Second Irish referendum is a no brainer

It is getting a bit fraught. The trailing of a decision to hold a second referendum on the Lisbon Treaty is being preceded by the usual Cassandra-like mutterings. Given that all is overshadowed by the financial crisis this is not surprising. The advice not to take is that offered by Dr John O’Brennan in today’s Irish Times.
“A referendum on nothing less than our continued membership of the union is what is required.”

The BBC’s Mark Mardell describes the package – no surprises there.

“..the plan is that by the end of this week’s summit the Irish government will declare that it intends to ratify the Lisbon Treaty by this time next year. In return other countries will agree to legally binding statements making it clear the treaty does not affect three main areas of concern to No voters: abortion, neutrality and taxation.”

Keep your eye on the Big Picture. No major EU state seriously wants an Irish train wreck to emerge from the Lisbon Treaty, a State that is in the single currency. Benelux with their strongly integrationist traditions that underpin their own statehood may be exceptions. But in a union of 27, the message from the accession states in particular must be: if a small state like Ireland is allowed to flake off, who’s next?

In the recession climate a second referendum should be a fairly easy sell. Huddle together to stay warm and keep out the big bad wolf. Bugger the “efficiency” of a small commission. And if by unlikely chance they’re all stupid enough to botch the fudge, there’s always the other great EU tradition: kick the whole thing into the long grass.

  • veritas

    instead of all the hype, scare stories, bully tactics and downright lies….

    the Irish government should do something refreshing, something they`ve wanted to do since the last and “final” No vote….

    Tell the Irish electorate to Fuck off, we know whats best for us…sorry YOU.

    Remember your place you ungrateful, free thinking dupes!!!!!

  • George

    So either we should do what they say or we leave? Seems a bid of an odd situation in a supposed community of equals.

    Ireland has said no to Lisbon in a democratic vote (remember them) so the EU will just have to move along within the not insignificant competences already agreed.

    Anyway as long as the EU doesn’t feel the need to extend its remit even further into our lives there is no need for a referendum. Why won’t they investigate this option?

    What europhile Dr O’Brennan has failed to realise (or deliberately ignores) is that we have merely stopped the EU train ahead of a point junction, not derailed it.

    Why does he want us to either get on the train and accept blindly where it is going or get off?

    These are not the only options.

    Two tracks lie before us: the further integration and more abrogation of sovereignty to the EU track (aka Lisbon) or the EU figuring out how to make the current system work without grabbing more power from the member states’ national parliaments track.

    The latter track would not even need a referendum. We could be chugging down it already if the result of a democratically held referendum was respected.

    Instead the EU is still engaged in wholesale madness such as moving its parliament lock, stock and barrel a few times a year, and not being in a position to sign off on an audit in over a decade.

    And we are supposed to hand over more power to the EU?

    It’s like giving a builder a contract to build your kitchen extension when 50 years in and he still hasn’t even finished putting the roof on the house.

  • Wilde Rover

    It is fitting that Dr. O’Brennan lectures at Maynooth as his piece comes across like one of the more baleful sermons of yesteryear.

    We can be sure the electorate can look forward to more such sermons as 2009 wears on.

    But the last paragraph was the icing on the cake.

    “Thus by focusing again on the question of Ireland’s economic wellbeing and appealing to the more material instincts of Irish citizens, such a referendum stands the best chance of producing a solution to the EU’s protracted constitutional row.”

    What’s that John, threaten to take away the peon’s playthings and they will dance to whatever tune you put on?

    The contempt shown by some of the Yes side for the electorate of the republic is nauseating.

  • The European elections provide an opportunity for no-voters to vote against the established “yes-parties”, safe in the knowledge that the Euro Parliament doesn’t matter, except to politicians.

  • mnob

    A recession makes it more likely for a pro EU vote ?

    Really ?

    In a time when according to economic theory the ROI should allow its currency to devalue and adjust its interest rates to suit its economy ?

  • Mack

    mnob – “In a time when according to economic theory the ROI should allow its currency to devalue and adjust its interest rates to suit its economy?”

    ECB base rate is 2.5% and falling.

    Allowing your currency to depreciate (or devalue within a fixed exchange system) gives you a temporary export advantage. It also drives up the cost of your imports (both consumer and producer), reduces the value of your savings, makes it much harder to borrow in domestic currecy (and Ireland would also have a much smaller domestic credit market), and hugely increases the cost of paying back foreign debt (good luck with those Euro mortgages!).

    To quote legendary investor Jimmy Rogers

    “They think that if you drive down the value of your money, it makes you more competitive, now that has never worked in history in the long term.”

  • Mack

    Also to the people peddling this :-

    mnob -“In a time when according to economic theory the ROI should allow its currency to devalue and adjust its interest rates to suit its economy ? ”

    Can you please point me to the legions of respected Irish economists who are calling for Ireland to leave the Euro?

  • mnob

    Mack,

    Are you saying that even if they had the economic levers the Irish government would do nothing ?

    Maybe the ECB rates are (temporarily) in line – but where were they when what was needed was an increase in rates to curb the enthusiasm of the developers ?

    I know what the consequences of devaluation are thanks – one of the main ones would be to free up the car parks in Belfast.

    Make exports cheaper and increase import costs ? – sounds like what is needed to me.

    reduces the value of savings ? – so does a protracted recession.

    and no economists are not calling for Ireland to leave the Euro because they are economists and such a statement would be seen as overtly political in nature. However that doesnt stop them from seeing the problem :

    This from Philip Lane professor in Macroeconomics at Trinity :

    “Since the option to devalue is not possible for a member of the euro area, fiscal policy is the main macroeconomic stabilisation instrument and just letting the automatic stabilisers work in Ireland’s current situation involves a breaching of the 3 % limit.”

  • Mack

    mnob I’ll take these points one by one

    “Are you saying that even if they had the economic levers the Irish government would do nothing ? ”

    They could actually make things worse, a lot worse. See Iceland, Argentina. The ECB is protecting the value of the currency just fine. Money is fundamentally a store of value. If you arguing for a reduction in the value of your currency, when do you stop? There are other ways to boost competitiveness.

    We are where we are. Leaving the Euro would mean the Irish Central Bank would have to manage Punt Nua. If it fell in value relative to the Euro (you are arguing this is a good thing), the over indepted Irish would find it increasingly difficult to repay their Euro loans.

    “Maybe the ECB rates are (temporarily) in line – but where were they when what was needed was an increase in rates to curb the enthusiasm of the developers ? ”

    True, if the Irish Central Bank had control of monetary policy they may have raised rates. The Icelanders raised rates and attracted huge amounts of cheap and available credit from other countries via the carry trade. The result wasn’t pretty.
    We can judge the Central Bank, Regulator and politiciains on what they did do during the property bubble. They allowed the banks to massively loosen lending terms.
    The ability of Irish economy to consume cheap credit was determined by the unit price of housing. The unit price of housing was determined by wages (which grew, but not by as much) and by the amount of credit which could be obtained on the back of said wages (this went through the stratosphere and was totally controllable by the government).

    They abjectly failed in this regard – do you really want to hand them the keys to the monetary printing press?

    “I know what the consequences of devaluation are thanks – one of the main ones would be to free up the car parks in Belfast. ”

    The shops in Ireland sell mostly imported goods. There is no multiplier positive or negative from increased or decreased retail sales.

    http://www.irisheconomy.ie/?p=41

    “reduces the value of savings ? – so does a protracted recession. ”

    Depreciation absolutely does destroy the value held in the currency. Everyone’s savings are affected. A protected recession may reduce the size of societies savings as they are spent, but will affect only some of society.

    “Make exports cheaper and increase import costs ? – sounds like what is needed to me. ”

    Import costs increasing will decrease the profit margins on exports and can lead to CPI / PPI
    inflation.

    You can improve the competetiveness of your exports by investing in new technologies or improving efficiencies. Devaluation is akin to not only everyone taking a pay cut (in Ireland’s case not a bad solution) but also giving away a portion of their life’s savings.

    It also forces long term interest rates up, as the central bank will need to to choke of the inflation the increased money supply and low current interest rates cause.

    “and no economists are not calling for Ireland to leave the Euro because they are economists and such a statement would be seen as overtly political in nature. However that doesnt stop them from seeing the problem : ”

    That answer is unconvincing and a cop-out. Many economists have been in the papers telling the government what they think should be done throughout this crises. Not one has called for Ireland to leave the Euro.

    I wouldn’t read that quote from Philip Lane as advocating leaving the Euro – it’s merely a statement of fact. The actions available to the government (thank God) do not include the debasement of the currency. Maybe he does feel that way – if so, he should come out and say so. If not, you are abusing his name.

    Ireland’s fiscal situation is dodgy because the spend on public sector wages thanks to benchmarking is too high, and projected tax revenues due to misintrepeting bubble increases as permanent too low.

  • On the contrary in a recession a second no vote becomes more likely. The budget cuts in health, education and more will explode in the 2009 budget as the govt faces an €11 billion deficit (equal to around 25% of the entire budget). This will spawn a whole new species of protest-groups and protest-groups. The Treaty, unlike Nice, can’t be portrayed as actually being necessary to accomplish anything for Ireland or Europe – unlike EU Enlargement with respect to Nice Treaty – and sin scéal eile with the latter and mass-immigration which the people were not prepared for after that passed. We are understandible reluctant to give our discredited political-class the benefit of the doubt because of all this and 11 years of corruption revelations from the Moriarty and Flood/Mahon tribunals. The man who negotiated Lisbon on behalf of Ireland was forced out of office in disgrace, and that taints the Treaty by association.

    What I’m hearing of these so-called ‘concessions’ leaves me cold, as a no voter. While I did have some concerns over the future of our control of taxation policy, the big deal was the Charter of Fundamental Rights, which the govt shows no sign of seeking an optout from. The Charter is enshrined into EU law by the Treaty, and as such will occupy a place superior to Irish law including the Constitution (because since 1972 EU law has superseded our Constitution under our terms of entry). It expands the jurisdiction of the European Court of Justice to include asylum and immigration, capital punishment, industrial relations, medical/scientific ethics, freedom of speech and of the media, right to work, family etc. On all of these issues, the ECJ will have the final say. I, for one, am not prepared to vote to give the unelected bureaucrats of the ECJ the power to meddle even more in our affairs than they do already. It’s not that long since the Metock(2008) case where the court struck down Irish law on marriages-of-convenience to obtain residency in Ireland, and we still haven’t forgotten the Chen(2004) case where they gave EU and Irish residency rights to the parents of EU citizens, forcing us to hold a referendum to close the Citizenship loophole that gave Irish citizenship to everyone born on Ireland including the children of illegal-immigrants. There is no way we will accept the ECJ getting the final say on such issues. We fought hard for our independence, and Dev would turn in his grave to see his party bartering away Irish sovereignty for thirty pieces of silver.

  • Jimmy

    The EU have already threatened to demote Ireland to ‘associate member’ if it voted No again.

    Nothing like a precautionary threat to instil my faith in EU democracy!!!

    btw, well said Brian Boru

  • Dave

    “IN THE years to come we may well look back on the failure of the Lisbon Treaty referendum as the last manifestation of the hubris which characterised the Celtic Tiger era. The illusion created by our sham prosperity suckered many people into believing that no serious negative consequences would follow on from a No vote.”

    Trying to claim that Ireland’s rejection of the Lisbon Treaty is responsible for the monetary crisis in the banking systems within the Eurozone, and not the EU’s ECB flawed monetary policies, reveals him to be a bungling propagandist who is spewing spurious non-sequiturs.

    He uses hyperbolic language to describe the bullying and offensive insults from Europhiles directed towards the Irish after the rejection of the Lisbon Treaty as “the most serious crisis in external relations since the second World War.” I think he means that we should have voted Yes because by voting No we were treated to funny outbursts such as Mr Sarkozy saying that we were “bloody” people who “had stuffed our faces at Europe’s expense for years.” If he thinks a few mindless Europhiles having undignified hissy-fits and making utter fools of themselves is an international crisis…

    “But it is unclear as yet whether this model will simply acknowledge formally the Irish right to decide policy for itself in these defined areas or reference specific opt-outs from EU policies á la Denmark.”

    My goodness… does he mean that Irish people should actually be permitted to have some scant input into their own internal affairs?

    “There are good grounds for arguing that going down the Danish route is mistaken.”

    Oh, he doesn’t mean that. For a moment there I thought he wasn’t a Europhile who is bound by the Treaty of Rome to seek “ever closer union” between the member states of the EU integration project, and the only outworking of ever closer union is unity. Europhiles do not believe that the nations on the continent of Europe have the right to self-determination. Their view is that there is a shared claim to self-determination under the banner of European. That is why they oppose the rights of states and nations to self-government, seeking instead to transfer the sovereign powers of those states to the European parliament (which, they believe, holds the authority to determine the affairs of ‘Europeans’. So, Mr Brennan shouldn’t be talking about the national interest when he doesn’t believe that there should be a nation-state and, ergo, a national interest.

    “Former taoiseach John Bruton has succinctly summed up the problem with the opt-out model: it would reduce Ireland’s influence but still leave us having to deal with the policies drawn up by our partner states in the Council of Ministers.”

    The internal affairs of other member states are no concern of ours. We would not need any input into devising legislation if we opt out of applying that legislation to our internal affairs. Indeed, keeping legislation as a matter for the Irish parliament gives us 100% control over it compared to transferring that legislative power to the foreign parliament of the EU wherein our control is reduced from 100% to 0.8%. Perhaps in Bruton’s world (where he landed a plum job from the EU after his domestic Irish political career expired), 0.8% input is significant, but not in the real world.

    “I argue that the only viable option open to the Irish Government is to hold a second referendum on the substantive question of whether or not Ireland remains a member of the EU.”

    I agree with him on this, but for very different reasons.

    “The first argument in favour of such an option is one of equity. In a context where each of the other 26 member states will have ratified the Lisbon Treaty, those states will have demonstrated that they accept the rules and procedures of the club.”

    On the contrary, they will have demonstrated the exact opposite. They will have shown that the Unanimity Rule is very flexible. They’d like to show that it is also breakable but, alas for them it isn’t. So instead they proceeded with ratification as means of intimidating the Irish people to the effect of “Change your mind or we proceed without you.” This is bullying model not a partnership model. There is no point in having the freedom to decide if that freedom is not respected.

  • Dave

    [b]Continued[/b]

    “Assuming that ratification is completed by early 2009 in our partner states, it is simply inconceivable that Ireland, with a population of less than five million EU citizens, can continue to block the introduction of a constitutional and institutional framework accepted by the democratically-elected representatives of 495 million EU citizens.”

    This is the pure Europhile mentality. He clearly believes that the right of nations to self-determination is null and void. To him, Europe is one sovereign unit and its citizens are not the citizens of their respective member states but are now the citizens of Europe. Of course, they remain (for now) as the citizens of their respective member states and the only right to self-determination that is applicable is the will of each nation-state.

    “In asking voters to endorse Ireland’s continued membership of the EU, the proposition would thus categorically imply an endorsement of Lisbon as the EU’s normative-institutional bedrock.”

    Each treaty is endorsed or rejected on its own merits. He is asking people to transfer all of the sovereign powers of the state to the EU on the deranged premise that membership of the EU would then de jure agreement to be ruled by it on all affairs that were formerly to be decided by the nation in the sovereign parliament of their state. At least we know where he stands – but not because he had the honesty to tell us.

    “EU structures” such as the Eurozone got Ireland into its financial mess. Simply put, Ireland’s economic future cannot be contemplated seriously inside of EU structures.

    “Indeed, Irish Ministers have consistently argued that Ireland would have gone the way of Iceland in recent months were it not for Irish membership of the EU.”

    Oh dear… scaremongering about Iceland. This guy is an unmitigated EU propagandist. For example, both Switzerland and Israel are the same size as Ireland, yet the Swiss Franc and the shekel are among the strongest currencies in the world. This line that small states can’t have independent monetary policies is only proffered by those who don’t want them to operate independently of the EU, i.e. Europhiles.

    I agree, however, that it isn’t possible for Ireland to regain control over its monetary policy in the present circumstances. The monetary policies of the EU have destroyed Ireland’s economy, and we must now simply hope that the same morons who destroyed it can salvage it. It is a circular argument to point to the Eurozone as a saving grace for Ireland because if we did not join it we would not be in need of saving graces.

  • Dave

    “spurious non-sequiturs”

    And the first person to say ‘tautology’ gets a free black eye…

  • Whatever you say say nothing

    Looks like the army of Irish eurosceptics are out tonight making sure that the interweb stays a [strikethrough]UKIP[/strikethrough] [strikethrough]Veritas[/strikethrough]Libertas zone. “It is a circular argument to point to the Eurozone as a saving grace for Ireland because if we did not join it we would not be in need of saving graces.”

    Like Iceland. Well done.

  • Dave

    Idiot. If you’re argument is that every state that didn’t join the Eurozone would have ended up like Iceland, then why didn’t the other 182 states who haven’t joined the Eurozone end up like Iceland?

    IQ tests should be a prerequisite to referendum to stop people like you from voting on important issues.

  • Wilde Rover

    Mark Mardell,

    “In return other countries will agree to legally binding statements making it clear the treaty does not affect three main areas of concern to No voters: abortion, neutrality and taxation.”

    No one has made the taxation part clear yet.

    Will the republic become a special tax zone within the Eurozone? Are the other Eurozone states happy with this?

    Will the republic be a potential tax haven or is this just more smoke and mirrors?

  • Mack

    Dave – “Idiot. If you’re argument is that every state that didn’t join the Eurozone would have ended up like Iceland, then why didn’t the other 182 states who haven’t joined the Eurozone end up like Iceland?

    IQ tests should be a prerequisite to referendum to stop people like you from voting on important issues. ”

    That’s harsh.

    We know that Irish financial institutions took advantage of the cheap Euro by large scale borrowings on the wholesale market which they used to fund our property bubble.

    We know that Iceland had higher interest rates that attracted funds from low yield countries seeking a better yield (carry trade).

    The Icelanders went on a credit binge. We went on a credit binge.

    So what would have happened had Ireland not been in the Euro?

    Without the Euro our banks probably still would have had access to large amounts of extra money to lend out because interest rates would have been slightly higher and our banks would likely have ‘benefited’ from the carry trade.

    We can presume in this scenario that the global supply of Euros, Yen, US$ was the same.

    If they had excess money to lend out (over and above amounts allowable due to domestic deposits), we know from the track record of all involved that this is what they would have done.

    The Central Bank warned in 2000 that we had a property bubble from 1995-2000 – yet they did nothing to prevent that bubble growing at an accelerated rate from 2001 onwards.

    http://www.independent.ie/opinion/letters/property-crash-warning-fell-on-deaf-ears-1567890.html

    We can say categorically that the track record of the Central Bank, Government and Regulator in handling the bubble is suspect. Anything beyond that is pure speculation.

  • Whatever you say say nothing

    “Idiot…” said “Dave”.

    I still have a vote, idiot or not. If you are so right in what you believe, why are you so brittle about it?