Kenny and senior Labour figures back Noonan

Thu, May 3, 2012, 01:00

TAOISEACH ENDA Kenny and senior Labour Party figures have backed the warning from Minister for Finance Michael Noonan about the dangers of rejecting the fiscal treaty.

Mr Kenny said that Ireland’s exclusion from the European Stability Mechanism (ESM) would mean the country would have to deal with its deficit in an accelerated fashion. He said the ESM was an insurance for continued investor confidence in the country.

“The Minister for Finance has set that out very clearly indeed. He doesn’t want a situation whereby if you didn’t have access to the ESM and you weren’t able to get back into the markets, that you’d have to deal with your deficit in an accelerated fashion.”

Mr Kenny was speaking in Dublin at the launch of a new facility on his party’s Facebook page whereby Ministers, TDs and Senators will answer voters’ questions on the treaty in video responses.

Tánaiste Eamon Gilmore said the referendum would have profound implications for the Irish people. Speaking at the Institute for International and European Affairs in Dublin, he said stability was a necessary condition for growth, not an alternative to it.

“You cannot have growth without stability, and ultimately, you will not have stability without growth. Ratifying the treaty is necessary to continue our path to recovery,” he said.

Minister for Communications Pat Rabbitte defended Michael Noonan’s comments about the impact of a No vote on next year’s budget. He also accused the No side of “playing with semantics” over whether Ireland could apply to the IMF for further funding in the event of a No vote.

Mr Noonan in Brussels attacked Sinn Féin’s campaign against the treaty, saying the party was propagating “fiction” to suggest a No vote would provide a free pass to Ireland on budget matters.

The Minister also said he would come under pressure from the “external authorities” to accelerate austerity policies in the next budget if there was a No vote.

“There’s a fiction that has been propagated, particularly by Sinn Féin, that a Yes vote is a vote for austerity and a No vote is some kind of a free pass,” said Mr Noonan. He rejected claims that he was threatening the people and said he was merely pointing out the factual position.

“This idea that you can’t have a debate because it upsets Sinn Féin? Now Sinn Féin might be afraid of the truth on a number of issues but the Irish people aren’t afraid of the truth,” he told reporters.

“I simply want to point out that the pretence that a Yes vote is a vote for austerity and that a No vote is a vote for a soft option is simply not true. As a matter of fact, for next year’s budget and the one after, the contrary is the true position.”

He said a No vote would create a lack of confidence in the economy and that would have an effect on investment decisions, both external and internal, and would oblige him to reduce his forecast for economic growth next year.

“On next year’s profiles we’re looking at 2.2 per cent of growth in GDP. The uncertainty caused by a No vote will cause that to come down and consequently that would make my job more difficult in planning the next budget,” he said.

“If there is no assured source of funding after 2013 and there won’t be because of the linkage of the European Stability Mechanism Treaty with the treaty that’s up for decision on the 31st, there’ll be a lot of advice that the prudent thing would be to speed up the progress of adjustment,” said Mr Noonan.