All set for (another) Irish referendum

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The southern Justice Minister Alan Shatter is getting the third degree from Mary Wilson on RTE’s Drivetime programme… Apparently the Attorney General has said it’s complex and the fiscal compact treaty should be put the people (and made part of the constitution of Ireland).

There’s an awful lot of spin about what it means. The compact would mean that any country signing up to it would have to keep debt under under agreed controls. And it seems that Ireland is going to sign up in advance of any referendum. What happens if the people turn round and say no, is not clear at this stage.

Speaking on this subject back in January, Ireland’s Europe Minister, Lucinda Creighton said:

“It would be a very sad day if we somehow decided to opt out of that (new treaty) and allowed the other 16 members of the euro zone to progress and try to find a solution without us,” she said.

“I think it would make it almost impossible for us to continue as part of the currency union because being part of a currency union means you have to abide by the rules.”

Hmmm…. Pretty handy to find that the only serious political opposition party is tied up with a ridiculous scandal of a possible misuse of copier toner cartridges on the very day of the announcement…

  • Alanbrooke

    “Pretty handy to find that the only serious political opposition party is tied up with a ridiculous scandal of a possible misuse of copier toner cartridges on the very day of the announcement…”

    maybe they should just pay for their stationery like the rest of us, it avoids embarrassment.

  • London_Irish

    Wonder should we pencil in Fiscal Stability Treaty Referendum II for later in the year, just in case…

  • http://joeharron@yahoo.com joeCanuck

    BBC world news are reporting that a referendum will be held.

  • Hopping The Border

    Are there any specific dates being talked about yet Mick?

  • http://joeharron@yahoo.com joeCanuck

    From the Irish Times site:

    The Taoiseach said that he intended to sign the treaty at the weekend with all the heads of the EU in Brussels. In the coming weeks, he said the Government would finalise the arrangements and the process leading to the referendum, leading to the establishment of a referendum commission. No date was given for the poll.

  • Mick Fealty

    They may try to put it back far enough to see how the crisis shakes down. The others don’t need Ireland to ratify, but Ireland may find it has to ratify in order to remain within current arrangements.

    It’s a constantly self iterating situation.

  • Greenflag

    I wonder what sweeteners the ECB will proffer to the Irish voters to get a yes vote ? Gilmore is already bought for nowt and Kenny and Martin is just an echo chamber for the coalition .
    Interesting will be how SF approach this one .

  • Mick Fealty

    None is my guess. They don’t need an Irish yes vote this time. The ECB will want all the flakes on the outside this time.

    So, whatever the spin, this ought to be a genuinely free vote this time out.

  • wee buns

    The difference between ‘headline’ and ‘structural’ deficit – anyone?

    Let the fear mongering obfuscation commence.

  • Greenflag

    ‘None is my guess.’

    True but that may not be the position of the Coalition come referendum time . SF with 25% and a lot of independents plus disaffected in the Labour Party plus the general cooling of the electorate towards what is seen as a Franco German exclusive club committed in the main to save reckless French and German banks /

    The Coalition won’t have it easy and I sense the ‘commitment ‘ to vote in this referendum will come from the No side .

  • Alias

    Greenie, this isn’t an ECB deal. It is a Sarkozy and Merkel’s package.

    The government via its Europe minister is already starting the bogus spin that this is a referendum on Ireland’s eurozone membership so if the amendment is rejected then it will be hard to see how that won’t be a de facto rejection of such membership.

    In that case, there can be no more support for the policy of bailing-out eurosytem banks based in Ireland since that policy is only possible due to ECB funding which, of course, won’t continue if Ireland withdraws.

    That will mean that massively over-leveraged French and German banks will have to face the consequences of their own reckless lending to other reckless eurosystem banks. As Constantin Gurdgiev points out, these massively over-leveraged banks are in no shape to withstand the forthcoming Irish default.

  • Greenflag

    @ Alias ,

    There are basically three choices facing the government and more importantly the Irish people .

    1) Vote for the new fiscal treaty and continue within the eurozone for as long as it lasts which may be a lot longer than you might think from listening to or reading much of the commentary in the Anglosphere particularly in the Wall St /City of London zones .

    2) Vote NO and return to our own currency which would be a massive radical step which would involve implementing capital controls , massive devaluation and unilateral default via a negotiated write off of a large circ 80% of the debt .

    3) Eat humble pie and go back to the Sterling link which would be a rough ‘mid point between the above 2 ‘choices ‘ the odious current ‘bailing out’ of French and German and Irish ‘banksters’ and a leap into the abyss of a ‘punt’ nua ?

    Against the background of all of this of course several other countries are lining up to join the EU and some reconsidering Euro membership in light of the ‘disciplined ‘ conditions implicit in the new fiscal treaty .

    As for me I’m not impressed by the Franco German de facto usurpation and there are several aspects to this new Fiscal treaty that merit a long and hard analysis .

  • wee buns

    Much to study in this treaty – but other figures that arose during the VB debate last night:

    Under the fiscal treaty –
    -Current 3% GDP will be compulsorily to be reduced to 1 half %
    -Forced austerity will increase by 66%
    -8.5 billion of existing cuts will be added to by 6 billion by the treaty.

    If accurate, hardly impressive.
    Ok the currency can struggle on indefinately but much depends on time frames here.

  • http://andrewg.wordpress.com Andrew Gallagher

    If this is political cover for allowing the ECB to pump money into the economy, then perhaps. Otherwise, not much has really changed. Austerity can only be sustained if the weaker economies (particularly Greece) return to growth, and it is looking increasingly like this will not happen quickly enough (or in the case of Greece, at all) without an effective devaluation. In a currency union this can only happen through differential inflation, i.e. German inflation.

    No matter what happens, Germany is going to take a hit. It’s either inflation, contagion or taxation. Taxation for fiscal transfer is throwing good money after bad, and contagion resulting from default is a can of worms.

  • Greenflag

    ‘No matter what happens, Germany is going to take a hit. ‘

    Probably not before Sept/October 2013 which is when Chancellor Merkel must go before the people for her performance review in the next Federal election.. Meanwhile she has backtracked on a visit to France to give ‘moral’ support to her first cousin President Sarkozy . It appears that such a visit would only enhance electoral support for Monsieur Hollande the French Socialist candidate and Sarkocy’s nemesis . Monsieur Hollande is somewhat critical of the new ‘fiscal treaty’ which could make for even more confusion in the EU if he defeats Sarkocy.

  • Taoiseach

    “And it seems that Ireland is going to sign up in advance of any referendum. What happens if the people turn round and say no, is not clear at this stage.”

    You have to sign a convention or treaty before you can ratify it – you sign subject to ratification and you’re only bound if you ratify. I suspect the consequences of a failure to ratify will be few. We’ll be back in the running around “the euro cannot fail; Ireland cannot default” type situation and this is what will happen. The Irish government will make a “solemn pledge” of some sort to stick to deficit commitments as it’s already doing with troika and money will be handed over. The fact the pact says you can’t get money unless you ratify is irrelevant as that only applies to those who ratify. They’re not going to throw Ireland out of EU or euro. I shall be voting no.

    I’ve noticed the press has given no coverage to recent German court ruling that Merkel is acting illlegaly on this matter. Remember they said before she needed parliamentary approval to lend money. She set up a nine man panel. Court says that’s not sufficient.

  • wee buns

    And furthermore -

    VB just made an interesting point about that clause in the fiscal treaty, the one that says we can withdraw no funds if we don’t ratify…?

    The ESMF (Euro Stability Mechanism Fund) which agrees to the further drawing down of funds if needed, was already ratified last July

    OK so the malevolent clause was added only 4 weeks ago!

    How come nobody told us?

    What position did Enda take 4 wks ago?