A No vote to the Fiscal Compact Treaty would lead to greater austerity in Ireland and see the interest rate the State pays on its borrowings increase.
This is the view of Fine Gael Galway West TD Brian Walsh who is calling for a Yes vote saying it will ensure market confidence, continued foreign direct investment, and responsible governance by future administrations.
The Fine Gael Deputy said that the fiscal parameters contained in the Treaty are already in force under the existing EU budgetary framework, and Ireland will be bound to comply with them regardless of whether it ratifies the Treaty.
“A ‘No’ vote would almost certainly result in an overnight increase in Government bond yields – the interest rate that we pay on our borrowings – and impact severely on future budgets when we do return to the markets,” he said.
Dep Walsh also argues that a No vote would “compromise the potential for further growth in the economy” resulting in the State’s €16 billion annual deficit having to be “bridged through cuts rather than by growing our economy”.
He also described as “without foundation and utterly false” claims by the No side that rejection of the treaty would mean “less austerity”.
“We would be shirking none of our responsibilities to comply with the centrally agreed fiscal rules by voting No in the upcoming referendum,” he said. “They are provided for in the existing EU fiscal framework and will remain binding regardless of the outcome of this referendum.
“Voting No would have absolutely no impact in terms of reducing austerity. In fact, it would have the effect of causing increased austerity as we would be paying higher interest rates on our borrowings when we return to markets following our exit from the bailout programme.”
Dep Walsh said a Yes vote means access to the European Stability Mechanism funds which would allow Ireland access to international markets and allow the State to begin borrowing at sustainable interest rates again.
