Sign in. It’s quick, free and it’s up to you.
An account is an optional way to support the work we do. Find out more.
YESTERDAY AFTERNOON, Taoiseach Enda Kenny announced that Ireland would hold a referendum on the recently-agreed European Fiscal Compact Treaty.
Addressing the Dáil, Kenny said that he believes it is “very much in Ireland’s national interest” that the treaty is approved, but its critics say it could lock the government into more years of austerity budgets.
So, what is that treaty – and why are we voting on it?
What are we voting on?
Twenty-five of the 27 EU members have agreed a new treaty which proposes to tighten fiscal discipline among member states. The terms of the treaty were negotiated and designed in a bid to prevent another debt crisis.
The Fiscal Compact Treaty includes what has been termed a ‘debt brake’. This legally-binding limit would cap each member’s budget deficit in relation to the size of their economy (ie below 3 per cent of GDP). Governments also have to ensure that public debt don’t exceed – or is sufficiently declining towards – 60 per cent of GDP.
Member states who breach the debt limits can be financially penalised. This penalty cannot exceed 0.1 per cent of that state’s GDP.
All 17 members of the eurozone have agreed to sign up to the agreement. (Of the EU’s 27 members, only the UK and the Czech Republic have declined to sign.)
The Taoiseach has previously said that Ireland’s receipt of bailout funds are not dependent on any such referendum being passed because the state is already in a fiscal programme for which the relevant arrangements and agreements are already in place. These agreements supersede the new fiscal compact, he said.
However, the treaty would give Ireland access to future emergency funds from the European Stability Mechanism, which is being limited to participants of the fiscal compact treaty. The €500 billion permanent bailout mechanism is planned as a replacement for the current European Financial Stability Fund (EFSF) and is expected to be introduced later this year.
Why are we holding a referendum?
Under Article 46 of the Irish Constitution, any change to the Constitution requires a referendum being put to the people. The Attorney General must determine whether any proposed amendments are significant enough that they require a referendum for approval before being introduced into the Constitution.
The new treaty’s text appeared to allow for members to adopt the treaty without it being incorporated into their constitutions. In Ireland, it falls to the Attorney General to advise the government on a whether a treaty’s ratification requires a referendum because of the above Constitutional clause.
AG Marie Whelan has advised the government that it is best for Ireland to hold a referendum before ratifying the Fiscal Compact Treaty. On foot of that advice, the Taoiseach and Tánaiste announced yesterday that a referendum would be held on the issue, and that the treaty will be debated over the coming weeks.
No date has yet been set for the treaty referendum.
Speaking on RTÉ’s Drivetime yesterday, Minister for Justice Alan Shatter said that this was an important referendum and it is not a case of getting it out of the way quickly. He added the cabinet had not yet discussed a timeframe for the vote.
The Referendum Commission is an independent body which explains the subject matter of referendum proposals ahead of the vote. Under the Referendum Act 1998, the Minister for the Environment will appoint a Referendum Commission to inform the public ahead of the Fiscal Compact Treaty referendum.
What are the arguments for and against?
For
In the weeks between the Fiscal Treaty agreement and the Attorney General’s advice that Ireland should hold a referendum on the issue, a number of arguments have been put forward by politicians and organisations in favour of either a yes or a no vote.
In his Dáil address yesterday, the Taoiseach said that a ‘yes’ vote in the referendum on the fiscal compact treaty would “build on the steady progress the country has made in the past year” and encourage investor confidence in Ireland.
“Putting in place this credible commitment to responsible budgeting will be key to keeping interest rates low and unlocking credit availability for investment and job creation,” Kenny said. “Lower interest rates also mean more resources for the provision essential public services.”
Meanwhile, Tánaiste Eamon Gilmore said that “what this will come down to is a vote for economic stability and economic recovery”. He also said that a ‘yes’ vote would support international confidence in the Irish economy and promote the state’s fiscal recovery.
Opposition parties have welcomed the referendum, but were divided on whether the treaty is the right move for Ireland.
Fianna Fáil’s Micheal Martin said that his party supports the treaty, but warned that it would not pass unless people were being engaged in the issues involved. “The people need to be taken on our journey through the EU,” he said.
Against
Sinn Féin has warned that the treaty could lead to further austerity measures being introduced as the government pushes to meet its debt limit under the treaty. Gerry Adams TD said yesterday that the treaty will not help to regenerate the economy but will instead “condemn the people, particularly those in lower- and middle-income brackets, to this government’s terrible austerity policy.”
Late last month, the Fiscal Advisory Council recommended against introducing the measures proposed under the treaty into the Irish Constitution, warning that they would not have the necessary flexibility if enshrined in the Constitution.
The council – established last year to offer independent analysis on whether the government is meeting budget targets or not – said that methods of enforcing the proposed fiscal limits could be strengthened while allowing for democratic control by introducing the measures in national legislation, rather than in the Constitution.
To embed this post, copy the code below on your site
And if we vote no, how long will it be until they re-run the referendum a second time so people vote the way the government want them to. Democracy my arse.
if 80% or more of the people turn out first time then a second vote would not happen as a clear majority have spoken but if less than 60% turn out well then there is an argument that a majority has not been heard its up to the people to ensure they come out and even if there is a second ballot you don’t have to change your mind
last I heard 60% was a majority
Yes, but that’s just voters turned out. If the majority of that 60% vote one way or another it may only be representative of, say, 40% of the population. (just pulled that number outta nowhere, mind!)
To be honest I had hoped for a more thourogh analysis given the headline. This is just a collection of soundbites for and against.
Agreed, quoting politicians in the for or against part was disappointing.
Agreed. Pointing to incompetent politicians for interpretation of a really important treaty is quite ridiculous.
Plenty of economists (see project-syndicate.org) have weighed in on the debate since the compact was devised. Incidentally, almost ALL reject the treaty, on both political and economic grounds.
The crying shame is that many (if not the majority) will form their opinion based on the Irish Times (Stephen Collins mostly), and Fine Gael/Fianna Fáil. Sinn Féin and the far left’s opposition to the treaty will only confirm their allegiances. The nail in the coffin will be if any of the multinationals get involved.
This treaty will promise the earth moon and stars.
It will seriously erode our sovereignty and condemn this country to at least 20 more years of austerity measures.
But, wait till we see the same old posters saying Yes to Jobs!
They might as well tell us that the treaty will give us hot sunny summers, white Christmases and endless rainbows with the obligatory pots of gold.
That’s comment of the week right there Gerard!
The treaty has no effect on Irish sovereignty. The serious erosion of sovereignty took place courtesy of Fianna Fail when the country went cap in hand to the IMF & EU.
Des, it’s another serious step down the road towards handing over decisions on spending to Europe.
And just so you know, we mean nothing to Europe, they simply want as much money back out of this country as possible.
Socialize private debt? Tick.
Take state assets? Tick.
Take the pension reserve fund? Tick.
Cut min. wage? Tick.
Force in property tax? Tick.
Des, FF did not go cap in hand, they were forced to take it. Surely someone who is involved in politics should know the basic facts?
I didn’t know you were an apologist for Fianna Failure, Gerard. We all remember exactly what happened to bring us to the sorry state where we are now. We all know who was directly responsible for this … Fianna Fail. Their corruption, profligacy, asleep-at-the-wheel approach to regulation and tax policy and basic incompetence lies at the heart of this country’s penury.
I’m no apologist for FF Des, far from it. In times gone by the ffu##ers would have pitchforked, and proper order too.
I believe in democracy Des, you know, like when the public has voted, the government accepts it.
Where do you stand Des?
Did you campaign for a rerun for Lisbon for example?
I’m not party affiliated, what are you Des?
Gerard how does this treaty “erode our sovereignty”?
How are we condemned to 20 more years of austerity?
So as Ireland’s debt to GDP exceeds the threshold we will be liable for a fine of 0.1% of our GDP per year till its within limits. It’s a no brainier which way to vote!
Sorry to shoehorn in here but what happens if we vote no, do we stay in the euro or are we out? Probably really obvious question but havent seen it mentiined anywhere.
THE TREATY EXPLAINED IN FULL,, A MUST READ,, NO ALL THE WAY http://sacredbull.wordpress.com/2012/02/29/is-the-esm-treaty-the-most-outrageous-treaty-ever-drafted/
Sorry to burst your bubble but it doesn’t apply to us while we’re in the Troika program.
Thanks joe for that link, it does explain the reasons to vote no very clearly. But does anyone know what happens if we vote no, are we out of the ez or can we continue to use it but not be part of the agreement?
Still in the euro Niamh. No vote has no bearing on that
Thanks rommel, it will be a no from me so.
So is that a “No I wont be reading the treaty and I a coming to an uninformed opinion ” Niamh? Or a “No I wont be voting for the treaty because after serious consideration of the issue I have come to the conclusion that this is wrong for the Irish People”
Now felix….of course ive read the treaty and every news piece in reuters, derek spiegel, the telegraph and the gaurdian, ive even read one in thr christian scientist, have you felix? Not that its any of my concern because it is ur vote and you can did with it what you like…..dont want to come over all sanctimonious or patronising or anything.
I havent read any of it as yet Niamh. You may be certain that I will before deciding which way to vote however.
I do know though you have read none of it considering youve asked such a daft question as whether we remain in the Euro.
That leaves the situtaion thus: You know none of the details of the treaty, none of the issues arising from it. You understand neither how it will be implemented nor its ultimate goals. You have no notion of the role played by the Irish government in helping to draft it. You havent the first idea what its consequences may be and the real killer is YOU DONT EVEN CARE.
You have decided out of pure blind ignorance to vote no on something you do not understand.
Why? Because of the property tax, or some vague notion that German banks are behind it all….
Incredible stuff. Ladies & Gentleman I present you with the REAL reason Irealnd is in such a dreadul state: Niamh Byrne. People making deicisons which affect us all with absolutely no understanding of those issues.
Felix wot is ur problem? I asked a question that although you may think is stupid (god help use if you are a teacher) it was in fact clarity I was looking for as it says nothing about it in the treaty. There is absolutely no need for you to be so rude and derogatory. You are not the great god almighty who gets to decide on the intellectual or otherwise of people. you obviously have a chip on ur shoulder. get some perspective on life.
What is my problem Niamh?
Ill tell you. It should be obvious from my comments but Ill explain it to you anyway.
You asked a question which, although perhaps not stupid in its own right, does show how truly truly uninformed you are on the subject matter.
Its the equivalent of a Leaving Certificate student preparing to sit honours Maths and putting up their hand and asking “What is addition?”. The question itself is not stupid. But it does show how very very far we have to go before the student is ready for the exam.
Once explained it to you that we wouldnt leave the Euro you suddenly decide “Right then Im voting NO!”
To return to our exam student analogy its the equivalent of the student realising how addition works and suddenly declaring that their about to start teaching their fellow students advanced trigonometry.
THAT is my problem. You are declaring yourself to have a position you are grossely unfit to adopt. The very breadth of your ignorance on the topic, the very fact that you needed to ask that question should warn you that you need to inform youself what youre actually voting on….But no. Thats too much to expect.
My PERSPECTIVE is that people should inform themselves before voting on incredibly serious issues that affect the entire country.
Felix….although you may have read my answer as glib believe me I do not take this matter lightly, I have read every blog/article/column on this, I have even informed myself to the extent that I read the treaty. You may think you know me random stranger off the internet but just because you can hide ur identity behind ur key board does not mean you can hide ur smug arrogant manner. I do not have to justify myself to you or anyone else for that matter…as much as you would like to dictate to people how they should vote unfortunately for you each person can vote in whatever way they choose. As I said I dont have to justify why I will vote in a certain way as you are an arrogant argumentative random stanger on the internet. Bye bye nasty random person. And dont forget VOTE NO. xxx
@Niamh: He’s no more hiding behind his keyboard than you are. Despite your claims to have eductated yourself on the subject the fact that you don’t know the fundamentals suggests you still have alot to learn before you’re in a position to make any kind of an informed decision. The fact that you’re willing to do so without anywhere near enough research is scary.
We have to think very carefully on how we vote analyse the treaty from top to bottom. The Government will tell us everything is okay but we have to see for ourselves.Its in years to come what will be the consequences of a yes vote. Look what happened to the Lisbon Treaty. Time will tell. PS. We could be caught in a situation where Europe will decide all our future budgets. Then we will really know what austerity is.
The consequences of consitutional reform are always felt years afterward – it was the same with the Judges Pay referendum. But the People ignored that in favour of lashing the Judges (or at least thinking they were lashing the Judges) without a care in the world about the future.
Remind me what happened with the Lisbon Treaty? As I recall the People voted No and then were told that Lisbon would create jobs and our Corporate Tax rate was to be left untouched and decided to vote Yes…Ofc ourse the Lisbon Treaty was never about either of those things at all
How exactly does this treaty suggest that Europe will decide our future budgets – as far as I can see they are only empowered to penalise is for spending beyond our means. Just where do you get this “Europe will decide out future budgets” nonsense from?
As you can see the Germans were discussing our budget before it was announced in the dail. What I am saying is that Europe will want to see what measures the government are taking to address the fiscal situation Ireland currently finds itself in.The treaty might not say that but read the small print or what is not in it. It is what they are not saying is that people will want to know. Why is it that Brussels were taken aback yesterday when the Referenda was announced. They were sure that we would not have one.
What has the Germans commenting on our budget got to do with anything?
Europe have seem, see daily and will see for a very long time the measures we are taking to address our fiscal problem. What has this got to do with anything?
“The treaty might not say that but read the small print…”
If its in the small print then, by definition, the treaty “says it”
“read…what is not in it.”
If its not in it – its not law according to the treaty.
What people will want to know is whether or not their pension will still be paid, whether their septic tank will be paid for, whether they will still have to pay the property tax etc etc etc and so on ad infinitum. In short people will want to know whether their own personal grievances will be made worse or better by this. The Treaty itself is not designed to deal with any of those issue at all. BUT an indirect consequence of a particular vote could have an unintended yet dramatic effect on all those things.
Why did Europe react with surprise? Obviously because they had done their utmost to avoid an Irish referendum.
Again – why is there reaction relevant? I asked how, why and where it will become reality that Europe will decide out budgets as you have suggested. You havent answered. I also asked you the relevance of Lisbon – you didnt answer.
I have just seen that there is a possibility of a mini Budget before years end.Yes I know that people will be want to know what applies to them that is the real issue. Of Course I am aware that people are worried about their future. As regards Lisbon I was making the point that that treaty was voted on twice until Europe got a satisfactory answer . We will be told lots of nice things about this new treaty but what about the negative issues and there will be some.I will finish by saying I have my views you have yours and I respect that.
If there’s a rerun it may well be by Irish demand and not the EU. This fiscal compact only needs to be ratified by twelve governments to function. Unlike previous votes, Europe doesn’t need Ireland to vote Yes in order to proceed. This is an important point that the Journal should spell out clearly.
Good point. Also remember that when we go back looking for EU money in bailout 2, we won’t be getting any unless we sign up.
At the time of the ‘bailout’ euro zone banks held €214 billion in Irish debt. German alone banks held €103 billion of that figure. I’m pretty sure with the ECB lending money to us that figure is now higher. If the EU wants to turn off the money tap should it be required because we voted no that’s their choice. If Ireland defaults and writes off it’s loans from euro zone banks and the ECB it could bring down the €. Not sure the EU/ECB wants that so they would be more likely to provide funding to prevent such a possibility.
So on the one side we have the confidence fairy and on the other advice from a man who sent people out to murder and torture. There is much better analysis available from English-language European sources on this treaty. I can provide links if that would help Journal.ie
“All 17 members of the eurozone have agreed to sign up to the agreement. (Of the EU’s 25 members, only the UK and the Czech Republic have declined to sign.)”
Last time i checked there were 27 countries in the EU.
Oh Dear.
There are 17 Members of the EuroZone – being the single monetary union or countries using the Euro as a currency. The remainder of the countries forming the EU are members of the EU but not of the Eurozone – the most obvious example being the United Kingdom which, though an important member of the EU, retains its national currency – the British Pound.
Its frightening – truly frightening – that people have such strident views on Europe, the various treaties, austerity measure et al yet havent got the first notion what the basics are.
finally a chance to have a say in this mess!
The EU has 27, not 25 members ;-)
Hello…..McFly!
We are stuck between a rock and a hard place, if we vote yes we condemn ourselves to years of austerity and if we vote no likewise either way we are going to suffer. A yes vote will ensure the government and all their cronies will guarantee their wages and sod the rest. We as a country must stand up to EU, ECB and IMF and say enough is enough, no more savage cuts, no more enforced austerity and no more money for greedy Banks & Speculators . We need to take back control of our own finances and decisions and not sit waiting with the begging bowl for scraps from Europe. We need change and an end to party politics that has destroyed this country and economy.
We need the will to embrace change and fend for ourselves otherwise nothing will ever change. The definition of madness is doing the same thing over and over and expect a different result.
We are voting on the deficit of the fiscal treaty reform and that our government should get a loan cut down so that we can stab use growth economy and stability for Ireland, our government needs to ratify and negotiate with eu to cut the bail out down, Rita cahill
have your say