“The EU Fiscal Compact Treaty is a straitjacket that would lead to misery in our country and throughout the EU. This is not the way to solve our problems. It is against the whole spirit of the EU.”
This is the view of Fianna Fáil Galway West TD Éamon Ó Cuív who this week publicly came out against the treaty, urging the public to vote No on May 31. His stance has proven controversial given that Fianna Fáil is officially campaigning for a Yes vote. The move marks yet another sharp difference of opinion between Dep Ó Cuív and party leader Micheál Martin and comes after the formers assertion that Sinn Féin would be his preferred partners in government.
The differences of opinion between Dep Ó Cuív and the leadership will now be the focus of a meeting between the Connemara TD and Fianna Fáil whip Seán Ó Fearghail which will discuss his continued membership of the parliamentary party.
An experienced politician, Dep Ó Cuív is aware that coming out against the FF-line carries the risk of being expelled from the parliamentary party. However, speaking to the Galway Advertiser this week the controversial TD said he believes a majority of FF members are behind him.
“The opinion poll at the weekend showed that support for the treaty is 50/50 among Fianna Fáil voters,” he said. “I would be in the minority within the parliamentary party but on the ground I think you’d have a majority of members agreeing with my view.”
Following Dep Ó Cuív’s stance three Fianna Fail Galway county councillors have called for a No vote - Seán Ó Tuairisg, Séamas Walsh, and Tomás Mannion.
Why vote No?
Dep Ó Cuív describes the Fiscal Compact Treaty/Austerity Treaty, depending on your point of view, as “a very, very bad deal” for Ireland and the EU. What are his main reasons for opposing it?
Dep Ó Cuív believes it is dangerous to write into the Constitution a particular economic course that will exclude all others. A concern of No campaigners is that the current ‘solution’ being put forward by the treaty is one that will not work if/when different scenarios arise over the years, thereby handcuffing the ability and economic room for manoeuvre of governments to deal with issues as they arise. In short, a ‘one size fits all’ solution, based only on the current crisis may not work in other scenarios.
“One of the most erudite analysis of the treaty has been published by Davey Stockbrokers,” says Dep Ó Cuív. “In their analysis they say that enshrining new rules ignores key risks from financial spillover from the Eurozone, leaving a government with no control and no remit or freedom to deal with future crisis.
“What is being tried here is an absolute experiment and writing experimental rules. It would be like the GAA writing a new set of rules into its rulebook and setting them in stone before they were even tried out on the field.”
Dep Ó Cuív also questions the assertion of Yes campaigners that voting No to the treaty will make it very difficult to impossible for the State to secure future funding from the ECB.
“People are telling us that if we vote No we will not get funds, but they are acting as if we need the money next week. We are fully funded up to 2014,” he says. “No matter what happens the reality is that, faced with the chance of funding Ireland or letting the euro go down the tubes, the EU will back us. This is an empty hollow threat.”
Dep Ó Cuív is also critical of the treaty as he believes it will result in the ‘austerity forever’ scenario that treaty critics fear will result from a Yes vote.
“We are being asked to take the national debt back down to five per cent per annum until we reach 60 per cent of GDP,” he says. “The problem is that we also have the banking debt and as Joan Burton said, it is going to be very difficult to do anything until we deal with our banking debt first.
“If you leave the banking debt in, as part of the national debt, the amount you would have to take out of the economy to get to the figures we are supposed to would strangle our economy.
“I have suggested to the Government that it gets the independent Fiscal Advisory Council to draw up a 10 year budget scenario based on following the compact rules and another where half our banking debt was written off. I am not against good fiscal practice but this is way too much.
“Also very few on the Yes side are arguing in favour of the merits of the treaty or saying that it resolves the issues of the banks or the crisis in the Euro.”
Back to the drawing board?
EU economic policy has been dominated for the last year/18 months by French president Nicolas Sarkozy and German chancellor Angela Merkel. However, the recent first round of the French elections has put the socialist candidate François Hollande slightly ahead of Sarkozy, changing the potential dynamic of EU politics.
Monsieur Hollande has been extremely critical of the ‘Merkozy’ compact treaty and is known to be interested in renegotiating it. He is also interested in Eurobonds as a way to save the stricken currency, a move the Germans are reluctant to endorse.
Dep Ó Cuív feels that the Government should have waited to see how the French election turns out before committing to hold the referendum. However, now the die is cast, he believes a No vote is now necessary. At least 12 EU states are needed to ratify the treaty. Dep Ó Cuív feels a rejection by Ireland, An Hollande presidency, and governmental changes in Holland, could see a swing towards renegociation.
“We need to go back and renegociate a sustainable deal and we should put ourselves in the forefront of those negotiations,” he says. “François Hollande will insist that the treaty has measures to stimulate growth and employment.
“We also need to get Germany to recognise its 50 per cent share of the blame in the banking crisis for giving out cheap credit to other banks in the EU. There are problems in Holland and Belgium, and the Spanish have difficulties as well. I also believe they would be supportive of us. We are not going to be the only ones looking for this to be examined again. It would be stupid for us to throw away our best card.
“If the Fiscal Compact Treaty is genuinely the best deal, then it is horrendous. It is the end of the European vision that states look out for each other. If it has come to putting a gun to our head, we should look at all our options. I believe it is better to wait, the Yes side have nothing to lose in hanging around for a year and wait and see. A No vote would lead to a postponement and renegociation of the treaty. We have plenty of time.”
