Overheard yesterday near Dublin

No, this is not one of those humorous lists of things Dubliners have been heard to say; if you want that you can go here but please read this post first.

The human works for a multinational, which has a large contract with another, ginormous multinational manufacturer (names of corporations and people won’t be mentioned here for several differing reasons). Said manufacturer, let’s call them XYZ Corp, has a large factory complex outside Dublin, and they are in the process of expanding the plant, to what we expect could be almost double the size. This is already happening, the process is well under way. Through certain sources, the human was told that XYZ has been asked by the government to delay the announcement of the expansion and resulting new jobs until just before the referendum on the EU fiscal compact treaty. 

These jobs have absolutely nothing to do with the treaty, or its outcome. This will happen no matter which way the vote goes. What’s happening here is the government want to project a “doing business” image just before the referendum to show voters that they know what they’re doing, that they can get the job of economic recovery done, as long as we trust them and toe the European line.

And it’s hogwash.

Now please don’t get me wrong; just because I’m against this treaty doesn’t mean I don’t like Fine Gael (the human voted for them in the last election). It doesn’t mean I don’t like some of their economic policies. It doesn’t mean I don’t like Enda Kenny (I actually do) and he was courageous enough to allow this vote to go ahead – he didn’t have to do that as constitutional ratification is not legally required. It doesn’t mean that I don’t think we should try to balance our budget, or keep our corporation tax rate the lowest in Europe. Because this treaty is not about Fine Gael, or Sinn Fein. It’s not about sticking it to the bogeyman. It’s not about the corporation tax rate. It’s not about investment, stability or recovery. It’s not about 99.9% of the things you will be told it’s about over the next few weeks.

It’s about something we won’t be able to do. It’s about this. Please read it, it’s not very long. If you like, skip down to Article 3, on the 5th page down. We will have to agree to the following things, and to write them into law with “provisions of binding force and permanent character.”

  • a surplus, or at least balanced, general budget position.
  • keep the level of government debt to 60% of GDP.

At present our government debt to GDP ratio is 109%. We will have to reduce government debt by around  €100 billion to reach the target. What Europe wants us to do is somehow achieve this through cutting expenditure and raising taxes. We’ll have to do both (and we’re seeing this already) – not just one of these two actions will work. And I don’t think it can be done; we’re going to have to admit that and at some point withdraw from the process that Enda Kenny has already committed us to.

Or we could just say no to the treaty now, and default. Enda will be shunned by Europe for promising something he could never deliver, but we won’t mind. He’s done the right thing by at least asking us what we should do. The market has no memory, it will forget and move on. Money will flow back into the country.

And XYZ Corp will still be announcing those new jobs. Expect to hear it just before voting day.

One thought on “Overheard yesterday near Dublin

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

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