Deputy Halligan accuses government of "shaking the big stick"

Wednesday, 9th May 2012

Deputy John Halligan Colr. Sean Reinhardt Waterford's Independent TD Deputy John Halligan has challenged the Government to give the people of Waterford a compelling reason to sign up to the Fiscal Treaty, instead of simply 'shaking the big stick of not getting another bailout'.

In a joint statement to the press, Deputy Halligan has joined with local councillors Sean Reinhardt, Blaise Hannigan, Julie Landers and Gerry O'Mahony in urging the people of Waterford to vote No to the Treaty.

"We are asking people to use their vote to oppose further mechanisms for imposing more austerity and cuts on working people and the less well-off in order to ensure the current and future repayment of the gambling debts of banks and international speculators. What this country really needs is debt reduction", the statement read.

"The coalition must be really feeling the pressure if they are resorting to threats and bullying to get what they want from the Irish electorate", Deputy Halligan commented. "Building their campaign for this referendum overwhelmingly on the scaremongering of the Irish people is shameful behaviour for any elected representative."

"The Treaty certainly won't solve the problems in the eurozone right now, nor will it provide a fiscal discipline that is an answer to the excesses that caused the crisis. Back in 2007 we were already completely compliant with the various components proposed under the Fiscal Treaty (the general Government balance was 0.3%, the structural balance was 2.3% and our debt-to-GDP ratio was 24.8%). Given the fact that budget deficits were not what ruined this country, it is exceedingly doubtful whether the Treaty will even prevent similar problems from happening again."

"Leading economists are predicting that this country will need a second bailout programme when the first one concludes at the end of 2013, although the Government continues to insist to the contrary. We are currently on target and meeting our commitments under the EU/IMF bailout programme and the Government has categorically ruled out another bailout. Isn't it a little ironic, so, that they are holding accessibility to the ESM fund as so crucially important in the run-up to this referendum.

Deputy Halligan also pointed to the significant fiscal cost which the emergency / bailout fund would bring to the Irish Exchequer. "We're being asked to initially pay €1.273bn in five equal instalments starting in July 2013 into the fund, which is a pretty hefty insurance bill considering that the Government is assuring us we won't need a second bailout."

Should the need arise for another bailout, Deputy Halligan insists there are other sources of institutional funding available. "Europe did not allow us to let an Irish bank go down and all the evidence suggests it will not allow a country to go under either. An IMF spokesperson has said there's no reason why Ireland could not apply for money from the IMF when the current bailout ends in 2013. The European Financial Stability Facility (EFSF) remains a source of funding for all Eurozone countries until the middle of next year. The remaining lending capacity of the EFSF for programmes initiated before July 2013 is €248 billion."

The Treaty will give EU and non-Irish institutions and personnel a far greater say in how Ireland manages its economy, according to Deputy Halligan. "As experts on our corporate tax and financial transaction taxes will tell you, others may well have different agendas and may seek to promote their own national interests ahead of ours.

"The structural deficit targets for 2015 proposed in the compact will mean further cuts of €5.7 billion in that year or equivalent cuts spread out over a few years, which will do untold damage to the already battered domestic economy. This is in addition to any cuts already implemented under the current programme. Regardless of whether or not the referendum is passed, we still need cuts and new taxes totalling €8bn over the next three years. That is an almighty adjustment in a country that has already suffered so much pain. It's estimated as an average of €5,000 per household per year – it mightn't be new taxes, it might be reduced services, but the average cost of the adjustment from 2013-2015 is in that order. But there are other options for helping to close our budget deficit. Were this country to reduce tax breaks for the wealthy to EU levels it would save an estimated €1.5 billion a year.

"The biggest problem that this country is facing is unemployment, now standing at 438,000. The austerity policies being pursued by the Government are not going to bring that figure down and the money we're paying out is unsustainable.

"It is a widely recognised fact that there has been little improvement in fiscal deficits in countries actively pursuing austerity policies. The International Labour Organisation has predicted global unemployment will grow by 6m to 202m this year and warned austerity measures being pursued by countries such as Ireland will lead to further job losses. It said austerity had resulted in weaker economic growth, increased volatility and a worsening of banks' balance sheets and that had led to a further contraction of credit, lower investment and, consequently, more job losses. Ironically, this has adversely affected government budgets, thus increasing the demands for further austerity."