Honohan backs fiscal treaty

Governor of the Central Bank Patrick Honohan has this evening endorsed the fiscal treaty, insisting it is the safer alternative for Ireland.

In a speech made to delegates at the Irish Economics Association annual meeting, he said the fiscal compact introduced a tighter set of rules on future policy.

"The scope for operational flexibility helps reassure me that signing up to the Treaty has been the safer alternative for Ireland. For the Government to have done otherwise would have been to turn our back on a framework of European cooperation at the heart of what has been – despite the recent reversals – Ireland's very considerable economic progress over the past four decades," said Mr Honohan.

"Above all, as has been remarked across the political spectrum in Europe in recent days, that cooperation must emphasise a growth and employment focus which, if successful, could have the effect of dissolving debt and deficit problems faster than anything else," he added.

Former taoiseach John Bruton also offered his support for the treaty in a speech made at the Irish Stock Exchange this evening.

Mr Bruton said refusing to ratify the European treaty would have an adverse effect on Ireland because foreign investors would lose confidence if it was cast adrift from Europe.

"To use the analogy of a household, advocates of a No vote are asking us as a household to take our custom away from the credit union, of which we are a long-standing member and which is helping us through a bad patch, and to place our fate in the hands of the moneylenders and loan sharks," said Mr Bruton.

The treaty, which will be voted upon on May 31st, obliges member states to keep budget deficits and public debts within tight limits.

Earlier today, the country's second biggest trade union Impact, which represents 63,000 public servants, has urged its members to vote Yes in the forthcoming referendum on the treaty.

Impact general secretary Shay Cody said a No vote would likely result in a significant increase in the cost of State borrowing and leave the country "at the mercy" of global financial markets.

Mr Cody said a No vote would have "dramatic consequences for social welfare benefits, pensions, public services including pay and employment, and domestic demand in the wider economy."

“Voting No would be like telling a bank manager that we didn’t want a guaranteed low interest loan, and would instead take our chances with the money lenders in 2014," said Mr Cody.

"This is not a sensible course of action for anyone directly reliant on public funding – pensioners, carers, unemployed, public servants and community workers - or others who work in the domestic private Irish economy and would be indirectly affected by such a decision."

Three unions, Unite, Mandate and the TEEU have already urged members to reject the treaty while the Irish Congress of Trade Unions yesterday said it had not been possible to reach a unanimous or even a majority position on its executive council on the treaty.

The union representing lower-paid civil servants, the CPSU, will debate a motion at its annual conference tomorrow calling for a No vote.