Tell me it isn’t so

If true this is madness. It can’t be true, surely: can it?

Dublin is lobbying Paris against pushing for changes to the core treaty text or anything that could be considered “constitutional” in character and require a second Irish referendum for ratification.

Source: here.

56 replies on “Tell me it isn’t so”

It has the ring of truth. You got a problem with madness? Might explain why you left.

This is sooo embarrassing, Gilmore, to make it worse, claims to be a Socialist! What does Hollande think of these Irish? Your piece answers the question I posed below, hopefully it cannot be true.

I scribbled this earlier, more appropriate here 🙂

“…… the election of Francois Hollande may not have proven to be such an embarrassment for Labour/Fine Gael. Instead of consultation re the Hollande Protocols that need to be included in the new version of the Fiscal Compact, we have the current embarrassing situation of Labour/Fine Gael forging ahead with a version of the ‘Compact’ Hollande is committed to changing?

Is that why Gilmore is in PAris at the moment? After Fine Gael and Labour doggedly deciding to hold the Referendum on May 31 to allow them to enjoy the holidays, they must have hoped Sarkozy would have won through, now they’ve put a Referendum before the Irish people that is insulting to Francois Hollande’s vision for a new Europe without Hollande’s protocols for growth.

………

Francois Holland has a good sense of humour. Perhaps he may help Kenny, Gilmore and Bruton extract the Irish tooth of debt and get out of another fine mess they’ve got us into?

The Three Stooges

http://www.youtube.com/watch?v=dcELyKkOAak

Hope you know waht yur doin?

We could get fired for this?

I posted this link to an up-to-minute report from Le Monde which is a more reliable guide as to what is happening than the FT.

http://www.lemonde.fr/election-presidentielle-2012/article/2012/05/07/croissance-les-partenaires-europeens-de-m-hollande-veulent-negocier-vite_1696984_1471069.html

The key sentence is the following;

“Les homologues de François Hollande sont prêts à ajouter une déclaration au pacte budgétaire, voire un protocole, mais pas à remettre en cause le corps du texte”.

Hollande’s major difficulty is that he cannot retreat too much from his eletoral platform before the legislative elections. But the elements for a major deal are there, all the participants being pushed at this stage to get the European show back on the road.

Eamon Gilmore is trading Irish Sovereignty in exchange for his salary. There’s a word for this sort of thing.

Might be an idea to put up the whole thing for those not in a position to go searching for it:

“High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://blogs.ft.com/the-world/2012/05/european-elections-reaction-live-blog/#ixzz1uBZGRxyA

Continuing our tour of European capitals, to Dublin now and Jamie Smyth of the FT, who reports that the Irish government is anxious to avoid any major renegotiation of the eurozone fiscal compact by François Hollande ahead of its referendum on May 31.

Eamon Gilmore, Ireland’s deputy prime minister, said Hollande’s victory would provide impetus to a European growth agenda that Ireland has been promoting for some time. But he said Hollande’s plan to renegotiate the pact to include growth would not have constitutional implications for Ireland and so would not derail its May 31 referendum.

“We don’t have to change our constitution to take economic measures to promote growth,” said Gilmore, whose Labour party belongs to the same European political group as the French Socialist party and who was in Paris to congratulate Hollande.

Hollande’s campaign pledge to renegotiate the fiscal treaty has caused concern in Dublin, which is in the grip of a finely balanced referendum campaign. While welcoming any measures to promote growth in Europe, Dublin fears any suggestion of a major re-write of the fiscal pact could destabilise the government’s Yes campaign and, if agreed, render its referendum redundant. Dublin is lobbying Paris against pushing for changes to the core treaty text or anything that could be considered “constitutional” in character and require a second Irish referendum for ratification.

“I have discussed this with leading figures within the French Socialist party,” Gilmore told Irish radio on Monday. “What [Hollande] is talking about is not the treaty insofar as it supports budgetary discipline.””

Actually, screw snarky comments. This is absolutely incendiary. Anyone civil servant found to have orchestrated such underhanded treachery should be immediately sacked and their pensions revoked. In past times, their head would be put on a spike outside Dublin Castle and for this sort of rank treachery I really can’t see much wrong with that.

Frankly, if this is how the Irish government and civil service chooses to behave at such a critical moment, I would be in favour of inviting the French to come in with a few Legionnaires and just take over.

And I’d put Gilmore in the same cell as Brady during the interregnum.

@ All

Coincidentally, Hugh Carnegy of the Paris office of the FT was on the News at One just now and he confirmed what has been glaringly obvious for some time viz. Hollande is not seeking a change to the fiscal pact. Carnegy quoted a member of the entourage of Hollande who said that they were concerned by what was not in the treaty, not what was in it. In other words, some kind of accompanying “growth deal” is in the works and France under Hollande will not ratify the treaty until it is in place.

The legislative elections take place in France on 10 and 17 June. It does not take a brilliant political strategist to figure out that the deal will be agreed sufficiently in advance to have a favourable impact as far as the new French government is concerned.

It is equally difficult to imagine it having any impact other than that of supporting the view that a yes vote in the referendum would be the right vote for the Irish people. Or, to put the issue in a more neutral way, it will make it more difficult to see what advantage there would be to voting no.

P.S. The decision on the date for the referendum seems to have been taken with blissful disregard to what was going on outside the confines of the political debate in Ireland. Nothing new there!

“I have discussed this with leading figures within the French Socialist party,” Gilmore told Irish radio on Monday. “What [Hollande] is talking about is not the treaty insofar as it supports budgetary discipline.”

Contrast

“From the town of Tulle in his rural heartland of Corrèze in southwest France, Hollande declared victory. “May 6 should be a great date for our country, a new start for Europe, a new hope for the world,” he said. “I’m sure in a lot of European countries there is relief, hope that at last austerity is no longer inevitable.”

He said his mission was to go to European leaders to demand measures for “growth, jobs and prosperity”. Hollande’s first move as president will be to push Germany to renegotiate Europe’s budget discipline pact to include a clause on growth.”

And today Gilmore is changing his stance….your going to frighten investors.

Inept, incompetent, stupid…no I can’t get the word.

Gilmore was on the RTE news last night saying there would be no change to the treaty but he spoke like he knew events have a habit of overtaking the best paid plans.

Having convinced himself that Lough Derg is a 5 star retreat especially in the bare feet he is now faced with the offer of a bar of chocolate. The torment must be a catholic thing.

@DOCM
Our posts crossed. I agree with you.
Gilmore’s position is increasingly bizarre.
“In other words, some kind of accompanying “growth deal” is in the works and France under Hollande will not ratify the treaty until it is in place.”
He needs 60% to ratify so it will have to be a meaningful deal.
Now why in gods name would we ratify ahead of France.

As the only EZ country to have a referendum it must surely be a source of potential embarrassment if we need abandon the 31st May referendum now (as Deputy Shane Ross has called for).

But if a modified Fiscal Treaty codifies rules and organisations for the growth element, what choice will we have but to run the referendum again?

On a related point the two Greek “pro memorandum” parties have dropped from 251 seats to 149 seats in the 300-seat Greek parliament. It might be a stretch for the 151 “anti memorandum” parties to form a government, but the betting must now be we have a hard default now in Greece. What repercussions here?

Discouraging, disappointing and downright stupid of Gilmore and the government.

Ireland and a great majority of Europeans have been hoping and some praying for a change from the rigid Teutonic austerity.
Yet when a chink of light appears, the Irish government for their own narrow self interested reasons, decide it is best to prioritise their own jobs, bonanza pay and expenses.
‘If you have tears, prepare to shed them now’

@ Ceterisparibus

For the simple reason that we are not even at the races. Given the likely sequence of events, the closing week (or weeks) before the referendum should be very interesting indeed.

The FT’s rolling blog also has the following interesting item on a key aspect of the “growth deal”; how will it be paid for?

“The chancellor told Austrian state radio that there is no alternative to continuing austerity in highly indebted countries. But he hoped that Hollande’s victory would give more impetus to balance austerity with “a policy that emphasizes growth and employment in Europe, which is a central parameter for stability and social peace”. He also sees chances improving that the eurozone will agree on an internationally coordinated financial transaction tax. The Austrian coalition government already put €1.5bn in revenues from such a tax in the budgets for the next three years, and will face a serious shortfall if the levy does not materialise”.

Chasing hares remains a favourite sport on this blog and elsewhere. This is one that might be worth the effort.

@OMF
A sort of Wet Atlantic Corsica with the foxy haired Neolithic’s living in the mountainous interior although we don’t have a mountainous interior ……we could develop a modern Bord na Mona Mysticism cult or something and make a few bob off it while we are at it.
http://www.youtube.com/watch?v=nEEOyDeIqhI

With people going around & around every decreasing circles on the Bord na Mona narrow gauge network……finding their inner self and all that.

This is great stuff really – it illustrates the power dynamics withen this demonic construct beautifully.
I think Eamonn should keep up the Good work.

This is sadly how colonies function – promote and feed the local elite and a few orc clans such as the IFA and you can capture entire nations without that messy war stuff.

Me thinks this will how Ireland will look in a 100 years …somehow speaking with a strange Hybrid French tongue.

http://www.youtube.com/watch?v=SPN_o9ElXsQ

@Jagdip
re “But if a modified Fiscal Treaty codifies rules and organisations for the growth element, what choice will we have but to run the referendum again?”

@Grumpy has been making the point here for some time that the actual wording of the amendment gives enormous powers to ‘bodies competent under the treaty’.
One wonders if E Gilmore has read the wording !

@Jagdip Singh
“the two Greek “pro memorandum” parties have dropped from 251 seats to 149 seats in the 300-seat Greek parliament”
Does this include the 50 bonus seats for being the largest party? A stunning fall indeed – to go from 201 out of 250 to 99 out of 250…

@Jagdip
Hard default in Greece? You can buy their 10yr for 21.66 today versus 25+ a few days ago. So much for the hedge fund guy in NY saying buy. He must have been unloading.
They have a funny system in Greece. Samaras will get a 50 seat bonus…so who knows, can he govern?
And the legal of Official debt is so high that it is difficult to see how it can be resolved with Official haircuts.

Moderators:

Can we get a post started regarding Cormac Lucey’s article in yesterday’s Biz Post? I think he, and David McWilliams, make some excellent points about the unsuitability of the euro for Ireland.

@ Ceterisparibus

On re-reading your comment, and for the avoidance of any misunderstanding, what I find “bizarre” is the rush to judgement evident in some of the above comments.

In my view, it is in Ireland’s interest to ratify the TSCG for the simple reason that it might provide some guarantee against any future incompetent government (in which we seem to specialise) bankrupting the country again. This assumes that we will emerge from our present status as such, the chances of which would not be advanced by voting no. However, the latter argument weighs less with me and, indeed, were this to be the outcome, the first objective would be achieved but in a much more painful manner. (The argument that eternal austerity is implied by the terms of the treaty has been shown to be so much twaddle in several cogently argued contributions on this blog).

DOCM,
You are correct in your supposition that Hollande will not try to renegotiate the Treaty as he will be humiliated if he does and his presidency will be over. A few Growth bells and whistles will be added to a side letter.
Greece may be offered a honourable exit from the EU and reunification with Turkey.
Here in Ireland the left wing No squeal foul. However, even if there was no treaty we would have to balance the budget. My own hope is for a no vote and a rapid cull of the national herd of sacred cows.

Im sorry, but how on earth can something on growth Benoit in the constitution? You can exactly legislate it, outside of a monetary policy. The FC Treaty will not s renegotiated. There will be something separate on the side. Anyone who thinks the FC will be renegotiated to involve a constitutional clause (and thus requiring a referendum) is being very naive.

@Ceteris

I think we might need disagree on the Greek 10-year bond. Here’s the link to Bloomberg’s pricing and it seems to have been hovering around 21% for the past couple of months but has spiked by 11% (in relative terms) to 23% today.

http://www.bloomberg.com/quote/GGGB10YR:IND

@Eoin

A special adviser to Francois Hollande was interviewed on RTE radio’s This Week programme yesterday and she was quite upbeat about a renegotiation of the Compact and of there being a new text. With France at the vanguard and the economies of Ireland, Spain, Italy, Greece and Portugal in support, why shouldn’t 50%+ of the EuroZone’s population have their voices heard so that we get a Compact more sympathetic to our circumstances?

Ireland has had a ‘growth deal’ in place for the past twenty years under various Smart Economy guises, third level research, etc.

Michael Hennigan has pointed out here numerous times that the 20 billion spent on the science budget makes it the biggest investment bank in the country.

Whar are the unemployment and emigration figures again?

Maybe Hollande has better ideas on growth, but whether Ireland can lend him a deck or two is questionable.

Despite the excitement, the ancien regime> of the bubble years will not be restored in Dublin.

The problem is France has very little leverage financially.

It would be nice to dream like turning a Chinese trading hub in Athlone into reality.

The odd naive American my take a bus to Athlone from Shannon or Dublin Airport and fall on their back when asked for a downpayment of 50-100% with an order. Serious traders would head for Guangzhou.

Gilmore is a socialist but it’s difficult to be one in a country where expressing any ideological view has been so unpopular for so long. If the electorate vote yes to the fiscal treaty then the naysayers may as well leave and find a country that actually values its sovereignty.

@DOCM
Hollande is an astute and expierenced politicians who will be well aware of the limitations but he still needs a 60 percent majority to pass the FC. With parliamentary elections coming up its likely he will get concessions from Merkel.
Whether the Growth element is by way of Protocol, codicil or other device the fact remains that we are being asked to vote on an incomplete Compact. Of course we could get an entirely seperate Growth Compact…and as grumpy says, the competent bodies (to which we are about to cede sovereignty) may decide for us.

Conor Brady has an interesting piece on group think in the media.

A similar analysis could be extended to cover various growth initiatives promoted in Ireland. Policies without failure tests.

If what the FT blog claims is accurate, Gilmore is merely following the habits of Official Ireland. Habits tend towards the uncritical logically.

@ Jagdip

France has professional politicians too. Like Irish ones, rhetoric and actual delivery may be slightly different. Any renegotiation will be the end of Merkel. Any growth compact will be as a separate agreement, which will allow both sides to paint it as a ‘victory’.

@Jagdip
Looked at Bloomberg again and they are selling at 21.66 for a yield of 21.88%.
?. Banks are taking a hammering in Greece today.

“The agreements must be adhered to. They are the best way forward for Greece,» Chancellor Angela Merkel’s spokesman Steffen Seibert said during a regular news conference.”

Angela didn’t notice that 60% of the electorate decided otherwise.

I see that her German task force of 40 hotshots are having difficulty with office accommodation in Athens. Apparently the Public sector workers don’t want them in the building..fearing for their own safety.

@BEB
“Any renegotiation will be the end of Merkel”

Who do you think is in charge ?
The bond vigilante medicine doesn’t appear to be working.

@Eoin

“Das geht einfach nicht” and “Der Fiskalpakt ist beschlossen und muss jetzt weiterbearbeitet werden” says Chancellor Merkel in today’s leading German broadsheet.

Or “It [renegotiation of the Compact] simply isn’t going to happen” and “The Fiscal Compact is agreed and must now be progressed”

Obviously there is no sense that a Government politician in Ireland would have the luxury of adopting such a position, but could we now take advantage of all those alliances that Eamon and Lucinda have been forging since coming to office over a year ago, and present something like a unified front with France?

@Jagdip

“Das geht einfach nicht” is political posturing. She is hardly going to say “Selbstverständlich, Francois”. Not on the Monday anyway.
At the end of the day the EZ economy is bigger than the bondwallahs. Most of the bluechips who sell into Europe are looking at minimal growth for the foreseeable. If China doesn’t manage to keep the global economy going they’ll look for another way of doing things.

We may be asking too much if we think that whereas the ENArques at SocGen screwed us, an ENArgue at the Elysee is going to save us.

@seafoid
“If China doesn’t manage to keep the global economy going they’ll look for another way of doing things.”
Serious question! Is “they” the EU/IMF/US etc or the bluechips and secondly what do you think will be “the new way of doing things”?

Jagdip Singh Says:
May 7th, 2012 at 2:22 pm
…. could we now take advantage of all those alliances that Eamon and Lucinda have been forging since coming to office over a year ago, and present something like a unified front with France?

ROFLMAO!

Merkel is a “Wendehals”, with no convictions whatsoever, and she is going to change her stance as you your socks if it enables her to stay in power.

@Eoin
“Any growth compact will be as a separate agreement, which will allow both sides to paint it as a ‘victory’.”
Which I think is as it should be. While maintaining a structural fiscal balance over the cycle (whatever that turns out to be) is a goal in itself, so is continued cohesion funding.

It is not enough to ever say “this country doesn’t need help” particularly since shocks tend to affect the construction sector disproportionately and so are amenable to smoothing through infrastructure spending. Aside from local benefits, the benefits to, for example, integrated power, telecommunications and communications should help the european economy as a whole. As many national projects are beyond private sector financing, so trans-national projects are probably beyond national funding.

@ Shaun Byrne

I think there are more than a few CEOs who are not happy with the ongoing mess that is the EZ. The crisis is into its 4th year now. Confidence is a very fragile flower and without confidence companies can’t sell their stuff. There are things that can be done with banking restructures and getting credit out to companies that need it. There may be a crisis but that doesn’t mean there should be any shortage of imagination.

I can’t see France or the Netherlands getting the treatment Ireland got. Maybe we’ll have a bond crash. “Who shall be happy” is a great play.

PS I meant to add, a separate growth pact would also have the advantage of allowing for asynchronous shocks – where some parts of the EU or eurozone are affected, but not others. It relieves the ECB, to some degree, of using the bluntness of interest rates with the negative side-effects they can have.

Hollande’s role will be judged more on the way he can protect taxpayers from pillage by the financial sector in the ensuing wind down and contraction effecting most of the large trading economies eg Japan, USA, and especially the EMU with the unwieldy disparities between the core and the periphery and faultlines in the design of the euro.

The ‘growth’ fantasy has been around for some time. For example, it was used to justify NAMA. More recently the unconscionable bailout for Ireland leveraged the ‘growth’ myth to punish taxpayers into complying with draconian and machiavellian obligations that gave austerity to taxpayers protecting the financial sector to the point of €200K salaries for administrators of failed, zombie banks.

Japan is running into problems http://www.economist.com/node/18988858
Not least because of an aging population and the closure of the nuclear sector. Its been a major investor in US T bonds over the past number of years while China has reduced its holdings of same. The US since 2008 still struggles. Growth in China has been slowing. It would appear major global currencies that have benefited from loose currency controls and floating exchange rates are about to face a loss of confidence.

The euro is a weak point that markets have taken a confidence nose dive in. Its a false hope that austerity will lead to growth in the present climate. Its a mantra designed to hide the party currently being enjoyed by the financial sector at the expense of taxpayers throughout the EMU. Holland will need to face the ‘out of control’ financial sector and drive through the reforms required to make it fit for purpose.

It’s hard to overestimate the incompetence of the governments European diplomacy since it came to office.

We had Endas Celtic Spat that namawinelake reports as costing us millions.
Noonans jig with the ECB that accomplished nothing.
Phil Hogans botched up the household charge which risks damaging future prospects for a property tax proper and slobbering over the water meters.
Then they arrange the vote on this bloody thing after that PR nightmare, before a Greek vote and the likely victory of Hollande.

They are now adding voice to the calls for growth in Europe but without much credibility as they have been caught advocating the stick without the carrot at home. So a Yes vote could even hamper France in its negotiations with Germnay or at least not help, while a no vote will help paint us as irresponsible in Europe, making life unpredictable for us.

All in all having this vote so soon has weakened our position.

@ Tull

“However, even if there was no treaty we would have to balance the budget. My own hope is for a no vote and a rapid cull of the national herd of sacred cows”.

I am tempted by the last option myself. However, it brought to mind the “Falstaffian” nature of the Irish psyche.

Falstaff: ‘The better part of valour is discretion; in the which better part I have saved my life.’

Shakespeare, in Henry IV, Part One, 1596:

The average voter will retain nothing of the debate other than (i) they can go ahead without us (ii) we need the money and there is no point in putting it at risk.

Is it possible to eradicate the structural deficit and meet the obligations of the bank guarantee, including underwriting NAMA, with a sizeable slice of the EU in economic decline?

@ DOD

Just when you thought they couldn’t do anything that stupid – guess what?

One can see a no argument in the making: Vote down the treaty to provide Hollande with the maximum leverage and space in his efforts to renegotiate it.

Hollande will need to maintain a tough line through his parliamentary elections in June so this will not be resolved before the referendum

Don’t you worry ,no amount of lobbying by Dublin will make any difference whatsoever .

+1 to John Corcoran above

Upward only rent reviews indicate the frontline of interests of the financial sector vs interests of SME’s, potential SME’s and their employees. The balance sheets of banks on their asset side mark commercial property to market based on the quality and amount of the rent/lease yield. If those rent/leasehold yields go down due to abandonment or renegotiation of upward only rent views, the balance sheets of banks get marked down.

When it comes to choosing between the financial services/banks and the needs of SME’s, guess who’ll be supported? Good the unions have signalled a vote NO.

Re ‘Tell me it isn’t so’ , I did listen to Lucinda Creighton TD Minister of State for European Affairs on News at One today. When it was put to her that Hollande had said he would not ratify the Fiscal Compact, she took issue with this. Its clearly not beyond belief they would prefer Hollande to leave the FC as it is.

Its embarrassing enough for Labour/Fine Gael that Hollande has indicated he wishes changes to be made to the FC and they have backed the wrong side. Clearly Labour/Fine Gael should be put on the spot and questioned on whether they support Merkel’s refusal to consider changes to FC, or Hollande’s position.

IT would appear at the moment they speak with forked tongue and support both Hollande’s position and the MErkel position of refusal to allow changes to FC 🙂

Stay away from the FC, its Hamlet’s

“’tis an unweeded garden,
That grows to seed; things rank and gross in nature
Possess it merely.”

Ireland has its bailout. If its not working (its failed), renegotiate it, we’ve no need to be blackmailed into one that is bigger, even more gross, worse than the first 🙂

Whats shocking about it?

The only thing thats shocking is that FG and LAB were elected and people expected that this time they’d run the country different to Fianna Fail.

Never happened before, so why would it happen now.

FG and LAB show no imagination in govt. Its part of the reason that FF always kept on coming back.

And only for SF fianna Fail would be looking at a return to power in 3 years time.

Willem Buiter had a good piece of advice for European politicians in a VOX-EU interview he gave: If you don’t understand what is going on then keep your mouth shut.

I can understand where Gilmore is coming from, viz. the treaty may increase stability in Europe and move us towards a managed resolution of our problems in the future. Also, politicians always keep voicing unwavering support for a position they have previously adopted because they know that all inititives are a work in progress and you can’t get anything done if you look for perfection at every stage. Furthermore, it may be Gilmore’s expectation that the referendum may be defeated and he does not want the Govt to be lamed by the Germans et al if and when that happens.

Overall though, I think he should have kept shtum rather than contradicting the leader of France.

@Eoin

AFAIK the Fiscal Compact only suggests that the debt brake be given constitutional status. The referendum will not make all aspects of the Treaty constitutional imperatives. Therefore the suggestion that any additional growth clauses would be put in the constitution is probably incorrect. They would merely be immune from being deemed unconstitutional.

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