Three (and an half) defining aspects of the current crisis… May 24, 2012
Posted by WorldbyStorm in European Politics, Irish Politics.trackback
It’s worth noting that a most unwelcome ingredient – to some – has been added in to the European mix by the election of Hollande and the Greek election results. This being even on the social democratic and radical left side of the equation a divergence from the orthodoxy at [almost in the Greek level] state level, and more importantly one that is being acted upon by Hollande.
I pointed early this morning to the way in which yesterday the dinner of EU heads last evening was, in the Irish Times, trailed as good for the YES side because – implicitly – Hollande would row back on his proposals. When the dinner outcome proved to be almost entirely the opposite no more was said about the referendum.
But it does point up in stark terms three of the defining aspects of the contemporary period.
Firstly, politicians when elected are not expected to stay true to their word but instead are expected to cleave to the orthodoxy.
Secondly, that this aspect outlined in point one is perfectly acceptable, that Labour, and indeed Fine Gael acted in some broader ‘best interest’ by resiling from stated policy positions. One sees it too in the coverage of Hollande, and the Greek political system, where the narrative – usually unspoken, is that they will all see sense and accept the inevitable.
Thirdly, that the crisis is apolitical and that the orthodoxy is the only way forward – is indeed the inevitable. Clearly Hollande and a broader, albeit hitherto submerged, oppositional element at EU state level don’t agree. But it has a resonance closer to home in the truly bizarre attitude of the Labour Party to the Treaty where even as Hollande, and others sotto voce, call its fundamental premises into question they press on regardless to the referendum. Linked to this is the idea that there is or are no paths out of this from a social democrat and left of social democrat position.
And the half? Well, it’s the patent inability of certain parts of the media commentariat to get to grips with all this. Despite those articles in the IT yesterday even a cursory reading of the international press would indicate that there was no deal done and the likelihood of agreement was minimal. But of that not a whisper in the Irish press. It’s as one comment on the IT a week or so put it under an editorial on the crisis – all the international editorial pages were awash with analyses that pointed in one direction while the IT editorial pointed in directly the opposite.
What’s fascinating to see is the process by which these aspects are slowly, and/or rapidly, being overturned. I can’t help but think that the gap between government rhetoric on this issue and the events happening at EU level is in some ways analogous to the days leading up to the arrival of the IMF/ECB on our shores some years back. The government of the day was desperately spinning that things were otherwise even when the feet of the international representatives had touched Irish soil. I’m not certain that it will have the same attritional impact upon the government, but it cannot fail to have some impact.
Meanwhile, had to smile when I read this on the RTÉ website.
EU leaders say text of fiscal treaty will not be changed
But the subheading changed that ‘leaders’ to ‘officials’…
European Union officials have confirmed that there will be no change to the text of the fiscal treaty.
And the main text changed it again to…
Two separate sources have told RTÉ News that there was “no question” of modifying the treaty, and that the growth agenda as pursued by French President Francois Hollande would be reflected in parallel initiatives.
Brilliant!
[I see that this was later changed to 'Officials' in the heading - I wish I'd got a screen grab... ]
The ‘Irish Times’ this morning is clear:
“Merkel confirms Berlin will not permit fiscal treaty alterations”. So that’s that then. “Four countries have already ratified, so no change will happen”, said her spokesman. Germany is not among the four.
For Gilmore that is definitely that: “One of the issues that is very much out of the way is that somehow this treaty is going to be reopened or changed. The summit meeting made that very clear. The text of the treaty is what people are voting on and that is not going to change”, he said in Belfast yesterday.
Once again this an RTE ‘Morning Ireland’ presenter (not Cathal Mac Coighle, the other bloke) said to an interviewee. ‘sure the country is broke’, as if that was like, ‘sure it’s a really sunny day’. And once again, incidentally, there there was no direct disagreement even from the interviewee.
This is still one of the richest countries in the world. As Vincent Browne keeps saying, it is the state that’s broke, because the funds needed by the state in this emergency are not being taken from the rich, even in proportion to other states. Actuall the funds are being given to the rich, through the bank bail outs.
It’s always the same, they just won’t talk about tax increases.
Well yes, the Irish press seems particularly dim on this issue; however it echoes much of the European press where ‘growth’ and ‘austerity’ are seen as two sides of the only possible policy.
Promoting growth and austerity is much like transfusing one litre of blood into a patient whos blood has been just been drained by a quack with no grasp of scientific medicine.
Very true.
Are the negative and scarmongering arguments of the ‘yes’ side painting them into a corner as they escalate.
Yesterday’s Irish Times (24th May) report, ‘Re-entry to markets ‘unlikely’ with No vote’, looks at first site like a new twist to the scare about EMS access. That a ‘no’ result would prevent acess to ‘the markets’ as well as to the EMS.
http://www.irishtimes.com/newspaper/ireland/2012/0524/1224316608660.html
The report said:
‘IRELAND IS unlikely to be able to borrow from the international markets on a “sustainable basis” if there is a No vote on the referendum, the Dáil has heard.
Minister for Finance Michael Noonan said the National Treasury Management Agency (NTMA) had advised him that a No vote in the referendum “would mean in all likelihood that it would not be possible for Ireland to re-enter the bond markets at sustainable rates”.
He said it was not clear what other source of funding would be available if the fiscal treaty was rejected “with the resulting loss of access to the ESM [European Stability Mechanism]”. Mr Noonan told Fianna Fáil finance spokesman Michael McGrath that the International Monetary Fund had “indicated that it will provide funding to Ireland only as part of a European initiative”.
Mr McGrath had asked if the funding options for Ireland at the end of the EU-IMF programme were either to borrow substantially on the markets or have access to ESM funding.
The Fianna Fáil spokesman said that by the second half of next year Ireland would have to identify “with certainty how the country will be funded on exiting the EU-IMF programme”. He said Ireland would need €36 billion in 2014 and 2015 to ensure the country was fully funded.
The Cork South Central TD said the rate being charged on the bailout programme was about 3.5 per cent, while the markets “when I checked at lunchtime, are charging 7.35 per cent on a nine-year government bond”.
Mr Noonan said he had consulted the NTMA, which manages the State’s funding “and I consider that a No vote on the referendum on the stability treaty would mean in all likelihood that it would not be possible for Ireland to re-enter the bond markets at sustainable rates”.
[end quote]
But a little reflection indicates that nothing new was being said about accessability to funds as such. But what was being confirmed by the NTMA was that Treaty or no Treaty, ‘no’ vote or no ‘no’ vote, “in all likelihood that it would not be possible for Ireland to re-enter the bond markets at sustainable rates”.
That is, there was little likelyhood of ‘returning to the markets’ when the current bail-out runs out, and this is from the horses mouth, the NTMA. It is not long since the government mantra, particularly that of Labour Ministers, was not ‘access to the EMS’ but that austerity was to get us out of the bail-out, out of the Fianna Fáil imposed bind, to ‘restore our autonomy and independence’ and that things were heading that way if we kept our nerve.
Now it seems that government policies and austerity are, in any case, not ‘giving us back conrtol over our own destinies’. They are failing, ‘we’ will not be ‘returnig to the markets’ in all likelihood and we have Michael Noonan and the NTMA to thank for confirming that.
I agree. That’s what’s so puzzling about the ‘returning to the markets’ line… wasn’t that a bullet we were meant to be dodging due to the efficacy of their approach?