jump to navigation

Compact Discussions March 1, 2012

Posted by Wu Ming in European Union, Ireland.

It may be no surprise that the Fiscal Compact is going to be put to a referendum in Ireland, but the manner in which this has come about certainly is.  Taken the Government statements issued yesterday at face value, it’s possible that a legal requirement exists because the Compact exists outside of the formal framework of the European Union, it’s not covered by previous amendments to the Constitution; a more cynical suggestion would be that if even a reasonable possibility existed that the Supreme Court might find that a referendum was required (and the enabling legislation was going to the Supreme Court in any case) then it’s better for the government to appear to have put it willingly to the people, and not to have been dragged kicking and screaming to the ballot box.

As to the campaign itself, I think it’s very difficult at this point to predict anything, other than it will be unlike any previous EU Treaty campaign, that it will be particularly dirty, and that Eamon Ryan’s support for the Compact is unlikely to be a ‘game-changer’.

This is not another Lisbon, Nice, Amsterdam or Maastricht referendum, for a number of reasons.  Firstly, Ireland has no veto power over this one.  The Treaty doesn’t require unanimity to come into force.  It’s reasonable to assume that it will, and it may well be in force by the time Ireland comes to vote (whenever that is).  A rejection by Ireland will not lead to any renegotiation, nor will it impede any progress towards implementation.  The argument sometimes used in previous referenda – that Ireland should bring down the Treaty because others did not have the opportunity to express their views – does not apply in this case.  This time, we’re voting for ourselves, and no one else.

It also differs from previous referenda in that the issues at stake are ultimately quite simple.  Of course, certain aspects arise which are technically difficult and open to debate – not least whether the Treaty can retrospectively impose conditions of the ESM which were not in place at the establishment of the mechanism.  But it broadly comes down to a relatively simple choice – access to ESM funding at some point in the future (if required) in return for signing up to draconian budgetary rules in perpetuity.  This isn’t a situation where one can reasonably argue that there’s not enough information available, or the issue is too complicated – the old ‘If you don’t know, Vote No’ approach.

I mentioned previously (excuse the self-promotion) why I think a ‘No’ vote is the only conceivably left position to take, and won’t repeat the same points now.  However, I would make a few observations.

Any ‘No’ campaign should focus on the substance of the issue, and not on extraneous points.  It does no credit to previous anti-EU Treaty campaigns (in the broadest sense) that many of the arguments put forward at the time have since proven to be untrue; this is, admittedly, far more the case in relation to far-right/Libertas arguments (abortion, gay marriage etc.) but it must be said that much of what was argued about the consequences for Irish defence policy during previous campaigns have, to put it mildly, not turned out as predicted.

This is not simply arguing that the ‘No’ side should tell the truth for moral reasons.  There are important campaigning considerations as well.  It is necessary to distinguish this campaign from previous ones, to avoid the argument that all opponents of the compact are simply kneejerk anti-EU crackpots (see Stephen Collins in yesterday’s Irish Times).  A more effective strategy would be to stick to the facts, and allow the ‘Yes’ campaign to expose itself as indulging in scaremongering/bullying tactics, as it undoubtedly will.

It’s also important to acknowledge that there are no easy fixes, and that there are substantial risks associated with a ‘No’ vote.  No one can say, with any certainty, what the consequences of such a vote might be.  It may well be that it could lead to a sovereign debt crisis if Ireland is unable to return to private lending markets, and is cut off from availing of ESM funding.  And while it could be argued that an ad hoc solution might be found among EU partners to ensure the survival of the euro, let’s not pretend that this is assured.

It should also be made clear what this Treaty is not about.  It is not about the current bailout programme, or current government policy (although obviously a ‘Yes’ vote would substantially impact on future governments).  Nor is it about any previous Treaty, is not Lisbon III, or any of the issues which arose in that context.  It changes nothing about the structures of the European Union.  And, of course, it should go without saying that it has nothing to do with septic tank, the household charge or the infamous Vatican Embassy.

However, there are two very strong arguments about why this Compact should be opposed.  The first is that it enshrines permanent austerity policies – policies which, by any standard, have failed time and time again – into Irish law.  It rules out, forever, any government policies except neoliberal ones, almost the equivalent of putting Fr. Brendan Smyth in charge of a child protection agency.  Secondly, the manner in which this compact was introduced completely undermines the institutions of the European Union, as well as the spirit of solidarity in which it was formed.  It is an explicit attempt by France and Germany (and, more importantly, by the global financial interests those governments represent) to bounce weaker Member States into a suicidal economic policy, of benefit only to multinational financial institutions, completely sidelining not only the European Commission, but the national governments within the Member States as well.  It is a template for unelected, unwanted, technocratic governments across the Union.  To paraphrase George Orwell, if you want a picture of the future, imagine Ayn Rand’s stiletto heel stamping into a human face – forever.

There is clearly much work to be done, and a difficult campaign to fight, if this Compact is to be defeated.  However (and I know I won’t be thanked for this) those on the ‘No’ side could do worse than looking again at President Higgins’ speech at the LSE last week for at least some powerful arguments against what is being proposed.


1. Drithleóg - March 1, 2012

While it may be strictly correct to say that the referendum and the treaty are not about the Household Charge, water taxes (and to a much lesser extent the Septic tank charge) they do come into the equation in the wider sense. All of these are coming from the EU & the Troika, they are part of the austerity agenda and the enforcement of economic measures on citizens of this state at the behest of the EU and international capitalism. Privatisation is also a major part of this agenda. Whereas the EU/IMF deal with Ireland was a temporary one which will eventually lapse, the Fiscal Compact / treaty will never lapse – it will be permanent.


2. sonofstan - March 1, 2012

allow the ‘Yes’ campaign to expose itself as indulging in scaremongering/bullying tactics, as it undoubtedly will.

I’m sure there’ll be some of that, but there’s also an interesting other strategy emerging: a sort of ironic disavowal of the significance of the treaty. McCarthy, Whelan et al are pushing a line something like this: this treaty is a mess, it won’t do what it claims to do, the terms are laughably imprecise and thus it probably doesn’t really commit us to anything much…….but nevertheless we should, on balance vote for it, not because the consequences of rejection will be so terrible, but because it might do us a little bit of good to appear to stay onside with ‘the project’.

I can’t help but think we are being played like Fred McMurray’s victim in Double Indemnity, signing our death warrant with an ‘insignificant’ piece of paper work smuggled into an apparently quite different policy.


EamonnCork - March 1, 2012

It’s some rallying cry, “Vote yes, sure you might as well like.” Of course if it means so little, you might as well vote no either. Not really sure that’s going to be a winner for them though it says a lot about their cynicism that they’re taking this road.


sonofstan - March 1, 2012

Perhaps Pauline McLynn as the poster girl of the ‘Yes’ campaign?


3. David Ellis - March 1, 2012

The ruling Irish elites are cynically looking for a mandate to carry out the ECB and bankers cuts because they of course are the owners of the counterfeit bonds issued by the Irish banks and guaranteed by the Irish state. They are holding a gun to the heads of the Irish people and hoping that the austerity cuts demanded by the ECB will appear desirable when compared to the alternative: isolation, money the value of confetti and/or a complete return to dependence on the UK financial oligarchy. But you are of course right. Socialists cannot possibly vote `yes’ but must vote `no’ whilst making it clear that what the Irish government should actually do for a starters is stay in the Euro, repudiate the bank bail out, defend desirable and necessary public spending and balance the budget by collecting sufficient tax and lend Euros at ECB base rate to small business. Nobody should welcome this referendum which is only an invitation to Ireland to commit suicide.


4. Mark P - March 1, 2012

From Paul Murphy’s website:

“The Irish Times editorial of 29th of February criticised comments I made on the Fiscal Treaty saying it was an attempt to “redefine the issue as ‘austerity’ “. I replied to these comments by letter which went unpublished today. Below is my unpublished reply to these criticisms:

Sir, –

As your editorial of 29 February suggested, there is already an attempt to encourage people to vote on issues other than the content of the the Fiscal Treaty before us. This attempt comes not from the Left opposition to the Treaty, but from the government and the establishment media. Exhibit A: that very editorial, which welcomes the Taoiseach’s description of it as an ‘essential building block in Ireland’s recovery’. Exhibit B: the Tanaiste’s suggestion that it is a vote for ‘economic stability and economic recovery and an ‘opportunity to go beyond casino capitalism’. Exhibit C: the Taoiseach’s statement that it is an ‘opportunity to reaffirm our commitment to responsible budgeting’.

Let us engage in a debate on the text. Article 3 provides for a structural deficit of a maximum of 0.5%. Ireland’s projected structural deficit in 2015 according to the Department of Finance will be 3.7%. To meet the target in one year (if the Commission was to demand it), would mean additional cuts and austerity of €5.7 billion. To meet the target over a number of years, would mean an extension of the grinding austerity that is already destroying lives and economies across Europe. It is not a Treaty for economic stability, it is a Treaty for synchronised institutionalised austerity across Europe.

Article 4 provides that Ireland will have to reduce its debt to GDP ratio at a rate of about 3% of GDP per year (presuming that Ireland’s debt to GDP ratio is around 120% in 2015). If there is no economic growth, which is practically precluded by the savage cuts insisted on by Article 3, that means paying back €4.5 billion a year in principal payments to the bondholders on top of the interest of around €8 billion a year. It is a Treaty for the casino capitalists, not an opportunity to go beyond their system.

Yours, etc.

Paul Murphy MEP

Socialist Party / United Left Alliance

150 Pearse St.

Dublin 2”


5. Mise - March 1, 2012

The threat of excluding Ireland from the ESM funds for future bailouts seems like a bit of a badly thought out red herring. Isn’t the whole rationale behind the ESM to protect the entire community from the contagion effect of one country being a ‘bad bet’ on the markets – not, as you’d think from the Compact, a nice protection for Ireland, or any one country, in its own right?

I can’t imagine Europe will be doing itself any favours on the markets by imposing the clause if the referendum is defeated.


6. ghandi - March 1, 2012

Colm McCarthy was quick out of the traps today with an opinion piece on the Fiscal Treaty. And what does he make of it?
‘As an exercise in addressing the Eurozone’s twin banking and sovereign debt crises, the fiscal compact makes no worthwhile contribution.’
Wow, no worthwhile contribution (read: no contribution at all).
‘ . . . the treaty instead addresses a non-problem.’
A non-problem? But what about the new structural deficit targets we will have to adhere to? Won’t that help us back to recovery and fiscal stability?
‘The measurement of structural deficits is more or less impossible and the inclusion of an un-measurable concept in an international treaty is a reckless piece of drafting.’
Reckless! Wow, again.
‘Macro-economic experts have concluded that it is essentially an evasion, designed to provide political cover, particularly in Germany . . .’
This is getting really interesting – an evasion, mere political cover.
‘If the new treaty had been in place since the euro’s launch in 1999, would it have prevented the crisis? Will the new treaty prevent a second crisis, assuming the common currency survives this one? The answer in both cases is no . . ‘
Colm goes on to claim that this a ‘bad treaty for Europe’, it is inadequate, that our European partners ‘behaved in bad faith’, and that ‘the current generation of European leaders are in denial about the genesis of the crisis . . ‘.

Well, Colm has convinced us – this Treaty is really not a good idea at all.
So should we expect to see Colm chairing the launch of the No Campaign to the Fiscal Treaty next Monday? Well, here’s the funny thing. Colm, after making a convincing case against the Treaty, recommends that we . . . vote for the Treaty.
‘ . . . the electorate would be well-advised to swallow hard and vote yes . . .’
‘There are treaty provisions which could be interpreted as restricting access to the EU’s permanent bailout fund to countries which adopt the treaty . . . there is no percentage in running the risk of losing support from official lenders, even if that might not be needed . . . Moreover, a rejection of the treaty would antagonise the ECB . . ‘
So there you have it – the ‘Or Else’ defence. Essentially, supporters of a yes vote cannot argue the merits of the treaty because, as Colm has so expertly shown, there are no merits. When considered in its own right, the Fiscal Treaty cannot stand up – either for Ireland or the Eurozone.
The only defence that supporters of the Yes campaign can advance is ‘we either vote for the treaty OR ELSE‘. OR ELSE can mean anything – angering up the ECB, being locked out of the EU’s permanent bail-out fund, annoying partners who have acted ‘in bad faith’, ‘getting kicked out of the Eurozone, the EU, the Federation, etc.
Colm has done the opponents of the Fiscal Treaty a useful service. He has shown that there is no positive reason to vote for the Treaty. Indeed, there is no concrete reason at all to vote Yes. The debate has barely begun and the supporters of the Treaty have conceded considerable and valuable ground.
There is only one reason to vote for the Treaty – a hypothetical OR ELSE. I will return to analyse this hypothetical. But in the meantime, thank you Colm – you have provided some of the best arguments for voting No so far in the campaign.

This piece is from Michael Taft


CL - March 1, 2012

Any quantification of the imaginary ‘structural’ deficit, such as the one from the Dept of Finance should not be taken seriously. Colm McCarthy and Karl Whelan are right in their criticisms of this unquantifiable, undefinable entity. But then they go on to recommend acceptance of the treaty ; to accept that economic policy, in perpetuity, should be based on such phony technocratic, ideological calculations. This ploy is a gimmick to install anti-Keynesianism as the law of the land.
President Higgins praised what he called the ’emancipatory scholarship’ of the LSE in creating the British welfare state. This ignores the long, hard struggles of the working class and their organizations, unions.
Higgins’ hope that emancipatory scholarship will emerge from Irish universities to counter neoliberal ideological hegemony is as illusory as the structural deficit.


7. CL - March 2, 2012

The calculation and use of the structural deficit is more political and ideological than technical.

‘But the method used is crucial. This figure – 0.5% – can determine the future of key social rights. And whether a government is running a structural deficit on the wrong side of this threshold is, to a large extent, determined by the way it’s calculated.’



Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: