Pollwatch: Sunday Business Post/RED C May 14th

Yesterday’s Sunday Business Post had a poll on Party Support and the upcoming treaty referendum. For the referendum the Yes side has much to be comforted by. The results are:

  • Yes: 53% (+6)
  • No: 31% (-4)
  • Don’t Know: 16% (-2)

When you exclude the Don’t Know yes side lead 63% to 37%. This shows the strength of the Yes side before the entry of Declan Ganley to the debate so it will be interesting to see if his contribution makes any difference.

In terms of party support the only major statistical movement is drop below 30%. The party support is as follows:

  • Fine Gael 29% (-3)
  • Labour 13% (-1)
  • Sinn Fein 21% (+1)
  • Fianna Fail 19% (+2)
  • Others 18% (nc)

Fianna Fail, who have been in the news a lot lately thanks to Eamonn O Cuiv, seems to have gotten a bit of a bounce from that. Sinn Fein remains the second most popular party in Ireland, but I still believe transfers will still be hard to come by for them.

The Government Parties have seen a drop in support which is probably due to the treaty campaign as much criticism has been laid at how the country is being run.

But over all, the movement is all within the margin of error, but trends are starting to set in.

Why I am Voting Yes – For Stability

A number of people have asked me why I am voting yes in the upcoming referendum on the Stability Treaty (Fiscal Compact, whatever you want to call it!), so I have decided to do a series of posts on why I am voting Yes. Here is the first part of the series.

One of the main reasons I am voting yes to the 30th Amendment to the Constitution on May 31st is to ensure Ireland has stability in the future. If we do not have access to the European Stability Mechanism (ESM) we put this at risk, in my view.

We are going through a tough time as a country at the moment, with the Troika (IMF, ECB and the EC) here telling us we have to cut spending and raising taxes to meet certain targets. We need to hit these to enable us to return to the markets.

If we do not accept this treaty we will not have access to the ESM, which will have more money available to us then the IMF.

While we will still have access to the IMF, we will not get the same level of funding as we did last time. It could mean a tougher time for us as citizens. UCD Economist Karl Whelan recently explained this on Morning Ireland

Ireland could apply to the IMF for funds. However, people need to  understand that the IMF has its procedures in which is assesses how much money it’s willing to lend to a country. How much money they’re normally willing to lend a country, depends upon what’s called the size of a country’s IMF Quota. They normally will lend maybe three, four, five times a country’s Quota. They’ve already loaned Ireland, fifteen times our Quota. So that is well beyond their normal behaviour. Now why did they do that? They explained why they did that. They said that because Ireland has this additional support from Europe, they think that they’re not in as much, in as risky a situation. So we are now talking about, in addition to those loans that we already have from the IMF, will they give us far more than that, because now instead of being one third of the current bailout, they would have to be all of what’s afterwards. Most likely in that situation, what the IMF would do is deem Ireland’s debt situation to be unsustainable. The only way I think that they would be willing to lend to us, is if they say oh yeah, these guys are not going to be able to pay back all their debts. So you will see the existing debts, the sovereign bonds that we’ve issued to private investors, will at that point most likely be restructured. At that point they may be willing to think about, after a default, and we are shut out of financial markets for a number of years, they may be willing to give us a small amount of money.

So that means we have the possibility of a default if we do not vote Yes. Also possibility of a default means that we have a chance of having more austerity then less. As Karl Whelan again pointed out on Morning Ireland,

I think a most likely outcome of a No Vote that isn’t in any way reversed, and we just say we don’t want to borrow from the ESM, the most likely outcome from that is a large scale sovereign default, followed by possibly a small IMF Programme that would see the country have to run a zero budget deficit very very quickly. In other words, far more Austerity. So people who think they’re Voting No because they don’t like the Austerity, need to understand that it is more than likely that a No Vote would being us more Austerity in the near term than a Yes Vote.

So to avoid this scenario and to provide stability to the Irish Economy in Future, I am voting Yes on May 31st.

Fiscal Treaty will NOT lead to permanent Austerity

austerity
austerity (Photo credit: 401K)

One of the mains arguments being used by the No side to the Fiscal Compact Referendum is that this treaty will lead to permanent austerity.

A senior IMF official has said that adopting the fiscal treaty does not mean permanent austerity, the complete opposite!

Speaking after an event in Brussels, IMF deputy divisional chief Xavier Debrun told reporters that once a government had a more balanced budget situation then belt-tightening was no longer necessary.

Mr Debrun said the treaty simply meant that governments adhered to “common sense” housekeeping rules.

He said Ireland passing the fiscal treaty would improve the country’s chances of returning to the international markets to borrow.

Mr Debrun said: “Fiscal rules are about fiscal responsibility, the fact that over the long-term governments make sure that on average they can pay for the policy measures they implement. This is just common sense.

“This is called the budget constraint: you are subjected to it, I am subjected to it, the government is subjected to it.”

Mr Debrun said austerity was caused by governments ignoring the budget constraint and then being faced with fiscal shocks which required belt-tightening.

He said: “The belt-tightening is the austerity, but you do not have to tighten your belt forever, obviously.”

This is what the Yes Campaign has to get across. The Fiscal Compact is formalising rules we have been subject to since the Masstricht Treaty, the Growth and Stability Pact, the Six Pact and now the Fiscal Compact. If those treaties and pacts were about permanent austerity, why did we not have it since 1992?

Its time we got real with our finances and learned to live within our budget, just like every other household, business and country.