C. Flower
30-04-2012, 02:40 PM
Namawinelake has earned the right to be listened to, on the Fiscal Stability Treaty, having proven to be Ireland's best informed and hardest working commentator(s) on the Irish economic crisis.
The article in full is an excellent read, full of useful context and observation. It gives an all round look at reasons for vote Yes and No, but havin done that, NWL says a very firm No, to the Treaty.
I've pulled out the key reasons for this -
.
..ask yourself this question – will a “no” vote improve our chances of a renegotiation of our debt, damage our chances or leave our chances the same? The position on here is that a “no” vote will improve our chances by signalling that Ireland will be inconvenient and un-European and a “no” vote in a referendum one day may become a unilateral disowning of promissory notes the next. Unless Ireland adopts a stance which at least makes clear the threat of default then the view on here is we will get no-where. And as for the ECB and the withdrawal of its support, please, at this stage the ECB is lending about 3% of its balance sheet to Ireland, pretty much in line with our economic proportions in Europe– gone are the days of unprecedented assistance when our banks received 25% of all ECB lending.
...
...
The ECB has a primary objective of “price stability” or in simple terms, keeping inflation at around 2% per annum. If the ECB printed so much new money that our inflation grew by 10% in 2012 then even if there was no real economic growth, our debt:GDP would decline by about 10% from 108% to 98%. That however would not suit other economies in Europe and it appears to be psychologically repugnant to Europe’s biggest economy,Germany. You could argue that the Compact will not alter the current position of the ECB independently working to preserve “price stability”, but the view on here is that this Compact is going a step further and pre-empting a request from a crisis-hit country and making it clear they will not find any comfort in monetary policy. And that is wrong....
...
A “no” vote will rattle the cage of a Fine Gael/Labour government, a coalition with a massive majority but which has been complacent in its efforts to deal with the debt and deficit, a government which cost this country tens of millions of euro in interest by “grandstanding” in March 2011 and stopping us getting an interest rate reduction on the bailout funds for a further five months and only then on the back of Greece’s woes, a government which knew about the household charge for at least a year and yet oversaw the consequence-less fiasco whereby nearly half the households in the State have not paid the new tax, a government which showed contempt in its pursuit of the promotion of Kevin Cardiff to the European Court of Auditors and yet six months after uncovering a €3.6bn error in his Department’s calculation of the country’s debt we have yet to understand how the error occurred, a Government that has singularly failed to deal with the household mortgage and debt crisis and even this week has deferred the publication of a Personal Insolvency bill. And let’s not forget the weak-wristed efforts to reduce the burden of the bank bailout and to get a deal with Europeon repaying bondholders – yes the manifestos might have been drafted in Jesuitical terms, but these chickens come home to roost when the Government seeks our support.
...
...
There are other reasons to vote “no” – the Compact is very restrictive and it may not be wise to bind ourselves in advance to remedies for unknown ailments, the rules would not have prevented our crisis in 2008 and its aftermath though they might have alleviated the subsequent size of the deficit and in any event we now have adopted the “six pack” rules now anyway, a key measure in the Fiscal Compact the structural deficit is not precisely defined, EU and non-Irish institutions and personnel will have a greater say in how Ireland manages its economy and as we have seen with our corporate tax and financial transaction taxes, others may have different agendas and may seek to promote their own national interests ahead of ours, we have twice suffered the ignominy of our financial affairs being available to the German parliament ahead of the Dail and on neither occasion has there been sanction though the Government is as unhappy about the leaks as anyone. As well as ruling out monetary policy as a tool to help crisis-hit countries, there is no attention given to stimulus for growth.
...
Read, enjoy, discuss...
http://namawinelake.wordpress.com/2012/04/29/the-fiscal-compact-referendum-on-31st-may-2012-the-position-advocated-on-here/
The article in full is an excellent read, full of useful context and observation. It gives an all round look at reasons for vote Yes and No, but havin done that, NWL says a very firm No, to the Treaty.
I've pulled out the key reasons for this -
.
..ask yourself this question – will a “no” vote improve our chances of a renegotiation of our debt, damage our chances or leave our chances the same? The position on here is that a “no” vote will improve our chances by signalling that Ireland will be inconvenient and un-European and a “no” vote in a referendum one day may become a unilateral disowning of promissory notes the next. Unless Ireland adopts a stance which at least makes clear the threat of default then the view on here is we will get no-where. And as for the ECB and the withdrawal of its support, please, at this stage the ECB is lending about 3% of its balance sheet to Ireland, pretty much in line with our economic proportions in Europe– gone are the days of unprecedented assistance when our banks received 25% of all ECB lending.
...
...
The ECB has a primary objective of “price stability” or in simple terms, keeping inflation at around 2% per annum. If the ECB printed so much new money that our inflation grew by 10% in 2012 then even if there was no real economic growth, our debt:GDP would decline by about 10% from 108% to 98%. That however would not suit other economies in Europe and it appears to be psychologically repugnant to Europe’s biggest economy,Germany. You could argue that the Compact will not alter the current position of the ECB independently working to preserve “price stability”, but the view on here is that this Compact is going a step further and pre-empting a request from a crisis-hit country and making it clear they will not find any comfort in monetary policy. And that is wrong....
...
A “no” vote will rattle the cage of a Fine Gael/Labour government, a coalition with a massive majority but which has been complacent in its efforts to deal with the debt and deficit, a government which cost this country tens of millions of euro in interest by “grandstanding” in March 2011 and stopping us getting an interest rate reduction on the bailout funds for a further five months and only then on the back of Greece’s woes, a government which knew about the household charge for at least a year and yet oversaw the consequence-less fiasco whereby nearly half the households in the State have not paid the new tax, a government which showed contempt in its pursuit of the promotion of Kevin Cardiff to the European Court of Auditors and yet six months after uncovering a €3.6bn error in his Department’s calculation of the country’s debt we have yet to understand how the error occurred, a Government that has singularly failed to deal with the household mortgage and debt crisis and even this week has deferred the publication of a Personal Insolvency bill. And let’s not forget the weak-wristed efforts to reduce the burden of the bank bailout and to get a deal with Europeon repaying bondholders – yes the manifestos might have been drafted in Jesuitical terms, but these chickens come home to roost when the Government seeks our support.
...
...
There are other reasons to vote “no” – the Compact is very restrictive and it may not be wise to bind ourselves in advance to remedies for unknown ailments, the rules would not have prevented our crisis in 2008 and its aftermath though they might have alleviated the subsequent size of the deficit and in any event we now have adopted the “six pack” rules now anyway, a key measure in the Fiscal Compact the structural deficit is not precisely defined, EU and non-Irish institutions and personnel will have a greater say in how Ireland manages its economy and as we have seen with our corporate tax and financial transaction taxes, others may have different agendas and may seek to promote their own national interests ahead of ours, we have twice suffered the ignominy of our financial affairs being available to the German parliament ahead of the Dail and on neither occasion has there been sanction though the Government is as unhappy about the leaks as anyone. As well as ruling out monetary policy as a tool to help crisis-hit countries, there is no attention given to stimulus for growth.
...
Read, enjoy, discuss...
http://namawinelake.wordpress.com/2012/04/29/the-fiscal-compact-referendum-on-31st-may-2012-the-position-advocated-on-here/