Why vote NO to the Fiscal Stability Treaty? Why are our Irish politicians telling us to vote YES?
Simply, what is the Fiscal Stability Treaty?
Why is Ireland holding the Referendum 2012? Why did the Irish government try so hard to avoid having to call a referendum in Ireland?
What happens if Ireland votes NO to the Fiscal Stability Treaty?
What happens if Ireland continues on the path the government have laid out for us? Our EU partners have already forced upon us Property Taxes 23% VAT and now water charges on the way. What taxes will be next. The direction the Irish are being forced to take by EU will certainly mean more and more taxes. Thats for SURE.
Why are governments making this Fiscal Stability Treaty so complex, are they afraid we might understand its true intentions?
Why can’t the politians explain clearly the intentions of the Fiscal Stability Treaty. Do they understand it themselves or are they hiding something from us?
So many questions on the Stability Treaty, so much uncertainly and a push to get the referendum 2012 over. Why?
Are you aware that the ESM (European Stability Mechanism) isn’t even setup and yet Portugal, Spain and Greece need immediate bailing out? Where will all this funding come from? Well, more and more taxes will be needed to pay for all these bailouts and ofcourse the vicious circle of Ireland having to borrow to help bailout itself out and our partners. Every cent borrowed needs to be repaid with excessive interest rates. The government tells us not to worry as they have agreed with their collegues in the EU that we will be permitted to pay these loans over an extended timeframe. But nobody is agreeing to help reduce our debts or even write a portion off? Why?
Well this youtube video gives a very simple and yet clear explanation why there is so much hidden from the Irish Public? Have a good look at it and make your own decision. The video uncovers alot of what our irish politicians don’t want us to know. Make your own mind up and dont let the media, the government or the banks push you into a decision that suits them.
It looks like Ireland and the Irish public will be left with mountains of debt. More and more Irish will be required to pay higher taxes (VAT 23%, property tax, water charges, higher car taxes, higher fuel taxes and the list goes on) resulting in the standard of living in Ireland falling, rising debt and a massive increase in the number of Irish unable to pay off their debts whether they be mortgages, credit cards, etc. Concerning times ahead so make up your own mind on how to vote, independently of the Irish governments campaign for a YES vote on Referendum day 2012.
Here is the link:
Read on……So what happens if we vote NO
“Getting out of the Hole
We now understand that we are suffering the worst recession since we gained our independence because of a greed driven property boom whipped on by irresponsible bankers, a failed system of democracy, which foisted emigration on our people in the fifties and eighties and has now sacrificed our sovereign as well as our personal independence, and a reliance on overpaid public servants in the Dept. of Finance and Central Bank who failed to take action while our overall indebtedness on a per capita basis and expressed as a percentage of GNP grew to be the highest in the world during the period from 2002 to 2008. Once we were hit by the crisis triggered through the inevitable bursting of the property bubble, our politicians stepped in to ensure we turned the shotgun on ourselves by taking on the €35 billion net liabilities of the reckless and illegally operated Anglo Irish and INBS, setting up the mad bureaucracy of NAMA which bankrupted the remaining banks and prevented the property market finding its true level, and guaranteeing that public servants would continue to have a pay and pensions premium generally estimated at 30-40% over the Euro area average through the Croke Park agreement. These actions ensured that the country would be bankrupted, small businesses would be forced to close and our brightest and best would catch the next flight to Australia. The current policy of austerity and adherence to the diktats of the Euro zone troika will ensure 15 years of stagnation unless we receive a 50% cut in our Sovereign and bank bond debt financed by Germany or unless we take matters into our own hands and leave the Euro. I think it unlikely that the Germans will give us €200 billion or so to bring our combined sovereign and bank, euro denominated debts to a manageable level and so this article will concentrate on the benefits of leaving the euro.
Although we are the prime architects of our own misfortune through a combination of greed, political mismanagement and inept governance, the lackadaisical manner through which one currency was conceived with 17 Ministers for Finance and 17 Central Banks, was doomed to failure without the closest of centralised control. The Ministers for Finance were to be controlled by the stability pact signed under the Maastricht treaty whereby no country could have a budget deficit higher than 3% of GDP or total sovereign borrowing higher than 60% of GDP. The first country to break these strictures was France and this opened the floodgates for the rest of us. The Central banks were to be controlled by each Governor having a seat on the European Central Bank through which he was to coordinate ECB policy with national policy. The two roles of a Central Bank Governor are to set interest rates and to control money supply. Once in the Euro the role of setting interest rates was removed and the only effective role of the Governor of each Central bank was to control money supply. Why John Hurley the Governor of the Irish Central Bank allowed credit to expand in this country at the highest rate in the Western world during the period 2002 to 2007 is a mystery, which he might come forth from his comfortable retirement to explain, but which also emphasises that the ECB failed in its role as guardian of the euro, to curtail the excesses of members like Ireland who taking advantage of artificially low interest rates during a period of rapid growth, were behaving like drunks at a free bar.
The irresponsibility of the ECB in managing the Euro, which is partially responsible for the devastation, which has been inflicted on our country, provides us with an honourable way out of this crisis. In my opinion the only way to save this country from an extended period of turmoil is to leave the Euro now.
The benefits of leaving the Euro in a determined and structured manner are manifest.
We went into the Euro at .79 punt to the €. We would leave at the same rate. Every bank deposit, every bank loan, every bank debt to a bondholder or to the ECB and every sovereign bond would be transformed from €1 to .79punt for each €1 of the deposit or the liability. There would of course be an immediate run on the punt, which would devalue by at least 50%. This would constitute an effective and honourable restructuring of our sovereign and external debt, which would be morally justifiable because of the role of the euro in contributing to our national problems.
In addition to resolving the Sovereign and Bank debt problems, a 50% devaluation would free the 300000 people in Ireland enduring the dreadful cross of negative equity. Their mortgage now expressed in Punt would be 50% less than it was in Euro terms. House prices now expressed in punts would be extremely attractive to our Euro neighbours and to the Diaspora residing in strong currency countries such as the UK, Australia, etc. House prices would fall by probably 25% in Euro terms leading to a punt appreciation and an elimination of the negative equity curse for those whose mortgage is less than 150% of their current home value.
A 50% devaluation would give an immediate advantage to our industrial and agricultural exporters, and to our tourism industries which would guarantee growth in the economy and increased employment. Because our country is used as a transfer pricing base by the multinationals the increased input costs would be of minimal significance. New car sales would be hit hard but it is much more beneficial to the economy to have workshops keeping older cars serviceable than it is to import new cars form abroad. The increase in oil prices would help to promote alternative native energy sources and better insulation, which would also boost the home economy.
One of the biggest benefits of a 50% devaluation would be that out public pay and pension rates and our social welfare rates would be brought into line with mainland Europe, without cutting pay and welfare rates and our wage rates would be as competitive as they were when multinationals first started to use Ireland as a profitable base.
What are the disadvantages of leaving the Euro? The money in your deposit account would buy half as much if you were to go abroad. You would have to stop visiting your villa in Spain but conversely you would now be able to sell the villa you foolishly bought during the boom in Euro and pay back the loan on it which would now be in punt. It would be much more financially attractive for you to spend your holidays in Ireland, which would give you the consolation of helping the country while getting rid of the stress of travel with Ryanair.
This effect would be of more serious consequence to the corporate and international depositors most of whom have moved their savings elsewhere by now in any event. The Government would have to impose capital controls to stem the exit of funds from the Irish banks while we go through the short transition period from € to punt. When the desired 50% devaluation has been achieved a sensible Government would link our punt to the Euro or Sterling to provide exporters and investors with exchange rate stability. After a 50% devaluation future exchange rate adjustments would be on the upside and this would make our deposits and bonds attractive again leading to a relaxation of capital controls and an influx of investment funds.
An exodus from the euro would shut us off from the Sovereign bond markets as we are at present, but for a definable short term. We would not get funds from the euro stability funds and would be reliant on loans from the IMF at 3%. This would be forthcoming as the IMF always give assistance where the state in difficulty devalues and controls government spending. With tax revenues sharply increased due to the renewed punt denominated exports and growth, while public sector salaries are effectively halved we should return to a balanced budget in two to three years. There would be a period of inflation due to increased input prices but this would also be beneficial for us as a debtor nation, through decreasing the real amount of our liabilities.
A euro exit followed by a 50% devaluation would be a shock to our invaluable multi nationals. However I do not feel that it would be a deterrent to foreign direct investment. The cost of doing business here would be halved, the national finances would be put on a sound footing, the threat to the 12.5% corporation tax rate would be gone, the currency would be linked to the major trading partner and the currency movement predictions would be on the upside. This leads me to believe that leaving the euro would be beneficial to foreign direct investment as it has been to other non euro countries such as Poland.
We have driven our people into poverty and despair because of a failure of leadership from our politicians and a failure of responsibility from our Department of Finance. We allowed public sector pay rates and property prices to get out of control during an artificial credit fuelled boom. When the crisis hit we did the opposite of the Keynesian remedy for a recession by cutting capital spending and increasing taxes. We spent our pension reserve fund and borrowed on international markets to rescue reckless banks, whose business model was based on a pyramid scheme. Three years into the crisis we are still borrowing €400 million a week to pay public sector and social welfare pay rates which are the highest in Europe. Three years into the crises and we still have 800 quangos that are costing billions every year. The options have narrowed with each passing day and now there is only one. We must take matters into our own hands, leave the Euro and rescue this country to have any hope of our children and grandchildren living with us again. The politicians are incapable of resolving the situation because they don’t understand the problem and there are no statesmen in the Dail who could verbalise the solution. We have never needed a national protest movement like we do now. Don’t sit on the fence, while the country burns, shout aloud in protest, leave the Euro now.” ……by Gerard Leahy.