]I get the feeling you're entirely missing the point, even from the thread ***le. It's called the fiscal stability treaty, not the austerity referendum.[/B] This isn't a vote on austerity, no matter how much the no campaign would like it to be.
In a nutshell, when Ireland signed up to the Maastrict treaty (the one that essentially put in place all the ground work for the single currency), we in effect made a gentleman's agreement to keep annual government deficit below 3% of our GDP (60% in total). What the fiscal stability treaty do is make that a legal requirement that we must meet by 2015. In a sense, it's strengthening a rule that we already signed up for 22 years ago.
The treaty also introduces restrictions on the amount of structural debt a country may carry, limiting it to between 0.5-1% per year. If a country fails to abide by this, it must work with the EC toward correcting it's deficit.
The key point is that all of this is that these rules will enter law should a member country sign up to the treaty. These rules will therefore have to be kept. For the treaty to come into action, 12 of the 17 member states must ratify it. This will happen regardless of whether we vote yes, but if we don't it will not apply to us.
So what's to gain by voting yes?
The treaty also lays down provision for the European Stability Mechanism, the EU financial assistance body. Should we vote no, we will not have access to funds from the ESM in future, meaning that should we ever need financial assistance , our only port of call will be the IMF, who will give us less money at a far higher interest rate. This is why the yes side can legitimately call a yes vote a vote for financial stability. Ireland ratifying the treaty would do two things:
i) Give us access to cheaper credit should we need it in the future
ii) Convince the markets that we're heading in the right direction economically.
On the second point, economics is as much about psychology as it is about actual finance. If at looks like we are trying to keep our financial matters in order, people we be more confident in us, the Euro will be strengthened and our recovery will proceed quicker. The opposite is true if we vote no imo.
The no side currently is working off the slogan 'austerity isn't working.' Well, what's the alternative? We can, as so many people on the street seem to want, tell the IMF and ECB to shove off, stop paying back our debt and be out of money be christmas. We could vote no, but then all of a sudden market confidence in the country would drop significantly and the odds of us needing a second bailout (to which we'd have to go to the IMF for) would be higher. We're too small a country to buy our way out of the economic slump, so trying to control our debt and get our financial affairs in order is the only way to go. TBH if we want to be running smoothly economically, we should be within the constraints set out by the treaty regardless of whether we were to sign up.
The only credible no argument idea I've heard is that because of the recent presidential election in France the political landscape of Europe is a bit uncertain at the moment and that we shouldn't tie ourselves into anything. But to that I'd say the treaty will be ratified regardless of what we do. We won't get a second chance at this because they don't need us. Ideally the election would be pushed back a bit, but as it isn't I'd rather err on the side of caution that take a chance on the possibility that Europe takes a U-turn.
