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Vote Yes Or Else!

Fiscal Kitty

The government clearly understands that the forthcoming referendum on the Austerity Treaty will be a battle between people’s fear and their anger, and they are determined to make fear the centerpiece of the Yes campaign. Within hours of the official launch of the Referendum their fear strategy was in full swing.

First off the blocks was Taoiseach Enda Kenny. He declared that delivering a yes vote in this Referendum was more important for the future of the country than any General Election. Meanwhile, the Labour Party were sticking to the Lisbon’s ‘Yes for Jobs’ strategy, warning that multinational companies would be fleeing the country within hours of a No vote.

Then, Minister for Finance, Michael Noonan stepped up to the plate. Perhaps feeling that the fear campaign was not working, he decided that threatening people was a more productive strategy and warned people that if they dared to vote against the Austerity Treaty, he would introduce an even tougher budget than the last one: "If there's a No vote the Budget I'll be planning for later in the year will be dramatically more difficult than if there's a Yes vote . . . If people think that by voting No they'll avoid further tax cuts and increases, actually a No vote will do the opposite".
The Yes campaign believe that their trump card is the claim that a No vote will result in Ireland being unable to access funding for a second ‘bailout’ from the Economic Stability Mechanism (ESM). This is because of a clause known as the “blackmail clause”  that was added as a last minute safeguard to the ESM Treaty.

The ESM is the new permanent bailout fund for Europe. When the ESM Treaty was originally agreed and signed last July there was no reference to the passing of the Fiscal Treaty as a prerequisite for funding (hardly surprising since the Fiscal Treaty was not even drafted). It was not until February of this year that an additional clause was added to create a link to the Fiscal Treaty and to exclude countries who failed to ratify the Fiscal Treaty from access to funds.The relevant clause reads: "It is acknowledged and agreed that the granting of financial assistance in the framework of new programmes under the ESM will be conditional, as of 1 March 2013, on the ratification of the TSCG by the ESM Member concerned and, upon expiration of the transposition period referred to in Article 3(2) TSCG on compliance with the requirements of that article."In other words, either accept the permanent austerity demanded by the Fiscal Treaty or there will be no access to ESM funding. This is blackmail, pure and simple. However it’s not that simple. The government have neglected to inform people of a small, but hugely significant detail; they have the power to remove the blackmail clause. 

In order for the ESM to be established two pieces of legislation must be passed in the Dáil. One is to ratify the ESM Treaty. The other is to amend the Treaty on the Functioning of the European Union (TFEU) to enable the ESM to be set up. This amendment to the TFEU must be agreed unanimously by all EU member states. To put it simply, if the government was really committed to a fair and open debate on the Fiscal treaty they could simply veto the TFEU amendment and refuse to pass it until the offending clause is removed. Secondly, as this legislation does not come before the Dáil until July, they can simply use their veto in the event of a No vote.

 It is also quite curious that the government is suddenly concerned with a second bailout. Back in January of this year Michael Noonan was telling anyone who would listen how well Ireland was doing and that the idea of the country needing a second bailout was “ludicrous”. It is also worth reminding the government ministers who are suddenly so obsessed about obtaining a second bailout that they are not a charity. Nor is the European Central Bank pouring free money into Irish ATMs.

We only have to look to Greece to see the reality of a second bailout. It has meant the reduction of the monthly minimum wage by 23%, leaving workers on an average monthly wage of €489. This is on top of the massive public sector job losses, and another round of devastating cuts to health, education and social welfare.

Socialists are not in favour of a second bailout to appease the markets. Millions of people's lives are being destroyed in order to ensure that billions are available to appease the bondholders and financial vultures that are preying  on Europe. We argue that there is their is an alternative to austerity. It involves engaging in a strategy of public investment that will put people back to work , canceling the debt and taxing the profits and wealth of the rich.

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