The yes vote has carried – not a huge surprise to most I’m sure. The one thing the yes side always had going for them was that a no vote would have been a “jump into the unknown.” So it’s the devil we know then; the Taoiseach has already said he will be pushing for a better deal on the bank debt we’ve been saddled with – let’s hope he can get it.
Right, so what now? I’m going to be keeping a close eye on tax rates of all stripes, as well as social welfare, health and education spending. That will tell us who is really going to pay for the promised investment, stability and recovery. Next is the banks – our banking system is broken. Can the government secure a deal that will ensure cash flow for the banks that will find its way into the economy? Banks are supposed to be the vehicle through which money is created (yes, I probably need to do a separate post on this magical power of the banking system). At present the Irish economy is like a pumping system with a broken motor. The stuff is there but it’s not moving anywhere other than out of Ireland.
I’ve made no secret of my distrust of both the euro and this treaty, however I don’t want to be a doomsayer, that gives me no pleasure. I hope we can achieve the growth we need without breaking what will now be our own law. If we can do that, I’ll be the first to hold up a paw and say I was wrong. I don’t think we can do it though. In terms of established economic theory, what we have signed up for points towards economic contraction and prolonged recession. The treaty also has inadequate mechanisms to deal with future crises. I think we will, and sincerely hope we don’t, continue to lurch from one funding crisis to the next.