Tom O’Connor Versus Seamus Coffey on the Fiscal Treaty

Tom O’Connor sets out his views on the Fiscal Treaty here.   Seamus Coffey sets the record straight in a detailed response here.

42 replies on “Tom O’Connor Versus Seamus Coffey on the Fiscal Treaty”

@ DO’D

+1

John & co. are sounding more desperate by the day (although Y vote is still likely to prevail I guess). I’m in favour of the democratic right of the Irish people to vote on the FC….but the barrage of propaganda from JMcH and others in Official Ireland is at unbelievable (unacceptable) levels.

John,

“Sorry guys, I am not neutral with regard to the truth.”

Seriously? Not much point in having a debate here then. Shame on you for having that level of arrogance.

Hey John – You’re an economist! Most of you guys (and a few gals) are ontologically incapable of perceiving, let alone handling, the truth – methinks a modest touch of epistemologial realism is in order?

Blind Biddy is available for a brief tutorial in the spirit of expanding the limits of your .. er .. discipline.

That said, keep up the good work.

“Sorry guys, I am not neutral with regard to the truth.”

John, I hope that sentence gets quoted in the mainstream media.

Let’s have a debate on “truth”….Actually, dare you to put up a heading here for discussion on “truth”.

Undercard to the Coffey/O’Connor bout ….

Paul Krugman on Euro Rescue Efforts – Der Spiegel Interview

‘Right Now, We Need Expansion’
In a SPIEGEL interview, Nobel Prize-winning economist Paul Krugman argues that this is not the time to worry about debt and inflation. To save the euro zone, he argues that the European Central Bank should loosen monetary policy and the German government should abandon austerity.

http://www.spiegel.de/international/business/interview-with-economist-paul-krugman-on-euro-zone-rescue-efforts-a-834566.html

@The Dork
‘For the first time in history, Germany issued long term bonds with a zero percent coupon rate on Wednesday. The demand reveals the deep concerns investors have about the euro zone and their desire for a safe place to park their capital — even if it costs them money to do so.

… Yet even as investors seek safety, analysts are concerned that the low interest rates will produce a bubble. “If this isn’t a speculation bubble, then I don’t know what a speculation bubble is,” Marc Oswald, research analyst at Monument Securities, told the Berlin daily Morgenpost. He expects the move to drive investors towards hard assets like real estate, gold and art. Pension funds and other institutional investors will suffer, however, as they are required to put a certain percentage of their assets into state bonds.

Oswald also says that the move is a sign that paper money has no meaning anymore. Pretty soon, he says, central banks could be forced to step back in time to the 1970’s when gold anchored paper money.

http://www.spiegel.de/international/germany/germany-issues-long-term-zero-rate-bonds-a-834679.html

@v barrett

If he fills in the name and email fields I would have thought he would indeed have a right of reply.

@J Mch
Did you ever get anywhere with Gavin B wrt questions raised about the constitution and retrospection, propery rights, “unjust attack”, “necessitated by obligations”, bodies other than the Commission in the future being “competent under the Treaty” and all that jazz? I don’t think he popped up in comments.

@The Dork

Oh for the good ol days of the men of no property … there is something seriously awry with the Earthlings conception of value … Seven_of_9 reckons we are seriously backward and that a couple of Ferengi are pulling all the matrixsQuidesque strings in the background … The Federation, apparently, still has a no-fly zone around the place due to the dangers of galactic contagion …

Oops!

While the remarks by Van Rompuy may seem rather anodyne, the degree of agreement can be gauged from the precision, or lack of it, in relation to particular issues. That eurobonds, EU wide bank resolution and guarantee deposit schemes mad it in at all is remarkable.

That changes to the TSCG did not not must be the biggest piece of non-news imaginable.

@DO’D

Given that you were the one originally referencing Tom O’Connor’s piece, any views as to Seamus Coffey’s detailed critique?
Or is your epistemology so modest as to not allow you comment on matters of fact?

Tom O’Connor’s article is a poor effort to enlighten the readers of ‘de paper.’

At least give a conclusion – yes or no.

He has an obligation at least to respond to Seamus Coffey’s points as he wished to have his views published.

@ David O’Donnell

If Mrs Merkel does a volte-face on eurobonds in a few months time, wouldn’t it be a bit leprechaunic to expect them to come gift-wrapped without any strings?

So after a rejection of the treaty, would you expect us to be invited to join the party?

Looked at from a national perspective, the Fiscal Treaty is another case of the EU facilitating doing something which we should be doing anyway.

The weaknesses of Irish political culture are well documented in political science literature – a weak parliament excessively dominated by the executive; an electoral system that ensures primacy of local considerations over national interests; a party system that encourages lobbying by vested interest groups as a substitute for broader civic engagement in respect of debate on optimal choices in public policy formation. Skillfully analysed in ‘Irish Governance in Crisis’, edited by Niamh Hardiman and published earlier this year, the deficiencies in Irish political culture make pro-cyclical fiscal policy choices almost inevitable. Further, in Hardiman’s view – and something that John Mc Hale might be expected to have some interesting perspective on – the establishment of the Fiscal Advisory Council, on its own, is insufficient to correct this pro-cyclical policy bias in government.

Moreover, the debate on the Fiscal Treaty might usefully refocus on the question which we, the Irish people are being asked to address; which is about whether or not the rules as defined in that Treaty are acceptable to us as a way of preventing this present government, and its successors, from blowing the state’s finances for their own party’s political and electoral benefit in the future. What we’re not being asked to do, as Independent TD Stephen Donnelly pointed out on radio last week, is to solve Europe’s problem; because we can’t. That said, we can’t ignore hte wider context of the growing crisis around Greece and related polticial developments throughout the eurozone as they affect this Treaty.

So with less than a week to go, I ‘m still not sure as to how I will vote in this referendum.

First, I think the Treaty itself is deeply flawed – many of those flaws have been identified and ably critiqued by contributors on this site over the past several months so there’s no argument on that score. I would have thought that, as a people, we would have learned enough by now about affording constitutional status to flawed proposals.

Second, if the fiscal rules treaty was the third leg of a stool, so to speak, of an overall solution for the eurozone mess, such as the introduction of euorbonds and a growth pact, then a ‘yes’ vote would make a lot of sense to me. But it’s not. There is no guarantee, either, that it will be and the outcome of yesterday’s Summit does not engender confidence.

Third, the referendum debate has been no help at all. The government parties’ strategy and approach has been nothing short of appalling in its condescension towards citizens, its hectoring of any opposing views to its own and its disingenuousness on the facts. The ‘no’ side haven’t much going for them either. Sinn Fein’s approach, in particular, is a mirror image of the Labour Party’s negative populist policy on the national crisis when that party were in opposition – say whatever you like, oppose every idea, so long as it hoovers up the votes – and we can see where that has ultimately left the LP!

Finally, it’s clear that the referendum is mistimed. Given the turn of events in Europe, it would be better to postpone the referendum until the Autumn. The Government could, if it wished to do so, have introduced a short amending Bill to the 1994 Referendum Act. They rejected that option. I happen to think that they have compounded their mistake on the timing of the referendum in the process.

Meanwhile, many thanks to Philip Lane and John McHale and the other economists on this site for generating so much information and useful debate on the decision we are being asked to make in this referendum. They have provided a genuine public service – even if I’m still undecided!

I didn’t realise the Dáil were taking two weeks off because there’s a referendum! I really must go into politics. They get better holidays than teachers….. oh, most of them were teachers….

@goodgrief

I’ve commented on both this blog and on CorkEconomics – this is a dispute on the genealogy of Angela’s Fiscal Corset – there are wittgensteinian family resemblances but neither changes the key ‘norms’ not ‘facts’ – my main interest lies in the nonsensical nature of its key constraints – which are essentially German ‘norms’, have no innate or empirical social scientific economic validity, and to have such dodgy norms imposed on an Irish Debt buden (a fact), without a deal on odious debt, is madness.

@Michael Hennigan

Would not make one whit of difference. Discussion of EuroBonds must wait for SPD/GP Gov in Germany.

But I would welcome the opportunity of discussion with Angela re dodgy capital flows from the core to Ireland and how Irish citizenry lumped with the German equivalent of €1.5 trillion, and what an Irish default, in the kantian spirit of detente, would do to the EuroZone. Blind Biddy would make a better fist of this explanation to Der Spiegel than the present or previous lot – our EU Information strategy is dire and appears to be based on the illusion that The Skibbereen Eagle and The Castlebar Chronic_le are avidly devoured in Berlin, Brussels, Frankfurt, Rome and Madrid etc

Twould get it on the agenda – problem is what our supine lot could do with the opportunity …

@veronica

If you do not mind me saying this it appears that you already know you should vote “No” from both a pragmatic and an idealistic stance but you are reluctant to defy the establishment position because of the social cost.

Pragmatically the Fiscal Compact encourages pro-cyclical behaviour (especially on the way down), it does not address the causes of the current crisis (the behaviour and power of the financial sector, the level of private indebtedness, the structure of EMU) and it sets a strong precedent for Ireland and the smaller countries being subject to policy initiatives which they have no part in formulating.

Idealistically everything about the Fiscal Compact is regressive, the way it was formulated, its intent (legally enforcing doctrinaire neoliberalism) and the effect it has had on the cohesiveness of the people of Europe (as opposed to their ever more cosy ruling classes).

I think much of Ireland’s middle and upper classes find themselves in a similar bind, torn between class interests in maintaining the status quo and the realization that the EU status quo is a process as much as a condition. The process means the gradual defeat of the progressive elements of the EU project by reactionary ones and accepting a significant difference in the loss of sovereignty between smaller states and larger ones. It is clear that Germany is leveraging its sovereignty, while we have lent ours without condition.

This is about more than money and access to the ESM will not compensate us for the loss of the progressive qualities of the EU. As a small country it is vital for us that it does not become a club for bullys.

“The Fiscal Treaty is a normal intergovernmental treaty which the member states are perfectly entitled to agree with each other in international law”

No, it certainly is not. For example, the ESM will have an authorized stock of ¢700 bn, but where will this come from? What powers does this give ESM, what binding laws on Ireland’s economy does it give itself?

http://www.youtube.com/watch?v=gNa5k0KCVbw

Unfortunately, AG Marie Whelan has not published her reasons for calling a referendum, but I’m guessing, perhaps AG Marie Whelan noticed the following in our constitution and saw the stranglehold of the treaty’s hands on 2.1:

2. 1° The sole and exclusive power of making laws for the State is hereby vested in the Oireachtas: no other legislative authority has power to make laws for the State.”

Delighted to see the Pringle case, but I hope it covers more than Article 3 TFEU.

In fact, those of us who recall Maastricht know that at the core of the debate for and against, was a similar concern that focused on ’subsidiarity’

http://en.wikipedia.org/wiki/Subsidiarity#General_principle_of_European_Union_law

“The concept of subsidiarity therefore has both a legal and a political dimension. Consequently, there are varying views as to its legal and political consequences, and various criteria are put forward explaining the content of the principle. For example:[citation needed] The action must be necessary because actions of individuals or member-state governments alone will not achieve the objectives of the action (the sufficiency criterion) The action must bring added value over and above what could be achieved by individual or member-state government action alone (the benefit criterion). Decisions should be taken as closely as possible to the citizen (the close to the citizen criterion) The action should secure greater freedoms for the individual (the autonomy criterion). [edit]Court of Justice The Court of Justice of the European Union in Luxembourg is the authority that has to decide whether a regulation falls within the exclusive competence of the Union. As the concept of subsidiarity has a political as well as a legal dimension, the Court of Justice has a reserved attitude toward judging whether EU legislation is consistent with the concept. The Court will examine only marginally whether the principle is fulfilled. A detailed explanation of the legislation is not required; it is enough that the EU institutions explain why national legislation seems inadequate and that Union law has an added value.”

FC is in clear breach of the following:

1. The action must be necessary because actions of individuals or member-state governments alone will not achieve the objectives of the action (the sufficiency criterion)

2. The action must bring added value over and above what could be achieved by individual or member-state government action alone (the benefit criterion).

3. Decisions should be taken as closely as possible to the citizen (the close to the citizen criterion)

4. The action should secure greater freedoms for the individual (the autonomy criterion).

The blackmail clause is clearly in breach of 4, 3 and in breach of other parts of the Treaty guaranteeing the right to bailout of members of the EMU, but above is enough for now.

@DO’D
“there are wittgensteinian family resemblances but neither changes the key ‘norms’ not ‘facts’ – my main interest lies in the nonsensical nature of its key constraints – which are essentially German ‘norms’, have no innate or empirical social scientific economic validity, and to have such dodgy norms imposed on an Irish Debt buden (a fact), without a deal on odious debt, is madness.”

Your main interest may lie elsewhere but this thread is about SC’s comments on TO’C’s article.
Interested that you seem to contemplate the imposition of dodgy norms in exchange for a deal on odious debt.
I know Ludwig had a one armed piano playing brother but not sure what family resemblances you are talking about?

Paul W Says:

John & co. are sounding more desperate by the day

(Actuary Says:

May 23rd, 2012 at 10:09 pm
Nice piece of priming John

I thought we had agreed to cut out the ad hom stuff

@ Shay Begorrah

“If you do not mind me saying this it appears that you already know you should vote “No” from both a pragmatic and an idealistic stance but you are reluctant to defy the establishment position because of the social cost…”

Shay, I do mind! But I’m sure you didn’t wish to come across as patronising?

As a matter of form, I challenge every idea – from left, right, centre and especially ‘establishment’- which makes me, putting it politely, a right awkward old biddy at the best of times.

As a citizen, I find the choice between ‘yes’ and ‘no’ quite difficult. It’s as much a political decision as an economic one, as you rightly point out. The rhetoric of both the ‘yes ‘ and ‘no’ camps, respectively, isn’t much help to ordinary folk like me seeking to reason their way to a decision on how to vote next Thursday.

Nor do I go along with the view that the FST has been foisted on poor little innocent Ireland by those nasty big stick-wielding states that want to rob us of the last vestiges of our sovereignty, not that sovereignty is all it’s cracked up to be in this age of global interdependence anyway. I guess my great fear is that those who are in a position to step forward and say: “Right, here’s what we’re going to do, and for good or ill so be it” either don’t have the capacity , or are unwilling, or afraid, to do so. Also, there’s a growing suspicion that the political establishment, both here and in the EU, don’t know what to do or are more concerned with appeasing their local/national constituencies than facing up to the multi-faceted decisions required to bring a stop to this crisis. So they’re muddling through, and muddling isn’t doing anyone, in Greece, Ireland or anywhere else in the EU, any good at all.

All very well said, Veronica. That about sums it up for many. However, at a time when Ireland is contracting and in deep recession, for me the issue with the FC is primarily its timing and its inflexibility at a time when max. economic and strategic flexibility is required. However, no choice is being given to the people on timing. There is a bullying element inherent in this that is just not right.

Beyond that, a Y vote now does away with Ireland’s option to challenge the odious debt element that it has been unfairly lumped with. It takes away the possibility of any negotiation on this in the future. Clearly, a major complaint /objection of the N side has been this aspect. The likes of CMcC have arrived at an “on balance” Y support despite the very mistaken guarantee underpinning this aspect of Ireland’s debt burden. Not everyone is so accepting of such an approach.

Beyond that, I agree “the Fiscal Treaty is another case of the EU facilitating doing something which we should be doing anyway”.

However, if it is Y, then “for good or ill so be it”…End of argument (with no 2nd bite at a N if this ‘experiment’ does not turn out for the better).

@veronica on my attempt to deploy mind reading powers.

Shay, I do mind! But I’m sure you didn’t wish to come across as patronising?

I aim fo challenging rather than patronizing, so my apologies.

Nor do I go along with the view that the FST has been foisted on poor little innocent Ireland by those nasty big stick-wielding states that want to rob us of the last vestiges of our sovereignty, not that sovereignty is all it’s cracked up to be in this age of global interdependence anyway.

There I beg to differ, at least slightly. I think that in this case sovereignty is a proxy for popular democratic control and that much of the talk of the complex requirements of existing in a Europe of globalization, pooled sovereignty and mutual interdependency is an attempt to move policy formulation further from the hoi-polloi and into the hands of people and institutions more receptive to the needs of the business generally and the wealthy and mobile particularly. It is a power grab.

As for the big sticks Germany is certainly practicing economic imperialism (and unapologetically so, they are true neoliberal believers) and the ECB are equally certainly much more alert to the needs of the core’s financial sector than the great unwashed in the periphery. The continuation of these policies can only be negative for Ireland and a No vote might help us halt, if not reverse, them.

@ Paul W,

You say: “a Y vote now does away with Ireland’s option to challenge the odious debt element that it has been unfairly lumped with. It takes away the possibility of any negotiation on this in the future.”

Please correct me if I’m wrong, but I’ve come to the conclusion that there isn’t , and never was, short of a ‘structured default’ or as part of an overall EU solution for the Eurozone banks crisis generally, any possibility of transferring or alleviating the debt burden arising from our own banking collapse. If our government was honest, they would admit that to be the case. But they can’t be honest because of self-serving party political promises made during the 2011 general election.

Same applies to the argument about requiring an extension of the bailout, or second bailout, when the agreement with the Troika expires. By any reasonable interpretation of the current state of play, it’s inevitable that Ireland will require such assistance irrespective of ‘Yes’ or ‘No’ to the FST. However, it mightn’t be so readily in prospect if an overall solution encompassing an ESM mechanism for direct bank support, eurobonds and the proposed fiscal treaty plus a growth strategy etc. were rolled into a single package and there was certainty about such a strategy being rapidly brought forward to resolve the crisis?

Despite its flaws, I think I could vote for the FST if that were the context. Then again, I’m probably oversimplifying a very complex set of measures and expecting too much, too soon.

@ Veronica
I agree that a Y vote would be far less problematic if there was such an overall context and plan. However, there is not and there’s no sign of anything like that in the foreseeable future.

Who knows what will/will not be possible in the coming months. That’s the point. Why tie Ireland’s hands now? I agree that there will need to be a 2nd bailout in any event, Y or N. The scare tactics re lack of funding in case of a N vote is simply wrong. Obviously, there are those in the Y camp who do not agree with that (I wonder how many of them here are remunerated from the public purse?)……but the political ‘price’ being asked is a big one, while the economic cost (particularly in terms of embracing the odious debt) is not insignifcant either. And in return for what? Some short term liquidity /more debt….with no real overall EZ solution or even strategy in sight; with an Irish Govt strategy based on continued EU welfare dependency and no meaningful domestic reform on the horizon either other than artifical propping up of the status quo.

The risks are great either way, as acknowledged previously even by JMcK. However, where is Ireland’s negotiating strategy, where has ‘best boy in class’ got the country thus far, bar deeper EU welfare dependency and an artificial, feathered status quo?

In the meaantime, the country gets weaker, not stronger, whle the external environment deteriorates further and further also. As the hole gets bigger, there will be a harder fall when reality is demanded (probably imposed by Ireland’s EU masters….coming soon, probably 2013 around the 2nd bailout).

@ Veronica
Of course when I say EU “welfare”, it is less benign that that…..it is credit, and Ireland’s creditors’ primary interest in Ireland is debt service.

Therefore, the other thing that bothers me generally about the present debtor situation of Ireland and the other PIIGS is the 19th Century or even feudal – slavery approach to debt service currently being pursued our northern brethern /EU. Modern debt /insolvency resolution logic has been completely usurped and, in the context of the FC, it can be argued that the debtor PIIGS in particular are being asked to ‘voluntarily’ sign even more rigorous bondage papers, without any leniency (or latitude) for ‘good behaviour’. In that context, the FC is not benign. The context in which it is being applied is not wholly constructive, as some of the Y camp would have one believe, with some prescribing economic self-flagellation to atone for past sins and errors.

I must admit that I find it hard to do slavery or self-flagellation, even if I am told by our (economically well feathered) Almighty Priests that it is good and necessary for the soul.

@Paul W and Shay,

Thanks for responding to the points I raised. I don’t want to ‘hog’ the thread and turn it into a thing about my personal voting angst. Suffice to say I think it’s easy for people to succumb to paranoia about ‘them’ and ‘us’. With ‘them’, principally the German political class, cast as the primary villains of the piece and ‘us’ those ‘ordinary working people’ who are being done over by neo-liberal ideologues who persist in the delusion that somehow or other they can bring things back to where they were before the fateful summer of 2008. They can’t. The conspiracy numpties are equally deluded in my view. I also agree with you Paul; masochism isn’t much of a policy either.

We’re in a situation, though, that we can’t get out of our predicament by ourselves. A ‘Yes’ or ‘No’ vote makes little difference to that.

I believe that the government has made a massive error in deciding to hold the vote early and then being obdurate about sticking with the chosen date. For a country in our position, I think we would have been better off not to vote on this Treaty until the Autumn when the broader ‘lie of the land’ in the eurozone is more clear than it is now. Since we have embassies all over the EU to act as ‘listening posts’ (except in the Vatican!) surely our political establishment is not living in such splendid isolation as to be oblivious to political signals as to how things might play out in Greece, Holland, Portugal, Spain, even the German Bundestag itself?

The ‘No’ side may be as disparate and, in some instances’ as mad as several cats in a sack; but the onus is on the government parties to make the case for a ‘Yes’ vote. Their PR strategy, founded on stupid photo opportunities, convenient slogans and light weight spin involving oversimplification of some pretty serious issues, has been an absolute disaster.

It’s hard to credit, given the way individual ministers have floundered in successive public debates on the FST, that anyone in government believes in what they are proposing. As that ‘awkward ould biddy’, I tend to get the hump when I hear people coming out with blatant spin on either side of the argument. It’s unforgiveable to watch a parade of members of the government oozing patent insincerity – e.g. Creighton, Burton, Bruton, Noonan, Hayes, Kenny, Gilmore etc. – and expecting citizens to take their word that they know best.

So unless somebody in government comes up with a political killer punch reason for voting ‘yes’ over the next four days, I’ve decided I’m voting ‘no’ on Thursday.

It’s not a vote for the extreme left, the anti-government or anti-EU establishment in this country, the communists, the socialists, the Sinn Fein opportunists or anyone else with a ‘no’ agenda. It’s not just that this is a Treaty that does not justify constitutional protection as it stands. The message of my ‘no’ vote is: come back to me in the Autumn with a deal that includes a growth pact, the promise of eurobonds and some resolution mechanism for EU banks that won’t reduce us all to penury and even if it implies more austerity in the medium term, I’ll happily vote ‘yes’. Richard Bruton would probably like that!

@Veronica

‘The message of my ‘no’ vote is: come back to me in the Autumn with a deal that includes a growth pact, the promise of eurobonds and some resolution mechanism for EU banks that won’t reduce us all to penury and even if it implies more austerity in the medium term, I’ll happily vote ‘yes’.’

Blind Biddy says Hi!

If the shoe was on the other foot, would Irish taxpayers be happy to meet the bill repeatedly for Greece etc?

Ireland has only ever had the alms bowl out when the ‘big’ countries are in town, it can’t imagine having to cough up. When some look at Germany, they look on with envy. Not that they envy the thrift and austerity Germany accepted for a ten years, the just envy they just envy the rewards.

The Irish government retires public servants in an effort to cut costs. Only a fruitcake would accept such actions as a measure of austerity in Ireland.

FYI II

The cases for and against ratification of fiscal treaty
By Tom O’Connor

Thursday, May 24, 2012 The Neu Paper of Record

THE Government has been keen to point out that Ireland would not be able to draw money from the European Stability Mechanism if it doesn’t ratify the fiscal treaty. Sinn Féin, the United Left Alliance, and groups of other economists — most notably Terence McDonough of NUI Galway, Michael Taft of Unite, and Andy Story from UCD — suggest there are choices post-2013 regarding further bailout funding, even if we reject the treaty.


The huge level of Irish government debt suggests a further reason why a no vote may not be a bad idea. Basically, many would argue that Ireland’s debt by 2013 standing at €202bn and increasing, with an increasing interest rate exceeding 5%, is unsustainable. As such, it might be better to plan to reduce it now through an orderly restructuring. This would make Ireland plc more sustainable and reduce the growing absorption of tax revenue to service debt interest payments from 15% in 2011 to over 20% in 2015.

Economists such as Nouriel Roubini have argued that countries like Ireland should work with the IMF and use its sovereign debt restructuring mechanism. This would allow Ireland to make an offer to its creditors. A deal could be struck to significantly reduce the €31bn promissory note to Anglo and to impose writedowns on senior bondholders in the other financial institutions. This could be done for the €65bn cost of the bank bailout. Indeed, Central Bank governor Patrick Honohan has insisted that a deal must be done on the promissory note.

http://www.irishexaminer.com/analysis/the-cases-for-and-against-ratification-of-fiscal-treaty-194889.html

No vote a first step towards growth

By Michael Taft

Friday, May 25, 2012 in The Neu Paper of Record

The kernels of the crisis, bank debt and growth, are not in the treaty, writes Michael Taft

THERE are two forces driving the European crisis. The first is the continuing instability in the European banking system. The second is the spectre of low growth and stagnation. The fiscal treaty has nothing to say about the banking crisis and it will make the low-growth crisis even worse.

That is why the fiscal treaty is bad for Ireland and bad for Europe.

The fundamental flaw of the treaty is that it badly misdiagnoses the European “disease”. It mistakenly assumes the crisis started with state debt. Instead, the crisis was started by the private debt of badly regulated and profligate financial institutions — a situation we know all too well here.

http://www.irishexaminer.com/analysis/no-vote-a-first-step-towards-growth-195087.html

+1

Grumpy – your question re bodies competent under the Treaty was answered very well by the Chair of the Referendum Commission on Morning Ireland this morning. Judge Feeney cleared up a lot of questions and it might be worthwhile for anyone still feeling a little (or very!) confused about the Treaty to listen to the interview on RTE Radio player. No great mystery about bodies competent – it just refers to bodies like the Commission or the European Court of Justice which are given competences under the Fiscal Treaty. The wording mirrors the wording used – uncontroversially, as far as I am aware – for the original authorisation for Ireland to join the then Communities in 1973. Such bodies have no greater powers than are conferred on them by treaty.

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