Fiscal Treaty Article

Published: May 11, 2012
Categories: News Article, Sligo Champion Articles, Euro/Finance

Sligo Champion Article

Did you ever have a feeling that all you wanted to do was put your head in your hands and say stop, just STOP.  I have wanted to do just that many times during recent weeks.

When I have heard claims that a YES vote will guarantee stability, I just shook my head as much in sadness as in disagreement.  When I listened to claims that a YES vote will enshrine austerity, again I shook my head, well aware that austerity is with us for some time whether we vote YES or NO.  There are those who passionately tell us that austerity will be much worse if we vote NO and those who vehemently assure us that a NO vote will somehow make things better, make things easier, more bearable – or at least that’s the inference.
Before I go any further, it’s nail my colours to the mast time.  I am on the record as a reluctant YES voter for two reasons mainly, access to the E.S.M. (European Stability Mechanism, called the bailout fund) and my belief that this is not the last treaty we will vote on – but more of that anon.

As I write this sitting on the Sligo Train on Thursday May 10th at about 8.15pm, passing through Dromod, Carrick-on-Shannon, Boyle, Ballymote, Collooney and on to Sligo, I am now asking somebody else to STOP.  I am asking An Taoiseach, Enda Kenny to stop the Referendum just for now, to postpone or defer it.  This morning, (May 10th) a bombshell dropped courtesy of media reports that Angela Merkel could not get the required two thirds of the vote needed in the German Parliament to ratify the Fiscal Treaty.  I almost dropped my precious mug of tea, I could hardly believe it.  The Socialists in the German Parliament will not support the Treaty as written.

Vive la France, or more accurately Vive Francois Hollande, new Prime Minister of France.  His election, as a French Socialist promising to change the Fiscal Compact is emboldening the German Socialists who are saying NO for now.
My shock at hearing the news from the German Parliament was genuine and it began to dawn on me – this is a game changer.  It has positive overtones in that it looks as if a growth compact or some deal involving growth promoting policies might well be added to, appended to, or included in the Fiscal Treaty.  While this in itself won’t be enough to solve all our problems it would be a significant step forward and if it indicated a future direction for the E.U. I personally would begin to breathe a little easier.  So why am I asking Enda Kenny to stop, just for now why am I asking him to pause in this process?  Well from the beginning I am on the record as saying there should be no rush to referendum and that we should wait until after the French elections at least.  I know there are always elections taking place in one country or another but France was different because of its size and influence.  Also Holland is having elections after the fall of its Government and while the Dutch are not nearly as influential they have been strongly preaching austerity at European level.   It is now quite possible after the fall of the last Government that the Socialists may lead a coalition in Holland also.

While I agree we cannot always be looking over our shoulder at what other countries are doing, we could never ignore France and the statements from Hollande as front runner in the race that he would not ratify the Fiscal Treaty as it is.  Even then I was saying to myself, why do we have to be the one to go first, to make that momentous decision in such a climate of uncertainty, why not hang back and see how things develop?  But the die was cast when the Government formally announced May 31st as Referendum day and I became one of those reluctant YES voters.  

But the ground has shifted – maybe not an earthquake, but a good strong tremor.  Enda Kenny himself has said this vote is more important than any General Election and I agree.  It is therefore crucial that we know exactly what we are voting on.  After all if we say YES this will be enshrined in our Constitution.  Furthermore, I believe that running with this Referendum in such uncertain circumstances will increase the chances of a NO vote - the very outcome the Taoiseach wishes to avoid.  Europe is on a journey from its very beginnings as a Coal and Steel Community to a Single Market area with a common currency and even closer political union.  After the Lisbon Treaty many thought – now it’s time to consolidate, improve how we work and make the Union more responsive to the needs of citizens.

What we didn’t know then, was that lurking beneath the surface was a subprime minefield in the U.S. that would act as a catalyst for a fiscal crisis.  This was quickly followed by a realisation that Greece was hopelessly and helplessly in debt having cooked its books and lied about its figures, time and time again.  We didn’t know that Irish Banks were operating like Casinos and that coupled with a property bubble in both Ireland and Spain, those banks would bring us to our knees.  We also didn’t know that Italy was dangerously in debt and that even France would lose its coveted AAA bank rating.  One after the other the dominoes fell and to this day it continues.  The road we are on has many twists and turns, there are still a number of junctions to negotiate and cul de sacs to avoid.  We have a way to go and we are not even sure of our final destination.

Personally I have always supported the E.U. project and I still do.  In this Treaty vote I am a reluctant YES, largely for the reasons given earlier.  If I thought this would be the last European Treaty we would vote on, I would vote No because we need a lot more than what this Treaty provides.  Aside from growth, we will need some form of pooling of Euro debt, Eurobonds or maybe a redemption pact.  

I hope the next Treaty will give us that choice to opt in or opt out of such a system. But for now the current Treaty is another step on that journey.