Jason O’Mahony and Andre Pappin has put together The Spoofers Guide to the Fiscal Treaty. I’m pretty sure there should be an apostrophe in that and the error on the cover page is the only one contained in its 32 pages. It is a humourous read and the commentary alongside the text will generate the odd smirk.
Kieran Allen has a “50-page booklet” out called The Fiscal Treaty and the Euro Crisis – Reasons to Vote No. I haven’t seen it but Chapter 1 on Permanent Cutbacks can be read online and you can decide if it’s worth a fiver to read the whole thing. I’m pretty sure this is not meant to be funny but I laughed a few times.
RTE’s Europe Editor, Tony Connolly has a short guide to the Treaty. If doesn’t have the whimsical style of the Spoofer’s Guide but is effective in getting across the key points. There are no mistakes.
Sinn Fein offer something similar on their voteno2012.ie website. There are plenty of mistakes though.
If you want something more visual you can go to the Socialist Party’s austeritytreaty.ie where you can watch Paul Murphy, Clare Daly and Joe Higgins speak in slow, deathly tones about the end of civilisation as we know it. By just changing the first two syllables the government have a website stabilitytreaty.ie which is a little fluffy and doesn’t have the drama of its austerity counterpart, but it is a little closer to the truth.
The ‘balanced-budget rule’ in the Treaty on Stability, Coordination and Governance has attracted some attention. The rule is not new (it is actually from a June 2005 Council Regulation) but it is interesting to track how the article dealing with changed over the leaked drafts of the Fiscal Compact. The relevant article is 3(1).
This is the initial draft provided in mid-December:
1. The Contracting Parties shall apply the following rules, in addition to and without prejudice to the obligations derived from Union Law:
a) Revenues and expenditures of the general government budgets shall be balanced or in surplus. The Contracting Parties may temporarily incur deficits only to take into account the budgetary impact of the economic cycle and, beyond such impact, in case of exceptional economic circumstances, or in periods of a severe economic downturn, provided that this does not endanger budgetary sustainability in medium term.
b) The rule under point a) above shall be deemed to be respected if the annual structural deficit of the general government does not exceed a country-specific reference value, which ensures an adequate safety margin with respect to the 3 % reference value mentioned under Article 1 of the Protocol (No 12) on the excessive deficit procedure annexed to the Treaty on European Union and to the TFEU (hereinafter ‘Protocol No 12′) as well as rapid progress towards sustainability, also taking into account the budgetary impact of ageing. The Contracting Parties shall ensure convergence towards their respective country-specific reference value. As a rule, the country specific reference value shall not exceed 0.5 % of nominal GDP.
c) Where the debt level is significantly below the 60 % reference value mentioned under Article 1 of Protocol No 12, the country-specific reference value for the annual structural net deficit may take a higher value than specified under point (b).
On the 6th of January a short clause was added the end of 3(1)(c)
(c) Where the debt level is significantly below the 60 % reference value mentioned under Article 1 of Protocol No 12, the country-specific reference value for the annual structural net deficit may take a higher value than specified under point b), but in any case no more than 1.0% of nominal GDP .
By the 10th of January the full article 3(1) was:
1. The Contracting Parties shall apply the following rules, in addition to and without prejudice to the obligations derived from Union law:
a) The budgetary position of the general government shall be balanced or in surplus.
b) The rule under point a) above shall be deemed to be respected if the annual structural balance of the general government is at its country-specific medium-term objective as defined in the revised Stability and Growth Pact (Regulation (EU) No. 1175/2011) with a
deficit not exceeding 0.5 % of the gross domestic product at market prices. The Contracting Parties shall ensure convergence towards their respective medium-term objective. Convergence shall be evaluated on the basis of an overall assessment with the structural balance as a reference, including an analysis of expenditure net of discretionary revenue measures, in line with the provisions of the revised Stability and Growth Pact.c) The Contracting Parties may temporarily deviate from their medium-term objective in case of an unusual event outside the control of the Contracting Party concerned which has a major impact on the financial position of the government or in periods of a severe economic downturn as defined in the revised Stability and Growth Pact, provided that this does not endanger fiscal sustainability in the medium term.
d) Where the ratio of government debt to gross domestic product at market prices is significantly below 60 % and where risks in terms of long-term sustainability of public finances are low, the lower limit of the medium-term objective specified under point b) can reach a deficit of maximum 1.0 % of the gross domestic product at market prices.
In the actual Treaty the article is:
1. The Contracting Parties shall apply the rules set out in this paragraph in addition and without prejudice to their obligations under European Union law:
(a) the budgetary position of the general government of a Contracting Party shall be balanced or in surplus;
(b) the rule under point (a) shall be deemed to be respected if the annual structural balance of the general government is at its country-specific medium-term objective, as defined in the revised Stability and Growth Pact, with a lower limit of a structural deficit of 0,5 % of the gross domestic product at market prices. The Contracting Parties shall ensure rapid convergence towards their respective medium-term objective. The time-frame for such convergence will be proposed by the European Commission taking into consideration country-specific sustainability risks. Progress towards, and respect of, the medium-term objective shall be evaluated on the basis of an overall assessment with the structural balance as a reference, including an analysis of expenditure net of discretionary revenue measures, in line with the revised Stability and Growth Pact;
(c) the Contracting Parties may temporarily deviate from their respective medium-term objective or the adjustment path towards it only in exceptional circumstances, as defined in point (b) of paragraph 3;
(d) where the ratio of the general government debt to gross domestic product at market prices is significantly below 60 % and where risks in terms of long-term sustainability of public finances are low, the lower limit of the medium-term objective specified under point (b) can reach a structural deficit of at most 1,0 % of the gross domestic product at market prices;
(e) in the event of significant observed deviations from the medium-term objective or the adjustment path towards it, a correction mechanism shall be triggered automatically. The mechanism shall include the obligation of the Contracting Party concerned to implement measures to correct the deviations over a defined period of time.
The successful post holder (up to 5 years fixed term contract) will be a member of the Economics, Finance and Entrepreneurship Group, reporting to the Executive Dean of DCUBS. He/she will conduct high quality teaching and research in Economics and contribute to the development, design, delivery and management of courses at undergraduate, postgraduate and executive levels. The post holder will also be expected to contribute to School administration.
Candidates must hold a relevant honours degree and ideally possess, or have made significant progress towards, completing a PhD in the relevant discipline. Previous teaching and research experience is required. Appointments made above the bar require that the candidate currently holds or will obtain before date of appointment, a relevant doctorate and have substantial research capability and potential. Relevant industry/ business experience would be an advantage.
All areas of economics will be considered.
Closing Date: 11th May 2012
Details here.
Applications are invited from suitably qualified candidates for a Lectureship in Economics (2 Posts) at the JE Cairnes School of Business and Economics, National University of Ireland, Galway. The posts are available from September 1st, 2012.
Candidates should hold a PhD in economics. Research and teaching expertise in one of the Discipline’s four research priority areas is desirable: health economics and the economics of ageing; environmental economics, rural development, and marine economics; international finance and macroeconomics; and mathematical economics, methodology of economics, and political economy.
Application Deadline on May 31, 2012
Details here.
This article appeared on page A10 of today’s Wall Street Journal.
GALWAY, Ireland—To see how Ireland is rebalancing its economy without control of its currency, order the nine-ounce steak at Martine’s in this costal Irish city.
It goes for €28 ($36.60), down from €35 in 2008.
But don’t come for lunch: The cozy Irish restaurant has stopped serving it because no one was coming. Even sharply lower prices weren’t enough to entice workday eaters coping with falling wages.
"None of us can see a light at the end of the tunnel at all," says Martine McDonagh, the owner of the restaurant, which occupies an old house near the water in Galway. "We’ve slashed everything. I don’t know how long you can continue to do it."
Ms. McDonagh’s restaurant isn’t alone. As Ireland trudges through the pain of economic recovery, restaurant owners across the country have been cutting prices to sustain a flow of customers and avoid going out of business.
The result is sector-specific deflation that has brought big drops in revenue not only for Irish restaurant owners but also for hotel proprietors, retailers and most other consumer-linked businesses.
The situation is a peril of the euro. Because they are tied to the common currency, ailing euro-zone countries such as Ireland, Greece and Portugal haven’t been able to devalue their legal tender to boost competitiveness and speed recovery. Instead, Europe’s prescription has been to lower the prices of their domestic goods, services and wages.
But it is excruciating medicine, ravaging Irish consumer businesses faced with the sting of falling prices and sluggish demand.
Read the whole thing.
From a Bloomberg editorial.
Ireland Deserves Breathing Room on Debt to Revive Economy
By the Editors Mar 28, 2012 12:00 AM GMT
Even by Europe’s standards, the people of Ireland have plenty to complain about. Their economy is in the grinder, and living standards have crashed.
In the governance of the European Union, the disproportionate weight of small nations is part of the constitutional formula. On May 31, Ireland will hold a referendum on the EU’s new fiscal compact. A “no” vote won’t stop the agreement from taking effect — which is a pity, because it’s badly designed — but it would undermine the pact’s legitimacy. Ireland’s grievances need to be addressed before they become a threat not just to Irish democracy but also to the wider European project.
Item one on the list is Ireland’s effort to amend a government obligation to the Irish Bank Resolution Corp., the entity Dublin built to contain the failed Anglo Irish Bank (and a couple smaller, equally broken institutions). This unusual debt — called a promissory note — pays cash to the IBRC, which in turn services a debt to the Irish central bank under an emergency liquidity program. The government wants to defer its next payment of about 3 billion euros (2 percent of national output) which is due March 31, and reschedule the obligation in future years.
The European Commission and European Central Bank are resisting. (Under the terms of the euro system, Ireland’s obligation to its central bank is, at one remove, an obligation to the ECB.) The debt must be serviced as promised, they say. Rules are rules, and they can’t make an exception for Ireland.
This is a mistake. An exception should be made for Ireland because the terms of the Irish bank bailout were themselves both exceptional and unfair.
Read the whole thing.
Some of the headlines in relation to yesterday’s Quarterly National Accounts release by the CSO are almost completely contradictory.
A headline writer in The Irish Times goes with the following for a piece by Dan O’Brien
GDP rises for first time in four years
Over in The Irish Examiner they follow a similar line while The Irish Independent go with
Economy slips into recession in second half of 2011
A growing economy that is in a recession. It could only be Ireland.
University College Dublin and the UCD School of Economics is inviting applicants for a temporary 3-year post of Lecturer in Economics.
Applicants applying to this post will ideally have an established track record of Research, Teaching and Learning and the capacity to make a significant contribution to the academic life and general administration of the School.
2010 Salary Scale: €35,355 – €81,452 per annum
2011 Salary Scale: €31,820 – €73,307 per annum
All new entrants to the Public Sector as of 01 January 2011 are subject to the 2011 Salary Scale.
Appointment will be made in accordance with the Department of Finance guidelines.
Closing date: 23.30hrs on Tuesday 3rd April 2012
Applications must be submitted by the closing date and time specified. Any applications which are still in progress at the closing time of 11:30pm on the specified closing date will be cancelled automatically by the system. UCD are unable to accept late applications.
- To apply & for more details, go here.
- Informal inquiries to econjob@ucd.ie
The view from Down Under on Ireland’s economic crisis is provided in this episode of ABC’s Four Corners documentary series. There is nothing that is new in the programme but it is a useful 40-minute summary of the crisis.
Full length interviews with Alan Ahearne and Ajai Chopra can also be viewed at the link.
From an editorial in yesterday’s FT.
Let Ireland succeed
Indenturing Ireland’s taxpayers for the benefit of creditors of the country’s mismanaged banks was an idea conceived in Dublin. But if the previous Irish government first set out on that suicidal path, the European Central Bank and the Commission forced Ireland to stay on it. They should stop blocking the last remaining possibility to alleviate the pain.
..
Pacta sunt servanda – agreements are to be kept – says commissioner Olli Rehn. But the EU’s success has depended on commitments evolving in response to political and economic realities. In this case, pacta sunt mutanda is the better principle.
Read the whole thing.
