The honest No voices on our chances of funding
This morning, Denis Donovan, a former Deputy Director at the IMF, clearly stated his view that without signing up to the agreements outlined under the Stability Treaty, the IMF would not fund us if we needed more money:
The IMF has made it pretty clear throughout this euro debt crisis that they only go in in partnership with Europe. That’s because they don’t want to put their money at risk…The IMF is very worried about getting repaid, it’s a big concern. If the Europeans are not willing to take the risk to lend to Ireland, there’s no way, in my view, that the IMF will be able to do it.
This corroborates and goes even further than the view of Karl Whelan, an economist from UCD, and a favourite of Sinn Féin, who when considering the possibility of emergency funding from the IMF only, wrote “What is clear, however, is that any programme approved would provide Ireland with far less funds than a second EU-IMF programme. This will mean more austerity not less”.
So there we have it. If we opt out of this Treaty, and if we need emergency funding, our chances of getting IMF are between non-existent or one that’s much harsher than what we’re currently experiencing.
And as to Gerry Adams’s suggestion on The Week in Politics last night that we could avail of funding from the European Stability Mechanism (ESM) without signing up to this Treaty. If we were Johnny-come-latelys to this the Stability Mechanism, they would equally be in no humour to be generous about terms. There’s nothing in this Treaty in terms of budgetary constraints that could be avoided if we needed emergency funding after this.
The only honest view on funding on the No side that I’ve encountered is that of Cormac Lucey. Writing in Business and Finance, he bases his argument on the very basis that voting No will mean that we will not have access to the ESM, “Allowing Ireland access to the ESM cookie jar from 2014 onwards would only give the public sector another excuse to delay its long-overdue adjustment to reality.” A fiscal hawk like Lucey would like us to get a harsh budgetary adjustment over and done with in one foul sweep, without any loans from outside to ease the process.
This is what those ton the left have to answer. If it is austerity they are campaigning against, why are they advocating a position that will make austerity much more likely?