Investment, Stability, Recovery.

The human has been extremely busy at work this week (he’s an accountant – that rather dismal profession) so my access to the internet has been sporadic. Tonight, however, as he was trying to use his laptop I insisted on rubbing my face against his arm and lying on the keyboard until he gave the machine up with an air of hopeless resignation.

And hopeless resignation may well be what many of us feel when we consider the upcoming treaty vote. Even if you do overturn it, will they make you vote again, like they did with Lisbon II ? (I say “you” because my human won’t be voting – as a British citizen resident in Ireland he can vote in everything except referendums). In recent days the posters have gone up. The “yes” side, always the better funded it seems, have got in first, and almost all of them contain at least one of the three words in the title of this post. Voting yes, it seems, goes hand in hand with these virtues. The Labour party have one that urges you to vote yes for a “working Ireland”. My question is: Working for whom? At present we seem to be working to pay back a vast amount of private debt that was nationalised. We are working for the creditors of defunct banks, without even the solace of recoverable assets. We are being lectured on capitalism by people who have turned the free market on its head by rewarding reckless lending.

The Yes camp knows that it’s hard to argue with things like investment, stability and recovery. There’s a reason why investment is the first word on Fine Gael’s pretty green posters. Investment is the backbone of any economy. No matter what type of economy you are going for, you need somebody or something to invest. Whether it’s the government, individuals or corporations, without investment you have no economy. The Yes side is pitching this as a yes or no vote on investment. Today I heard on the radio that the Taoiseach (that’s the Irish word for the prime minister and it’s pronounced tee-shock) Enda Kenny said that the “messages he’s getting from boardrooms across the globe” is that a yes vote is essential for the expansion plans of the multinationals. No specific boardroom was named, and no spokesperson from any multinational was called on to give voice to this claim. I’m not sure how exactly these messages are being delivered; perhaps a carrier pigeon dropped a note in to the Oireachtas from the CEO of E-Bay telling Enda we’d better all vote yes or Paypal won’t open in their new call centre in Dundalk after all. But I very much doubt it. Corporations want what they’ve always wanted. Low costs, low taxes, political stability and a relatively cheap, but skilled, workforce. It’s Enda’s interpretation that voting yes to the fiscal compact is the way to achieve this.

Let’s look at the economics of this. Recessions are partly caused by people saving their money instead of spending it. Savings are anathema to investment. But the prevailing mantra from the EU is one of austerity, encouraging people to save. So how is the economy to recover? The government could step in to invest (consider how much worse this recession could be if the government had not spent like a drunken sailor the past few years), but they have no money; it’s all being used to pay these bondholders, to “pay our way” in Europe. Money is flowing out of the country under these conditions, not into it. This is compounded by the problem of emigration; the nation is losing its future resources. So if you were a corporation with money to invest in Europe, would you choose a) a country everyone else is trying to get out of, tied in to an expensive currency, with those who are left being squeezed to the extent that political instability looms large on the horizon, or b) a country that defaulted on debt that wasn’t really its responsibility in the first place, thereby clearing its balance sheet and starting afresh, with a currency that it can manipulate to make inward investment even more attractive?

The “No” side has not yet really come into voice yet. When they do, my great fear is that the simple message outlined above will be distorted by hysterical anti-capitalist rants. That this treaty is part of some nebulous bogeyman’s agenda. It’s not. It’s just the Germans doing what Germans do, efficiently pursuing a bad idea, as the rest of the world tries to move on.

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One thought on “Investment, Stability, Recovery.

  1. Pingback: I get an email from Fine Gael | Penny Wise

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