may range from a macro-economic adjustment programme to continuous respect of pre-established eligibility conditions.

I can see people should be voting on whats actually in the treaty, not on how it may be related to the ESM.

Here you go:

No provision of the European Stability Mechanism Treaty has received more attention, and indeed has been the subject such vexed political rhetoric. The final draft of the Treaty was amended to insert into the recital section a provision making access to the ESM conditional on ratifying the Fiscal Treaty. I first noted some confusion in Sinn Fein’s position when Deputy Pearse Doherty appeared vexed in a recent Dail debate as to why the requirement is placed in the recital (preambular section) of the Treaty and questioned whether it actually was a legal obligation. This claim was reiterated yesterday by a statement by Sinn Fein, which claimed that Articles 3 and 12, and not the recital, were the grounds of Ireland’s obligation. As a result the Board of the ESM would be free to lend to us if necessary to preserve the stability of the Eurozone.

Significantly, Deputy Doherty’s statement in the Dail relied on a European Court of Justice ruling that recitals cannot ground obligations. However, in doing so he was incorrectly using EU law rather than public international law, which governs this intergovernmental treaty. There is not doubt that it is not a clause of the Treaty, and not a fresh obligation. Instead the recital functions as a specific example of the power to impose conditions on bailouts given to the ESM in Article 3. It fills out the interpretation of that Article, with the result that legally the ESM cannot give us funding without ratification. This reflects a common position in public international law which, when interpreting treaties, values not merely the text, but also the purposes for which the Treaty was laid down. A preamble in an intergovernmental treaty is given such a role in interpretation of the under Article 31(2) of the Vienna Convention of the Law of Treaties. The interpretation is further supported by the fact virtually ever State made it clear their intention was to establish such conditionality.

http://www.humanrights.ie/index.php/2012/05/22/that-other-treaty-ratifying-the-european-stability-mechanism-treaty/

I'm afraid it's not "legally ambiguous" - it's "legally misunderstood".

cordially,
Scofflaw

beeftotheheels · 31-05-2012 12:11AM

Stabshauptmann wrote: »

It is a German threat without legal weight from what I can see, and I dont believe it.

Not true. Art 31 of The Vienna Convention on the Laws of Treaties tells us that where there is any ambiguity in the text of an operative provision of a treaty (such as the bail-out provision in the ESM) then recourse should be had to the preamble to determine what the parties intended.

SECTION 3. INTERPRETATION OF TREATIES

Article 31

General rule of interpretation

1. A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.
2. The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble and annexes:
(a) any agreement relating to the treaty which was made between all the parties in connection with the conclusion of the treaty;
(b) any instrument which was made by one or more parties in connection with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty.
3. There shall be taken into account, together with the context:
(a) any subsequent agreement between the parties regarding the interpretation of the treaty or the
application of its provisions;
(b) any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation;
(c) any relevant rules of international law applicable in the relations between the parties.
4. A special meaning shall be given to a term if it is established that the parties so intended.

So Art 31 clearly suggests that if there is any ambiguity in the operative provision that recourse can be had to the preamble, the public discussions on this by the contracting parties i.e. Governments etc.

The Good Faith clause is also tricky if we vote no, as Sinn Féin advocate, in a game of chicken because that is not acting in Good Faith.

So on to the ESM Treaty

ARTICLE 3
Purpose
The purpose of the ESM shall be to mobilise funding and provide stability support under strict conditionality, appropriate to the financial assistance instrument chosen, to the benefit of ESM Members which are experiencing, or are threatened by, severe financing problems, if indispensable to safeguard the financial stability of the euro area as a whole and of its Member States. For this purpose, the ESM shall be entitled to raise funds by issuing financial instruments or by entering into financial or other agreements or arrangements with ESM Members, financial institutions or other third parties.

You'll note that "strict conditionality" is not defined, and therefor is ambiguous enough to invoke Art 31 of the Vienna Convention (and thus TSCG ratification).

CHAPTER 4
OPERATIONS
ARTICLE 12
Principles
1. If indispensable to safeguard the financial stability of the euro area as a whole and of its Member States, the ESM may provide stability support to an ESM Member subject to strict conditionality, appropriate to the financial assistance instrument chosen. Such conditionality may range from a macro-economic adjustment programme to continuous respect of pre-established eligibility conditions.

Again with the conditionality and pre-established eligibility conditions invoking Art 31

So yes, it is not 100% set in stone and a Court (the Court of Justice being the only Court that could hear the case) could conclude otherwise. But all the evidence points to ratification of the TSCG being a prerequisite of ESM access, and we would need to be prepared to take a case to force the point, bearing in mind that the German Government would likely be subject to litigation in the German Constitutional Court if they agreed to waive this condition, for us, in a game of chicken we instigated.

Any such case that we'd take, would be caught up in litigation for months if not years, time we wouldn't have if we were already in the position of needing a second bail-out.

Stabshauptmann · 31-05-2012 12:45AM

Paparazzo wrote: »

Look forward to reading your summary of the fiscal compact referendum

I was only referring to Godge's reply

Stabshauptmann · 31-05-2012 12:48AM

Scofflaw, beeftotheheels I know its late, and I do appreciate such detailed answers. International law, not EU law. Cheers. Though that is a little confusing considering the impact it has on EU laws.

beeftotheheels, I presume you refer to the International Court of Justice, not the Court of Justice of the European Union?

beeftotheheels · 31-05-2012 06:37AM

Stabshauptmann wrote: »

Scofflaw, beeftotheheels I know its late, and I do appreciate such detailed answers. International law, not EU law. Cheers. Though that is a little confusing considering the impact it has on EU laws.

beeftotheheels, I presume you refer to the International Court of Justice, not the Court of Justice of the European Union?

No, the Court of Justice of the European Union which hears all cases on disputes between Member States in relation to areas falling within the EU's competency.

If there's no ambiguity as to the text of the operative provision, then recourse cannot be had to the preamble. In that respect it is true to say that the preamble carries less weight than the treaty text.

But here there clearly is ambiguity in the operative provisions, and the intention of the parties as evidenced by both the preamble and their public statements on the matter, is to make ESM access conditional on TSCG ratification. That is the clear intention of the parties.

The Vienna Convention on this codifies Customary International Law (the rules as already understood by everyone) and thus forms part of the jurisprudence of the Court of Justice of the EU.

All of the public musings my the contracting parties, including the inclusion of the provision in the preamble, have created a legitimate expectation for everyone (except SF) that ESM access will be restricted to those Members who have ratified the TSCG.

Stabshauptmann · 31-05-2012 11:35AM

But the counter argument would be that if they wanted it to be essential, they would have put the condition in the enacting terms.

In fact, if the signatories came forward later on and said it was only a desire, not a condition, there would be no legal hurdles to jump to make it so. There would be no reason to refer it to the Court of Justice, if everyone agreed to bail out a country that didnt ratify the Fiscal treaty.

I get that this is not an EU treaty, but it does involve EU institutions and interact with existing EU treaties, and you're telling me it would be refered to the EU Court of Justice should a dispute arise. Forgive me, but it seems to me that a European Court of Justice ruling that recitals cannot ground obligations could indeed become relevant.

The thing about courts is that their outcomes are not always certain, so to me its not unfair to say there is a small amount of ambiguity. Had they stipulated what the eligibility conditions were in the enacting terms there would be none.

And SF are not the only people to ask this question.

oscarBravo · 31-05-2012 11:42AM

I'm not getting the line of argument. It seems to me that the same people are arguing that a 'yes' vote won't guarantee us access to ESM funding, and also that a 'no' vote might not deny us access to ESM funding.

Following that argument through, a 'no' vote followed by a court case might lead to the same situation as a 'yes' vote - or it might not.

So why is this an argument for a 'no'?

beeftotheheels · 31-05-2012 11:43AM

Stabshauptmann wrote: »

But the counter argument would be that if they wanted it to be essential, they would have put the condition in the enacting terms.

In fact, if the signatories came forward later on and said it was only a desire, not a condition, there would be no legal hurdles to jump to make it so. There would be no reason to refer it to the Court of Justice, if everyone agreed to bail out a country that didnt ratify the Fiscal treaty.

I get that this is not an EU treaty, but it does involve EU institutions and interact with existing EU treaties, and you're telling me it would be refered to the EU Court of Justice should a dispute arise. Forgive me, but it seems to me that a European Court of Justice ruling that recitals cannot ground obligations could indeed become relevant.

The thing about courts is that their outcomes are not always certain, so to me its not unfair to say there is a small amount of ambiguity. Had they stipulated what the eligibility conditions were in the enacting terms there would be none.

And SF are not the only people to ask this question.

But they haven't come out and stated that it was an aspiration, they have all stated that it is a condition. They furthermore have not enunciated the other conditions in the operative provisions, so it is entirely consistent that this one was not included.

Recitals cannot ground obligations only if there is no reason to have recourse to that recital - which is clearly not the case here.

You are of course correct that no one can tell for certain how any Court will rule on the matter until such Court rules.

However, one can express an opinion as to the likelihood of any ruling going against us, and I would put that likelihood as in and around 70%.

SF, by contrast, seem intent on telling people that where there is any doubt (and if we're to be honest there is always doubt as to the future) then that doubt, no matter how small, means that there is not a problem.

There clearly is a problem with voting no and assuming ESM access, it may be possible, but it is unlikely and undoubtedly going to result in litigation, either from us to get that access or from German taxpayers seeking to deny us that access.

Scofflaw · 31-05-2012 11:49AM

Stabshauptmann wrote: »

But the counter argument would be that if they wanted it to be essential, they would have put the condition in the enacting terms.

Not really, because the preamble has legal weight, and no other conditions are specified in the Treaty text, but the Treaty text does clearly specify conditionality. You might equally well claim that there aren't "really" any conditions because they're not in the body of the text.

Stabshauptmann wrote: »

In fact, if the signatories came forward later on and said it was only a desire, not a condition, there would be no legal hurdles to jump to make it so. There would be no reason to refer it to the Court of Justice, if everyone agreed to bail out a country that didnt ratify the Fiscal treaty.

It would be challenged in the German courts if nowhere else - and the intentions written into the Treaty would remain binding until they were written out.

Stabshauptmann wrote: »

I get that this is not an EU treaty, but it does involve EU institutions and interact with existing EU treaties, and you're telling me it would be refered to the EU Court of Justice should a dispute arise. Forgive me, but it seems to me that a European Court of Justice ruling that recitals cannot ground obligations could indeed become relevant.

You're mixing up the 'governing law' with the court it's being heard in. A CJEU ruling that preambles have less weight under EU law is not a precedent for the CJEU in considering a case that's governed by international law.

Stabshauptmann wrote: »

The thing about courts is that their outcomes are not always certain, so to me its not unfair to say there is a small amount of ambiguity. Had they stipulated what the eligibility conditions were in the enacting terms there would be none.

And SF are not the only people to ask this question.

Hah - Sinn Fein aren't claiming there's a small amount of ambiguity, though. They're claiming we can rely on their interpretation.

cordially,
Scofflaw

later12 · 31-05-2012 03:04PM

Stabshauptmann wrote: »

But the counter argument would be that if they wanted it to be essential, they would have put the condition in the enacting terms.

I've heard this argument before.

Does anyone know of a case where a provision has been ruled down because it only appeared in a preamble as opposed to the body of that treaty?

As far as I know, there are example of examples of constitutional victories which rely on preambles, but I don't know of any examples like what you're saying.

Stabshauptmann · 31-05-2012 03:28PM

oscarBravo wrote:

I'm not getting the line of argument.

I dont know if you are or not. From what Ive read of your posts you're only interested in flaming and being smug; but since this thread is going so well and I'm getting so many real answers let me give talking to you a go.

oscarBravo wrote: »

It seems to me that the same people are arguing that a 'yes' vote won't guarantee us access to ESM funding

And I was so close to forming an opinion and going to the polling station:eek: Who is saying this?

I was saying that nothing is certain with the ESM. The ESM treaty hasnt been ratified, and the eligibility conditions (I understand that the conditions attached to bailouts may differ from case to case) have not been spelled out.

, and also that a 'no' vote might not deny us access to ESM funding.
...
So why is this an argument for a 'no'?

Because if I didnt think access to the ESM was part of this treaty I would vote no. I think the structural deficit rule is silly because of its vagueness and will not achieve its aims. I think it has the potential to kick off a long and damaging austerity cycle.

I have read the posts from people here on boards saying we're not changing the deficit rules, but its just not what the independent commission has to say:

So what’s new?
If the Treaty is ratified it would add to the rules on government deficits and put some of them into national law.

For example at the moment countries are required to keep their annual general Government Deficit below 3% of GDP...That’s the current position.

Now the Treaty uses the concept of the structural deficit,... And under the rules proposed by the treaty this should be no more than 0.5% of GDP. If we ratify it the Treaty would require Ireland to put this maximum 0.5% structural deficit limit into national law.

National law would also have to contain an automatic correction mechanism. So if we are not meeting our target, or not moving towards it quickly enough, this correction mechanism will kick in and oblige us to correct the deficit. Inflation or economic growth can work to correct the deficit over time, but if this isn’t happening the government would be required either to cut spending or raise taxes to reduce the deficit.
Source: http://www.thejournal.ie/your-fiscal-compact-questions-answers-from-referendum-commission-467833-May2012/?utm_source=shortlink

I read that as the structural deficit rules are new, if you think the commission is wrong/misleading then make a complaint through the courts.

The Stability and Growth Pact requires that the structural deficit be not more than 1% of GDP, and there is no correction mechanism in place, so really, its not a requirement.

However, the potential benefits of ESM access outweigh the potential damage of the deficit rule in my mind, so the ESM is the crux of the matter to me.

oscarBravo · 31-05-2012 03:34PM

Stabshauptmann wrote: »

From what Ive read of your posts you're only interested in flaming and being smug...

I'll save myself the trouble of replying to your questions, so. I'm genuinely curious as to whether you've noticed any flaming or smugness on the part of people who agree with you, but don't bother answering that.

Your concerns have been addressed repeatedly in this forum. A search will turn up the answers you seek.

beeftotheheels · 31-05-2012 03:44PM

Stabshauptmann wrote: »

The Stability and Growth Pact requires that the structural deficit be not more than 1% of GDP, and there is no correction mechanism in place, so really, its not a requirement.

However, the potential benefits of ESM access outweigh the potential damage of the deficit rule in my mind, so the ESM is the crux of the matter to me.

Actually under the SGP it is 0% (this is the one bit that the TSCG actually relaxes slightly), but kind of irrelevant as you note, but this is actually the bit I'm most in favour of with the treaty.

Yes the definition of structural deficit is muddy which is not ideal. But, and for me this is a very big but, both the OECD and the Commission identified that we were running a structural deficit in excess of 0.5% during our bubble (although they differed wildly in the size of the structural deficit).

So these new rules, while not ideal, require us to have a Bill of the Oireachtas

http://www.finance.gov.ie/documents/publications/other/fisresbillscheme.pdf

Which requires us to set out procedures for reducing our structural deficit should we be running one.

This is the one bit of the treaty which might most have helped us avoid the worst excesses of the bubble, even if Bertie & Co had managed to find the friendliest economists (as I'm sure they would have), with the lowest calculations of the structural deficit (because it is a muddy concept), they'd still have had to try and cool the economy a bit before we fell off the cliff in 2008. This would have been better than the petrol pouring up until the inferno that we actually had.

Stabshauptmann · 31-05-2012 04:38PM

oscarBravo wrote: »

I'll save myself the trouble of replying to your questions, so.

Funny, because the only question I asked you was who was saying that voting yes wouldn't guarantee Ireland access to ESM funding. It seemed to me that you were implying I was saying this. But if you want to not answer that question, I'll be no worse off.

I'm genuinely curious as to whether you've noticed any flaming or smugness on the part of people who agree with you, but don't bother answering that.

I was directing my comments directly at you, not the yes camp.
You like misrepresenting what people have said. Here's a very recent example of how you did it to me.

oscarBravo wrote: »

Stabshauptmann wrote:

I dont see that implication myself.

[The bit Oscar decided to delete from my very short post to make his smug zinger work] I agree that Austerity isnt working, and do not want to increase the levels of Austerity by agreeing to stricter budget deficit rules

Really?!

If the implication of "Austerity isn't working: vote no" is something other than "vote no to prevent austerity", can you explain what that implication is?

Your concerns have been addressed repeatedly in this forum. A search will turn up the answers you seek.

You are implicitly asking the mods to close this thread, even though it has demonstrably been of use and been perfectly polite before you came riding along with your straw men in tow. How fantastically helpful of you.

oscarbravo do what you want with your website, I've found the discussions I've had on the politics board over the past week or so useful, but if you have a different vision of what your discussion board should be, so be it.

Stabshauptmann · 31-05-2012 04:45PM

beeftotheheels wrote: »

Actually under the SGP it is 0% (this is the one bit that the TSCG actually relaxes slightly), but kind of irrelevant as you note, but this is actually the bit I'm most in favour of with the treaty.

I took the 1% from the referendum commission website.
Source: http://www.referendum2012.ie/background-information/

Can you clarify why this is incorrect.
You are saying that you are in favour of relaxing [if it is the case] 0% to 0.5%, correct? So a move from 1% to 0.5% is something you would not see as favourable?

Yes the definition of structural deficit is muddy which is not ideal. But, and for me this is a very big but, both the OECD and the Commission identified that we were running a structural deficit in excess of 0.5% during our bubble (although they differed wildly in the size of the structural deficit).

I thought we had a structural surplus during the boom. What types of income were they disallowing to come up with a large structural deficit?

oscarBravo · 31-05-2012 05:09PM

Stabshauptmann wrote: »

oscarbravo do what you want with your website, I've found the discussions I've had on the politics board over the past week or so useful, but if you have a different vision of what your discussion board should be, so be it.

It's not my website, or my discussion board.

I'm going to apologise sincerely for my tone in my reply to you above. I had made the mistake of letting a much less articulate and genuine poster than you get under my skin, and I took it out on you. I read your post through a filter of grumpiness and responded in an unhelpful fashion. I'll do my level best not to do it again; it's beneath me and unfair to you. Insofar as I've misrepresented you in earlier replies, I can only hope that it was for a similar reason, unworthy as that reason is.

Genuinely: I'm sorry.

Stabshauptmann · 31-05-2012 05:17PM

Cheers, happens to the best of us.

beeftotheheels · 31-05-2012 05:24PM

Stabshauptmann wrote: »

I took the 1% from the referendum commission website.
Source: http://www.referendum2012.ie/background-information/

Can you clarify why this is incorrect.
You are saying that you are in favour of relaxing [if it is the case] 0% to 0.5%, correct? So a move from 1% to 0.5% is something you would not see as favourable?

I stand corrected (although not by refcom, by the regulation that I had to go and check). It is in fact 0.5% in the six-pack although it was originally to be "balanced or in surplus"

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:174:0001:0004:EN:PDF

Stabshauptmann wrote: »

I thought we had a structural surplus during the boom. What types of income were they disallowing to come up with a large structural deficit?

All the bubble stuff. The definition is supposed to weed out pro-cyclical amounts (in our case transfer taxes on property).

So, even if you'd said that we had to adjust for say 10% of our stamp duty and CGT (and those taxes actually fell by a hell of a lot more when the bubble burst) that would have calmed down the increases in public sector pay, and welfare, the checklist might have caused them to cool the property tax reliefs just a little bit and reign in other Government expenditure such that the ultimate bursting of the bubble would have been just a little less painful, and we'd have had just a little bit more tucked away in the NPRF for the rainy day when it came.

I don't think the rules are precise enough to have stopped anything, then again I'm not sure that very precise rules are the way to go.

But I really think that, even with the relaxed implementation FF would have gone with, they'd have helped a bit.

Connection between ESM and the Fiscal treaty not legally binding?

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