Ibec national executive to discuss strategy for its campaign to back fiscal compact

Mon, Mar 5, 2012, 00:00

THE EMPLOYERS’ group Ibec will discuss its strategy for a pro-fiscal compact campaign when its national executive meets on Wednesday.

Director general Danny McCoy said Ibec was “very firmly in the yes” camp, and would discuss how it would become involved in the referendum campaign during the meeting.

The organisation had been fairly extensively involved in previous referendum campaigns and would be so again in the coming campaign.

He said Ibec was concerned about the creation of uncertainty in the period up to the actual poll, in particular in relation to the international investor community and Irish households.

Two years ago, he said, no one expected that the stabilisation of the economy and a return to significant export growth would have occurred so quickly. Ireland had had a “first-mover” advantage in the crisis.

It would be a “travesty”, he said, if the referendum campaign and the associated “noise” damaged confidence in Ireland’s story.

“We should not generate fear around this.

“The referendum will create uncertainty but it also provides Ireland with an opportunity to make people focus on our story and provide a platform for business.”

Ireland, he said, was still one of the wealthiest places in the European Union, and a good place to do business.

He said Ibec would be putting money into its campaign but also the time of its members, which was just as important.

Mr McCoy, who was formerly Ibec’s chief economist, pointed out that 85 per cent of Irish economic growth had nothing to do with the public finances. For this reason the rules contained in the fiscal compact were not a limit on economic growth in Ireland.

He said the stability aspect of the rules on the public finances was to be welcomed.

He said it was also worth remembering that Ireland was in a club (the euro) and it was in the interests of every member of the club, including Ireland, that all of its members comply with the rules “so that others don’t put us in peril in the future”.

He also took issue with the focus that has been placed by some commentators on the proposed 0.5 per cent structural deficit rule contained in the proposed compact.

He said deficits were made up of an element that was due to the business cycle and an element that was structural.

“A 0.5 per cent rule is not particularly draconian,” he said. “Actually you should be aiming for a structural balance.”