We have previously referred to the meetings organised by Joint Oireachtas Committee on European Union Affairs to discuss the Treaty on Stability, Coordination and Governance. The sub-committee has now published its report on the meetings and it can be read here.
7 replies on “Oireachtas Report on TSCG”
An Taoiseach’s submission gets to the crux of the matter, almost.
He says (p.52) that is is a myth that the Treaty is a recipe for perpetual austerity as every government ‘retains the right to tax and spend in whatever way they perceive to be in their country’s best interests’.
But no government can determine the amount of taxation it receives, which is dependent on the level of activity of the private sector. If that abruptly falls, so will taxation revenues. This is why countries such as Ireland and Spain went from strong fiscal positions to extreme negative ones in the crisis.
It’s no use arguing that this was all an unsustainable boom. Nothig in the current Treaty can prevent a repetition of that.
Since no government can control the private sector’s level of activity, but it can control its own level of investment expenditure, it is this that should be used to regulate the pace of aggregate activity, and thereby the fiscal balance.
Pretending that government finances are atonomous from private secor activity is to repeat the self-delusion that has perpetuated the Depression in Ireland.
What a pathetic confection made up, in various parts, of special pleading, deliberate obfuscation, diplomatic-speak, evasion, or transfer of, of responsibility, woolly-thinking, political posturing, delusion and hand-wringing with the occasional nugget of rational analysis (though far too limited in focus to have any real impact) mainly provided by your good self and Philip Lane.
Is it any wonder that so many people have no faith whatsoever in the political process?
There are a number of contentions for which, though many people will contest or deny them (for various self-interested reasons), considerable supporting evidence exists:
1. EMU was an ‘act of faith’. It was based on the sovereign signature of all members that they would behave responsibly. This undertaking was advanced as an appropriate substitute for the necessary institutions and procedures that should have been established. Voters in some countries were justifiably sceptical – and had legitimate doubts (based on long experience) that some other countries would not behave in compliance with the disciplines required. But their governing politcians assured them all the necessary arrangements were in place. A sudden stop in funding revealed the flaws.
2. To varying extents governing politicians and policy-makers throughout the EU succumbed to the fiction of ‘light-handed’ bank supervision and financial regulation peddled by the Neocons and their financial capitalist allies under the convenient cover of neo-liberalism – aided and abetted by not a few useful idiot economists. This was consumated as a Faustian pact between financial capitalism and sovereign governments that has proved damnably difficult to unwind when the crisis struck.
3. The Fiscal Compact is just the first serious institutional and procedural step of many to begin to unwind this Faustian pact. The sequencing of these steps is partly politically in the sense that is driven to secure the consent of previously sceptical, and then misled, voters in the creditor countries to the taking of further institutional and procedural steps. It is also intended to re-balance the economic power exercised by bond market participants and soversign governments.
4. The process of resolving the Euro crisis will be long drawn-out. It has been many years in the making. Structural reforms, rational policy and regulation in the infrastructure and utility sectors and meaningful steps to complete the internal will all be required to counteract the fiscal adjustments required.
The proceedings of this Oireachtas Cttee seem to be dealing with another planet. What a waste of time and effort.
@ Paul Hunt
Not to mention the nice photographs!
In response to questions The Taoiseach made some more strange glove puppet like noises about the ESM today.
This is a full scale seizure of fiat money by the banks !!
This is the most serious and terminal attack on sovereignty to date.
It must be stopped before they wipe us all out.
Shame we elected a leprechaun who utters meaningless retoric
bilbo.economicoutlook.net/blog/?p=19429
@Micheal
The private sector activity is governed by commercial banks production of credit…..its not governed by the private sector as a whole – however this is not money although it functions as a money proxy.
The goal of a functioning society is to try and keep the money supply relatively stable.
I hope this piece of “confectionary” as Paul Hunt calls it did not cost any money to produce!
I think you’re all a bit tough – I confess to just reading the exec summary but I thought it summarises all the arguments on both sides in a balanced manner. I think this is useful in helping to think through the issues – but admisttedly of no use to people who’ve already made up their minds