The following are a few notes on the upcoming referendum from a frustrated expat who shall be unable to vote due to the lack of provision for overseas citizens. To add insult to injury, it appears I shall be unable to register for Belgian elections, despite Belgium having manifold levels of government and despite still being expected to pay for this extravagance via my taxes. I am still waiting for confirmation on this. I digress.
The Irish republic will vote on the new stability agreement at the end of next month. A tumultuous and hard campaign is imminent.
All commentary on the treaty must occur in context. This treaty does NOT provide a new set of rules; it merely provides a means of enforcing rules that were agreed and ratified by the nations of Europe in the Maastricht treaty (TEU) over 20 years ago.
Where these rules have been strictly adhered to (Denmark, Estonia, Finland, Sweden and Luxembourg have consistently stayed within the parameters) unemployment remains low and growth is steady. In short, the rules work.
Many on the hard left say that this treaty outlaws expansionist Keynesian economics through stringent borrowing controls. This overlooks in a broad stroke of breath taking general ignorance the fact that a sovereign state might be able to earn its own capital as opposed to perpetually borrowing and deferring payment until a later date. There is plenty of room for Keynesianism if one can pay for it. Running amok with the national credit card is no longer an option. One need only look at what happened when Fianna Fail won the 1977 General election with a manifesto dripping with fiscal lunacy to see the folly of such policies. The national debt sky-rocketed and in the following decade unemployment hit 20% as the economy faltered.
In a perfect world, all governments would spend counter cyclically. That is to say they would save money when times are good and spend it when times are bad. Had the Irish state saved a couple of hundred million in the recent boom and spent it on the construction industry this year think how many people they could employ. Furthermore, given the fall in labour costs in this sector, think how much further this money would go.
Put simply, as any good home maker knows, it is always preferable to save for something then it is to buy on credit.
The hard left, it would seem, can see no way of growing a state’s economy other than borrowing. 20th century history shows where this extensive sovereign borrowing leads.
My former colleague, Brendan Halligan makes the very valid point that there shall be fiscal austerity in Ireland either way. Voting yes may not seem palatable in light of the above; it will allow smoother access to future bailouts and send a signal to the broader world that the republic still has a stable relationship with Brussels.
I dread what I fear may be an onslaught of jingoism and “them v us” rhetoric in this campaign. For reasons like the one I have outlined above I believe we should ratify this treaty. When I say “we” I of course mean we the people of Europe must put our shoulder to the wheel and protect our common currency.
I will end on a note of consensus. Unlike previous European agreements voted upon, this will be distributed to the populace in printed form, for free, and long in advance of the vote. It is essential that anyone wishing to make an informed decision read it in full.