Campaign Against the Austerity Treaty

Vote No to the Fiscal Compact Treaty, Referendum in Ireland, May 31 2012

Challenge “A Travesty of Justice”

with one comment

Answering the Question ““is this travesty of justice just going to go unchallenged?”

We will challenge it!

Tomás Ó Flatharta

The paper below on the Fiscal Compact (Austerity) Treaty, dated 12th April, was prepared for the Irish Congress of Trade Unions executive by General Secretary David Begg following the ICTU executive committee meeting of 9th March.

It seems that the blackmail clause is necessary for David Begg too. In a paper which is 80% a useful demolition of the Treaty from a social democratic point of view, an excuse that the wording does not really copper fasten austerity and, especially, the projected inaccessibility of the European Stability Mechanism (ESM) for a second bail out following a rejection, leads to the conclusion, encapsulated in the final sentence:

“While the treaty is wrong from our economic and social perspective it becomes hard to oppose it unless a satisfactory alternative to the ESM can be advanced.”

It appears that his will be the leading proposal to go before the relevant ICTU executive meeting for…

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  1. ‘Ah, but where will we get the money if we don’t vote YES?’ – a reply to David Begg’s last paragraph

    1. Even if we don’t ratify the EU Permanent Austerity Treaty on May 31st and we can’t access the ESM, we are small but important for the EU financial system and so funds will be found elsewhere outside the ESM structures to lend to us. This would certainly be the case if such assistance was in the words of the ESM; indispensable to safeguard the financial stability of the euro area as a whole. Remember ‘contagion!’

    2. If the EU doesn’t come up with the money, we are entitled to apply to the IMF and their interest rates and conditions were more favourable than those of the EU/ECB! This is the same back-stop that all EU countries are entitled to as members of the IMF. After all, more EU countries have accessed IMF support than EU support in the last decade: Latvia, Lithuania, Poland, Bulgaria, Romania, Hungary, and Estonia.

    3. Sweden and Britain both advanced loans at a favourable rate to supplement our first bail-out. Norway has a pension reserve fund of over €500bn and might be similarly inclined. When Argentina defaulted, it was kept afloat by a number of countries until it re-entered the markets.

    4. In the unlikely event that we get no loans and have to close the deficit we can do so through instituting a progressive taxation system, including a wealth tax – we have over 20,000 declared millionaires – to fund social services.

    5. The remaining money can be found through renegotiating (partially defaulting on) foreign debt. This would take courage and resolve but would ultimately be successful. The debt will have to be renegotiated a few years hence anyway.

    6. Regardless of the Treaty vote, Ireland is guaranteed funding under the current programme as long as it meets its targets. Michael Noonan, said recently, “There is a commitment that if countries continue to fulfil the conditions of their programme the European authorities will continue to supply them with money even when the programme is concluded . . . The commitment is now written in that if we are not back in the markets the European authorities will give us money until we get back in the markets”.

    Frank Keoghan

    April 18, 2012 at 6:50 pm


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