The Irish people will soon be asked to ratify The Fiscal Compact Treaty in a referendum.
This treaty will impose permanent austerity, further cuts and tax rises in this country for decades after the EU/IMF programme ends in 2014. It will also impose austerity on the whole of Europe ensuring a continuation of the Europe-wide recession. The FG/Labour Government have cynically agreed in advance that if the people do not vote “yes”, Ireland will not be able to borrow from a new fund called the ESM. Fortunately this measure can be vetoed by the Dáil after the referendum. This attempt to bully people into voting “yes” is, therefore, based on bogus grounds.
After the fiscal deficit has been reduced to 3% of Gross Domestic Product in 2014, the Treaty required the “structural deficit” to be reduced to 0.5% of GDP over a number of years. Economists such as Michael Taft (United the Union) and Tom McDonald (Tasc Research Group) estimate that this will require further cuts and tax rises amounting to 5.7 billion. After this figure has been achieved, the Treaty requires that Irish debt levels be reduced to 60% of GDP from the officially projected 120% over 20 years from 2018. This will require further cuts and tax rises amounting to 4.5 billion each year. This is an appalling vista for those now living and for generations to come. It cannot fail to close more businesses and to throw tens of thousands more on the dole.
It must be remembered that because the Fiscal Compact is to be enshrined in an international treaty between governments, it cannot be reversed by the Irish people in the future by electing an alternative government or by referendum. It would constitute a major surrender of Irish sovereignty. How can the Labour Party even mention the name of James Connolly while advocating such a Treaty?
The Treaty makes no provision to increase economic growth in Ireland or in Europe generally. Indeed there is widespread agreement among economists that these Europe-wide austerity measures will damage growth in the world as a whole. Professor Joseph Stiglitz, Nobel Prize winner, says that governments continuing to impose austerity are engaged in a suicide pact.
The European Trade Union Confederation has condemned the Treaty. Though the Irish Congress of Trade Unions has decided not to advise members how to vote on the Treaty, the General Secretary, David Begg has said: “Nobody at all in our ranks is in agreement with the fiscal treaty”. Already the shop-workers union Mandate, Unite the Union and the electrical union, TEEU, have called for a “No” vote.
The likely new President of France, Francois Hollande, has promised if elected to re-negotiate the Treaty and has said that it will not be ratified as it is by France. As this cannot happen before the Irish referendum, our people will be voting on a Treaty, the content of which will not be fully known!! What if France agreed to measure that against Irish interests being inserted in the Treaty?
The threat that Ireland will be unable to borrow from official sources if we vote “no” is entirely contrived and bogus. The ESM is not the only source of borrowing and Ireland can veto the setting up of that fund after the referendum. Indeed, we can be sure the EU and the IMF will be more than willing to provide a new “bailout” in their own interest under whatever guise. Failure to do so would expose International Banks to a massive default on Irish sovereign and bank debt. Very shortly the interest on borrowings paid by the state mainly to foreign lenders will reach approximately 9 billion Euro per year. Would anybody believe that international bankers would forego that?
Seamus Healy TD