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Economists for Europe – 5 Economists and one opinion

29 September, 2009 Leave a comment

Published on the Ireland for Europe blog

As previously noted here, a recent Indecon survey reported that 90.8% of economists asked said that Ireland’s overall economic interests were likely to be best secured by a Yes vote.

These were economists from the seven Irish universities, from the ESRI and from Indecon itself. Economists working for the media, banks, government departments or agencies, or with employer or trade union organisations were not included.

In light of this, we held a seminar earlier today titled Economists for Europe, chaired by Dr Alan Ahearne, Special Advisor for the Minister for Finance, and with presentations from Dr Alan Gray of Indecon, Prof. Antoin Murphy of Trinity College, David Croughan of IBEC and Paul Sweeney of ICTU (so, of course, only Gray and Murphy contributed to the Indecon survey).

In his opening remarks, Dr Ahearne reported that the American Chamber of Commerce have said that they provide 300,000 reasons to vote Yes. He emphasised the benefit our EU membership gives us as a traditionally export-based economy, which is to be the case again after the brief period earlier this decade when we were demand-based. 62% of our exports go to other EU countries. Given this emphasis in our economy, he said that it was important for us that the globalised world functioned well.

Alan Gray, Managing Director of Indecon International Consultancy Group, prefaced his remarks by stating that both he and other economists tended to stay away from political commentary, but felt it important to intervene on this occasion. He said that the fundamental question was about confidence, something which can have a major impact, even if not easily quantifiable in models. He said that the economic question is not about the Treaty per se, but about the vote. If there were no vote on Lisbon, we would not feel its absence, but the vote itself would send out a particular message which would be difficult to explain to potential investors. He also made the point that investors would generally give very little attention to Ireland, so this could have a serious impact on perception.

Prof. Antoin Murphy, of the Department of Economics in Trinity College, Dublin, highlighted the help we received from the European Central Bank in two periods: the initial stage of multinational growth from the late 1980s, and in the past year when we needed an injection of liquidity. He also refuted claims that bond prices have already taken our rejection into account, as the trend downwards, rather than upwards as would be expected in such a case.

Paul Sweeney, economic advisor to the Irish Congress of Trade Unions, referred to The Charter Group, a pro-Treaty lobby group. He also admitted that there were concerns about workers’ rights in the EU, but that these had nothing to do with Lisbon. He appealed to the right of collective bargaining in the Charter of Fundamental Rights, and the benefits of FDI which we have from being less Eurosceptic than Britain. He termed Cóir’s poster on the danger of a €1.84 minimum wage as a disgusting lie.

David Croughan, chief economist of the Irish Business and Employers’ Confederation, talked of how business was overwhelmed by the benefits of the internal market and the single currency. In terms of specific changes Lisbon would introduce, he outlined the benefits of the Protocol on Eurogroup in terms of closer coordination and dialogue between finance ministers. He said that business never really thought there was a problem threat to our direct taxation last time, and that despite what we might have heard, he felt that our international reputation was damaged last year.

In conclusion, Dr Alan Ahearne recalled the old joke that if you have five economists in a room, they’d have six opinions between them. On this occasion, however, they were all of one mind, that a Yes vote was a crucial component of our route to economic recovery.

What Declan Ganley is not addressing

28 September, 2009 Leave a comment

Published on the Ireland for Europe Blog
Over the weekend, I looked back on the points Declan Ganley made at the launch of Libertas’s campaign two weeks ago.

As I watched this, I found that nearly every point he made could be disputed, if not refuted. Below is a critical analysis of his case.

He begins by stating that this is the same European Constitution that the French and the Dutch rejected, and that we rejected last year, ignoring the key symbolic changes made to the Constitutional text to remove the statelike trappings which were of such concern, and in the Irish case, it ignores the European Council of December 2008 to agreement to keep our Commissioner and the June 2009 agreement with the legally-binding guarantees.

He then says that the Lisbon Treaty is not about jobs or the economy, arguing that it would be a handicap to us, as we’re moving several key areas to be decided at EU level. He’s in a small minority on this. 90% of independent Irish economists in a recent Indecon survey, with no connection to the government, unions, employer groups or the media, believe a Yes vote is important for our recovery. This report looks at a number of reasons, mainly related to the effects of the perception of being eurosceptic on both funds from Europe and whether multinationals choose to locate here.

Mr Ganley goes on to disparage claims that decisions in the boardrooms of America would be affected by a No vote, citing The Wall Street Journal. But one Murdoch-owned newspaper is hardly enough to make that point. Fair enough, Mr Ganley would argue, he’s since made use of an article by Wolfgang Munchau of the Financial Times, who had strongly supported the Lisbon Treaty last year, in which he has become more critical of it. But whatever Mr Munchau’s criticisms, he is still ultimately in favour of the ratification of the Treaty.

But whatever the FT or the WSJ might say, surely the American Chamber of Commerce should carry more weight than opinion pieces, however highly regarded. They have clearly stated that they favour a Yes vote, citing 300,000 reasons to vote Yes.

Mr Ganley then claims that nothing has changed, citing Baroness Kinnock, who had said that the Treaty itself would not need to be re-ratified by the Houses of Parliament. True, the Treaty itself may not have changed, but each of the 27 governments are bound by the European Council agreement, which has been lodged with the UN, with the same status as the Belfast Agreement.

He complains about European bureaucrats giving information to Irish schoolchildren on the EU. It sounds here as if he’s complaining about them canvassing, which was unlikely, given the age demographic. More realistically, they were informing young citizens about their polity. This is typical of those on the No side, to give out that the EU is distant, but then continue to do so when it tries to connect with the people.

He then claims that tax harmonization is on the agenda. This is clearly false. Not only do we now have a clear guarantee on taxation, which has assured Sen. Shane Ross, who cited this as his main concern last year, but direct taxation is in no way, shape or form an EU competence. There is nothing the EU could do, no matter what the French or others want, to affect our rates of corporate or income taxation.

He then talks of empowering people who we can never vote out of office. But no one who is not elected and accountable to the people can make EU laws. The Commission, appointed by the Governments, may propose laws, but it is the Council of Ministers, and the European Parliament under Lisbon, which legislates.

He claims that Lisbon creates an unelected President of Europe. This is the President of the European Council, who is Giscard d’Éstaing’s words, acts more like a chairman than anything else. They would have no policy agenda, there’d be nothing to organize a 27-member popular election on.

More bizarrely, he criticizes the fact that the High Representative of the Union for Foreign Affairs and Security Policy is also unelected. What country in the world elects its foreign minister? Were Micheál Martin, Hillary Rodham Clinton, David Miliband or Bernard Kouchner directly elected?

He makes a big deal of the fact that the EU is given legal personality and that we will become citizens of the European Union. That has been the case since Maastricht, so that is an objection to the position of the last seventeen years, not to measures in the Lisbon Treaty.

He claims that we don’t need the agreement on the Commissioner that comes into effect with the Lisbon Treaty, as the Swedish Prime Minister has outlined a 26 + 1 arrangement, giving the High Representative to the 27th country. This is not the position of Commissioner that was of such importance to us, and this agreement would only last till the next enlargement.

He goes on then to throw out the term democratic deficit, as if Lisbon exacerbates this. It doesn’t. Under Lisbon, we will have:

  • greater scrutiny to national parliaments to make sure European institutions aren’t overstepping their remit

  • the European Parliament having joint legislative powers and review of the budget
  • the Citizens’ Initiative. Yes, the Commission doesn’t have to accept it, but we can’t even put something on the Irish Cabinet’s agenda
  • the Council of Ministers voting in public

He dismisses the campaigns by Intel and Ryanair on the basis that they are merely trying the ensure that they will not receive further fines from the European Commission. Even if one were to take that view, it would be to ignore the fact that businesses of all levels are calling for a Yes vote. The members of the Small Firms Association and the Irish Small and Medium Enterprises Association have overwhelmingly shown support for the Treaty, while the main social partners ICTU and IBEC are supporting it too.

Mr Ganley might have strong business credentials, but we really should not take his word as our guidance on this matter on clear importance to our position in Europe and the wider world. He arguments do not stand up to scrutiny, and he has not addressed these areas of the debate.

Why business and unions are campaigning for Lisbon this time

24 September, 2009 Leave a comment

First published on the Ireland for Europe blog

Last year’s referendum in June 2008 took place under very different economic circumstances. While Bear Stearns had collapsed in March, and it was clear that the credit crunch had arrived, few realised what the true extent of the crisis would entail. The rise of unemployment in July of 19,000 was the highest ever monthly increase, and from then there seemed to be little good news. As unemployment grew, the pressure on the state’s social welfare budget grew while the tax intake shrank. The government found itself in a considerable deficit which two budgets and public sector pay renegotiation has failed to fully address. After guaranteeing the banks’ debt in September 2008, both the state and public found borrowing more costly as the major credit-rating agencies Moody’s and Standard and Poors downgraded Irish banks and Ireland’s credit sovereign rating.

We face this referendum then with a widely different economic situation. Both employers and unions realize how important it is to maintain a strong relation with Europe so that Irish bonds do not fall further in their standing in international markets. A vote that could be interpreted as eurosceptic would add uncertainty to our standing of our banks. Leading international firms, Intel, Ryanair, and Microsoft, have clearly stated their support for the implementation of the Treaty, taking active roles in calling for a Yes vote. Equally, ICTU General Secretary David Begg is a Patron of Ireland for Europe and, speaking on Tuesday, he stated that rejection of the Lisbon Treaty, allied to the return to power of the Conservative Party in Britain, could see Ireland “boxed in an Anglo-Saxon, Eurosceptic, northwestern corner of Europe” and could seriously hit Irish jobs.

These are the people who deal day-in, day-out with Irish employment, and they have clearly committed themselves to a Yes vote.

Economic effect of the Lisbon Treaty vote

23 September, 2009 Leave a comment

First published on the Ireland for Europe blog

Those on our side of this debate have been criticized for linking the Lisbon Treaty with jobs or recovery. It is, of course, not as simple as a claim that there will be jobs that will be created or maintained directly because of the vote on the Treaty, but it is part of the process. It is because of the reality that we attracted multinationals to this country for many reasons, such as our low tax rates and our well-educated English-speaking population, but also because we provided a link to a European Union which now has a population of 500 million.

If we were to vote No, the appetite for reform among other European countries would not be diminished. But with the likely election of the highly Eurosceptic David Cameron as Prime Minister, the United Kingdom could well decide to opt out of that process. After a second No vote, European leaders could justly assume that we had made our decision clear that we did not wish to be part of that process either. While the United Kingdom could afford to go it alone if they wished, we should not consider this an option for us.

It is true that we will remain members of the European Union no matter what way we vote on 2 October. But a No vote will mean that we will not be a part of core decision-making processes. Particularly for those who have had concerns about EU policies in the past, such as on agriculture and fisheries, it is crucial that Irish voices are heard at all levels of the EU.

This might seem like a biased analysis coming from this organization. It is backed up, however, by those who have no interest beyond creating and securing jobs, and by independent economic analysts. Those working at all levels, whether small firms, medium enterprises or multinationals, have emphasised the importance to job-creation and maintenance in this country of a strong commitment to Europe.

A recent survey by IBEC found that 86% of employers polled believed the passing the Lisbon Treaty was important or very important to Ireland’s recovery. In its statement, IBEC Director of EU and International Affairs Brendan Butler said: “Ireland has been very successful in attracting major investment from abroad, which in turn has led to the creation of many jobs. Being fully engaged with Europe is vital to ensure this continues. A yes vote will send a positive signal to foreign investors that Ireland is committed to being a key player in the world’s most successful economic union.”

Most significant is perhaps the judgement of academic economists in the Indecon report, which surveyed the views of the 66 non-government economists in all Irish universities and the ESRI. The report concluded that our vote would have a significant effect on the cost of borrowing. Alan Gray, one of the authors of the report, wrote that “a No vote would result in additional concerns about Ireland’s precise role in Europe at a time when we cannot afford any self-imposed additions to our economic problems.” Equally, many economists have spoken out in their own capacity, such as Prof. Alan Matthews writing for Irish Economy yesterday.

It is vital not to create this uncertainty about Ireland’s place within the European Union at this time given the state of our public finances, the cost of borrowing and our rate of unemployment. Over the remaining nine days, we will be maintaining a focus on this aspect of the referendum and the implications of our vote.

Jesuits supporting the Lisbon Treaty

21 September, 2009 Leave a comment

Published on the Ireland for Europe blog

In an earlier post, I looked at the support that prominent Catholics have given to the European project. Of particular note in recent weeks have been a few Jesuits, making their voice heard first in their objection to Cóir’s misuse of Caravaggio’s The Taking of Christ.

In this video, Fr Edmond Grace, SJ, answers the question why we should be voting on the Lisbon Treaty again, given last year’s rejection.

Also worth checking, is a blog by Fr Fergus O’Donoghue, SJ, who has posted a few items recently on the Lisbon Treaty.

The facts: Abortion and the EU

21 September, 2009 Leave a comment

First published on the Ireland for Europe blog

Despite the clear guarantees which we have secured on successive occasions, Cóir have persisted with the pernicious deception that Ireland’s position on abortion is being threatened.

It is helpful then to outline precisely what protections exist in Irish Constitutional law on abortion, and what European Union provisions protect this measure.

Article 40.3.3°

The State acknowledges the right to life of the unborn and, with due regard to the equal right to life of the mother, guarantees in its laws to respect, and, as far as practicable, by its laws to defend and vindicate that right.

This subsection shall not limit freedom to travel between the State and another state.

This subsection shall not limit freedom to obtain or make available, in the State, subject to such conditions as may be laid down by law, information relating to services lawfully available in another state.

Because of concerns on abortion, we secured a Protocol as part of the Maastricht Treaty in 1992 ensuring that this provision would not be affected.

Protocol 17 of the Maastricht Treaty

Nothing in the Treaty on European Union, or in the Treaties establishing the European Communities, or in the Treaties or Acts modifying or supplementing those Treaties, shall affect the application in Ireland of Article 40.3.3 of the Constitution of Ireland.

After the concerns raised during last year’s campaign on ethical issues, the Government secured an agreement with the 26 other EU countries which would come into law on the ratification of the Lisbon Treaty and would have the force of law of any international treaty, like the Belfast Agreement.

European Council Guarantee 2009

Nothing in the Treaty of Lisbon attributing legal status to the Charter of Fundamental Rights of the European Union, or in the provisions of that Treaty in the area of Freedom, Security and Justice affects in any way the scope and applicability of the protection of the right to life in Article 40.3.1, 40.3.2 and 40.3.3, the protection of the family in Article 41 and the protection of the rights in respect of education in Articles 42 and 44.2.4 and 44.2.5 provided by the Constitution of Ireland

The European Union cannot not make laws in areas not specified by the Treaties, and there is no mention of abortion anywhere in any of them. Furthermore, the European Court of Justice has previously made explicitly clear in its rulings that the EU has no competence to decide a country’s laws on the matter of abortion.

These guarantees in our own Constitution, in EU Treaty law and from rulings of the ECJ make clear that this claim has absolutely no basis whatsoever.

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Myers convinced to vote Yes by the No campaigners

19 September, 2009 Leave a comment

Published on the Ireland for Europe blog

Kevin Myers

Kevin Myers

We were pleased to welcome the support this morning of Kevin Myers, who came out as a convert to the Yes side in this morning’s Irish Independent.

In it, he excoriated the new leaflet published by the UKIP‘s European Parliamentary Group.

The ‘No’ pamphlet also showed a picture of a large hypodermic with the caption: “Will we get EUthanasia?” Well, that kind of disgusting and disingenuous question is what we repeatedly got during the infamous divorce referendum debate in the 1980s. And my answer is that if we do get EUthanasia, the very first people we should EUthanase are the fine fellows who went in for EUthanasia scare tactics before the referendum.

A comparable piece of mischief was at work with the pamphlet’s sly and grubby query: “Do you wish to split up the family farm?” Ah, that one again.

At least, the ‘No’ pamphlet spares us any wheedling insinuations about conscription and neutrality — perhaps because the authors know that, aside from the fir-bolg Left, as characterised by the Rossport potties, most people know that our neutrality is dead. We are Europeans. Our soldiers must be part of the European Reaction Force, and have already served in Chad within that military framework. .