Those of you who use Facebook in Ireland may have noticed an advert on the side asking “Why vote Yes?” I sent in the following question, not really expecting an answer: “The treaty is asking us to balance our “full employment budget” each year, to avoid going into structural deficit. How do you reconcile this with the need to grow the economy out of a severe recession?” I must say I wasn’t really expecting an answer, but lo and behold this was waiting for me in my inbox on Monday:
Many thanks for submitting your question on Fine Gael’s innovative new Facebook application.
I am delighted to answer your question on the Stability treaty.
Penelope, please take a moment to view this video from Minister Brian Hayes on future stimulus measures; http://youtu.be/lLvTSXZ_Ksw
The jobs stimulus to the Irish economy will not come from extra Government borrowing and spending, but rather from more exports and business investment. Our Action Plan for Jobs has identified 270 measures to be implemented to improve Ireland’s export performance and to remove barriers to job creation.
Our strategy is beginning to work. Employment is beginning to rise again (up by 10,000 on a seasonally adjusted basis in the last quarter of 2011). Investment is flowing into the country (PayPal, Microsoft, Allergen etc. – the IDA added a record 13,000 jobs last year). Employment in the tourism industry rose by 6,000 in the second half of the year, in part reflecting the cut in VAT on tourism services.
Of course, the Stability Treaty is only part of the solution to restoring confidence in the euro. New fiscal rules will only restore confidence if they go hand-in-hand with greater efforts to support growth across the rest of Europe.
In January, the Taoiseach introduced the discussion of SMEs, focusing on steps that Ireland is taking at national level to develop this sector as the engine of growth and recovery, such as the micro finance fund and the loan guarantee scheme.
Once again, many thanks for taking the time to ask about the upcoming Stability Treaty. We hope that you have a better understanding of the Treaty and how it will bring about recovery, inward investment and stability to Ireland.
With the exception of the last paragraph’s conclusion, there’s not a single thing in there that I disagree with. And I looked up the Action Plan for Jobs and I agree with that too. But you may have noticed they didn’t really answer the question, because the Treaty has nothing whatsoever to do with the government strategy, or vice versa. I’ve said before that I like Fine Gael; oh they’re good neoliberals all right, but at present we all are because there’s no alternative (yet). I like sensible, targeted policies such as reduced VAT on tourism, and tax breaks for companies bringing in much needed jobs. This is a new government policy, providing special tax breaks to potential investors instead of grants, which other countries are offering. As that article points out, this means that instead of directly investing public money, they can offset the cost against future tax revenues. All in all very sensible. Except, and here’s the problem, because it’s policy, these tax breaks affect the “full-employment budget” (which I wrote about before), with the potential to put us into structural deficit, as defined by Europe; remember we don’t get to define it. The bottom line is that this is not allowed by the treaty. Europe already doesn’t like our low corporation tax rate, so do you think they’re happy that these multinationals are investing here and not in Belgium or France? Europe will move towards tax hamonisation because that is what a true monetary union requires. We have a much better chance of implementing the government strategy if we’re not subject to the fiscal treaty. We won’t be able to meet the terms of this treaty, and the result will be that we’ll be forced to either a) break our own laws, or b) balance the budget somehow. The government won’t be able to change tax policy towards the multinationals, so you know what that means. And this is where the right wing and I part company. I’ll be damned if I’m going to sit back and watch this government cut welfare spending to those who really need it so they can balance a budget that includes repaying massive amounts to reckless gamblers who invested in now defunct banks.
I do however feel obligated to update you on a couple of things I said before. I criticised Enda Kenny for what I saw as weasel words with his “messages from boardrooms across the globe” thing. So when I stumbled across this I decided to post it here in the interests of fairness. I don’t think it will change anyone’s mind, the poor woman sounds like she’s reading something for the first time after it was hastily scrawled by Michael Noonan. Further, the anticipated jobs announcement hasn’t materialised (this one is not the one I was expecting, although it’s the exact type of thing I was talking about). Anyway, I’m glad they decided not to use Intel’s expansion in Leixlip as some sort of poster ad for the Yes camp. If the yes vote carries, we might be given this one as a consequence (Look, see what voting Yes did for us!).
I’m still saying vote NO tomorrow. It’s up to you humans now, don’t stuff it up.