INVESTMENT
STABILITY
CERTAINTY
This Treaty is vital for confidence in Ireland among overseas investors. Our Taoiseach and Ministers have recently conducted successful trade missions to China, the US and EU member states. We need this to continue.
This Treaty will ensure that we have access to the European bailout fund of €700 billion should we need it in the future. It is an insurance policy, like you would have on your home or car, in case things go wrong.
Vital jobs announcements have been made in recent months – such as Paypal, Microsoft, Eli Lily and Apple. These job creators’ decisions have been due to our increasing political and economic stability and above all the determination of the Irish people - despite great sacrifices - to restore Ireland’s economic health.
At the moment we rely on the EU/IMF bailout fund of €85 billion to pay for all public services, running our schools, hospitals and Garda stations, paying all public sector pay and pensions. We’re determined to return to normal market funding next year - raise money on our own like we did before.
This Treaty will ensure that no government, in Ireland or any other European country, will ever again be able to abuse taxpayer’s money with give-away budgets, designed to win short term popularity, but with devastating long term consequences.
A Yes vote will build on this momentum. It will send a strong message to potential investors that Ireland is open for business, that we are committed to securing the future of our economy and our currency. It will clearly say that Ireland is a safe bet for new business start-ups and for business expansion.
We hope and intend not to need the ESM, but it amounts to an insurance policy. A Yes vote will ensure we can access this €700bn fund. What Ireland doesn’t need is to be excluded from it.
The Treaty will make sure Government’s engage in good housekeeping – balancing income with expenditure , and managing taxpayer’s money responsibly. The ultimate goal is to manage our debt in such a way that over time, taxpayers’ money goes towards targeted growth initiatives to create jobs and not into servicing debt.
STABILITY
TREATY
A Yes Vote is a vital step in our recovery! The Stability Treaty is aimed at renewed confidence in a stable euro. It is about safeguarding jobs and ensuring growth and recovery. It’s about maintaining our confidence abroad, particularly that of job-creating investors. It’s about making sure we have access to the money that allows us to fund those public services and all government spending. It’s about managing our debt and making it more sustainable. Ireland is on target, and our reputation is steadily improving. But we can’t control world events and the world economy. Investors need to know Ireland has a backup in the form of the European Stability Mechanism and we can only access that if we ratify the Stability Treaty. I urge you to take the time to read this short guide to the Stability Treaty, and to vote Yes on the 31st of May.
- LUCINDA
WHAT DOES THIS TREATY DO? It is an agreement between European countries whose currency is the Euro, and others who may wish to join the Euro. Its purpose is to reinforce the rules which protect the stability of the Euro and to ensure that all countries, big and small, respect them. The Treaty will ensure that EU member states balance their budgets in a responsible way and do not borrow excessively. Importantly, the reckless policies pursued by Governments in recent years cannot be repeated.
Published by Lucinda Creighton, TD Minister of State for European Affairs Leinster House, Kildare Street, Dublin 2. Email: lucinda.creighton@oireachtas.ie
STABILITY
TREATY
vote Yes on the 31st of May
Working for you in Dublin South East with your Fine Gael team: Gay Mitchell MEP; Eoghan Murphy TD; Senator Catherine Noone; Cllrs. Kieran Binchy, Paddy McCartan and Edie Wynne.
WHY IS IT IMPORTANT FOR IRELAND? The Stability Treaty will strengthen confidence in a the Euro. The Euro is vital for Ireland because we do all our business through the Euro currency. Irish pensions, salaries and all public services are paid in Euro. Our savings are lodged in Euro. We have a direct interest in stabilising our currency.
Stability Treaty Q&A GUIDE Why Is access to the ESM bailout fund dependent on ratifying the Treaty?
What are the benefits of Ireland’s membership of the Euro? The euro has been beneficial to Ireland on a number of fronts, including: • It has removed a large element of exchange rate risk with Ireland's trading partners in the EU. • It has reduced transaction costs in international trade. • It shielded Ireland from a currency crisis in 2008 when the banking sector collapsed. • It has helped to increase trade from Ireland to the other eurozone countries by 43 per cent since 2002.
The Treaty makes it clear that a Member State must ratify the Treaty in order to qualify for assistance from the ESM. The creditor countries in the eurozone who are providing the lions share of the funding for the ESM need assurances that they are not putting money into a black hole. They must go back to their parliaments, as we do, and explain to taxpayers why they are investing money in these funds. Therefore, they are seeking some type of assurance from countries who may seek funding from the ESM that they will make every effort to reform their economies, reduce their deficits and debt levels and abide by rules which apply to them.
What are the main provisions of the Treaty?
The Government intends to re-enter the markets after our EU/IMF programme expires in 2013. We believe that a condition of market re-entry will be the availability to Ireland of a credible “insurance policy” in the form of access to the ESM.
Balanced Budget Rule: Government budgets should be balanced or in surplus, with structural deficits set at a limit of a 0.5% of GDP. This requirement must exist in national legislation. “Debt Brake” Rule: Countries with a debt/GDP ratio of more than 60% must reduce their ratio by one-twentieth per annum.
How much of this is already in place? Very little in the Stability Treaty is actually new. Most of its provisions were already provided for in the Stability and Growth Pact (1997) and in the so-called “Six Pack” measures which were implemented in 2011. The crucial difference is that the Treaty addresses one of the serious failures of the current regime: large Member States will no longer be permitted to avoid the consequences of breaching the rules, since the Stability Treaty will apply to all member states equally. This is an important consideration for Ireland.
vote Yes on the 31st of May
What is the ESM? The European Stability Mechanism (ESM) is an emergency fund of €700 billion guaranteed by members of the eurozone to provide loans to eurozone countries in need of emergency funding. Ireland and other countries subject to an EU/IMF bailout programme do not need to contribute to the ESM until they come out of their programme.
Will the Treaty solve the Eurozone crisis? The Treaty is a vital tool in restoring stability and confidence to the Euro area. However, it is just part of a jigsaw of measures needed to prevent future crises. The Government believes that the implementation of the Treaty will give the ECB increased confidence to play a more active role in stabilizing the eurozone sovereign debt crisis. Indeed, even the agreement last December to sign up to this Treaty led to a major injection of confidence which triggered a more liberal approach by the ECB.
If we vote No, will there be a 2nd referendum? Previous EU treaties such as Nice and Lisbon required ratification by all Member States before they could take effect, which effectively gave Ireland and every other Member State a veto over ratification. The Fiscal Treaty can take effect once 12 Member States have ratified it, therefore no one country can delay its implementation. The Member States which ratify the Treaty can simply move ahead without those who do not, so there would be no demand for a second referendum. The Taoiseach made this clear earlier this week when he said that there will only be one referendum on the Treaty. We will have one opportunity to say Yes.