'Yes' to treaty is crucial to secure funds and growth


OPINION:THE BIGGEST problem with Irish referendums is that they tend to descend into the two sides confusing rather than informing the public.

With three weeks to go this is in danger of happening again.

A critical mistake of pro-EU parties is to allow rebuttals to dominate their own efforts.

There is one thing we should be very clear about now and that is the need to make the positive case for a Yes vote. The fiscal stability treaty will not pass if all the people hear is two sides exchanging attacks.

The crass distortions and inventions of the No campaigns must be challenged, but there is a duty to put a strong and compelling positive case for a Yes vote.

Over the last 12 months my party has taken a leading role in pushing for the EU to react more aggressively to the biggest economic crisis in its history. We have done this because of a simple and incontestable fact: for Ireland to recover we need Europe’s support.

Ireland needs help in financing public services over the next few years – but we also need a return to growth in order to protect and build upon the hundreds of thousands of Irish jobs that depend on trade.

The European Union’s response to the crisis has been slow and halting. We have been pushing for a much wider and assertive set of actions by the union. What can be said is that significant steps forward have begun and this treaty enables one of them.

On May 31st the people will decide on the ratification of a short but important agreement between all of the euro currency members and eight other countries.

The stability treaty is not the answer to all of Ireland’s problems, but it is an important part of the answer. It is a reasonable response to what is now almost a Europe-wide crisis for states seeking money to fund public services.

This treaty should be supported for two key reasons. Voting Yes will ensure that Ireland has access to the cheapest and most secure funding for our public services – and it is an essential part of the agenda to restore growth and job creation to Ireland and Europe.

In two years’ time Ireland will need to raise at least €18 billion from somewhere. I want Ireland to be able to borrow that money at affordable rates on the open market. If that’s not possible I want Ireland to have a secure alternative that it can afford. Both of these conditions require both proper budget controls and access to the European Stability Mechanism (ESM).

If investors know that Ireland has solid budget controls in place and has the back-up of ESM funding, their willingness to lend to Ireland will increase and the interest rate we pay will reduce. The ESM itself as a final option represents the cheapest possible borrowing for Ireland.

Any alternative funding would lead to billions in extra interest payments, meaning more taxes and less spending. To be fair, some No parties are being honest in admitting that they would impose billions in immediate new “wealth taxes” well beyond anything planned. Because it means cheaper and more secure funding, a Yes is clearly the vote for the least austerity.

Obviously the public is likely to be confused by two sides claiming that a vote for them is a vote for less austerity. The only way to address this is for each group to immediately publish details of what they say the situation would be if they win this referendum.

If parties are operating in good faith they should be able to quickly show how much they are proposing Ireland should borrow in the next five years, where they would get it and how much it would cost.

This would quickly put an end to the nonsense of €6 billion cuts in 2015 coming from a Yes vote.

My party also supports the treaty as part of the broader growth agenda. Under every conceivable scenario, strengthened fiscal controls are part of restoring confidence and growth to Europe. They cannot and will not deliver growth by themselves, but they will help rebuild confidence and provide the foundation for further moves.

There is a building and I believe irresistible momentum towards a new growth agenda in Europe. François Hollande’s election has given it even further impetus. Ireland must be more active in supporting this agenda. The stability treaty is a strong statement of good faith that countries understand the balance between pushing for growth and sustainable budgets.

Two years ago the ESM itself was unthinkable; now it is to be incorporated in the fundamental law of the union. A further move on investing in growth and job creation will happen and a Yes vote brings this reality significantly closer.

One thing that this referendum has nothing whatsoever to do with is daily politics. It’s about the future of our country, not about support for any party.

This Government is making many serious mistakes in its economic policies. In its two budgets announced last year, the Government hurt employment and was deeply unfair. Their implementation of their policies is becoming increasingly incompetent.

We also believe that it has been too timid in its approach to European negotiations and has waited too long before supporting badly needed growth measures.

I repeatedly urged the Taoiseach not to rush the referendum by holding it in May because of the likely uncertainty about the situation in other countries.

We are on the same side of this referendum but nothing in this is in any way an endorsement of Government policies or its approach to the referendum.

If there is a No vote the Government will not fall, but it is the people of Ireland who will suffer from damaged international confidence and having to seek less secure and more costly funding for vital public services.

On the other hand, a Yes vote provides for a safer, more certain pathway out of the crisis.

Micheál Martin is leader of Fianna Fáil

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