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Tuesday, March 13, 2012

The Fiscal compact in action....?

The eurozone chokes Spain....the fiscal compact in action?

An unfortunate picture has been doing the rounds this morning of Jean-Claude Juncker (Head of the Eurogroup of eurozone finance ministers) jokingly throttling the Spanish Finance Minister Luis de Guindos (don't worry they were all hugs after).

Nevertheless, this as an apt metaphor for the potential which the new fiscal compact has to choke economies such as Spain, with strict budget targets and massive austerity.

(More captions welcome in comments)


Anonymous said...

Get your damned deficit down!!

Anonymous said...

enough with the bad news already!

Anonymous said...

Naranja, pips, squeak. Comprendo?

Rollo said...

It is symptomatic of the EU that jumped up twerps Like Juncker from jumped up little municipalities like Luxembourgh even find a stage to act on and an audience to watch.

Denis Cooper said...

There's an article in the Irish Times today, not mentioned in your press summary, which questions the economic sense of the "fiscal compact".


"THE SO-CALLED “fiscal compact”, as advocated by Europe’s policymakers towards the end of last year, is virtually certain to be subjected to intense debate in the days and weeks ahead as the referendum nears. Unfortunately, the latest plan to save the fragile monetary union is the wrong solution for the wrong crisis."

It finishes with this:

"The Irish have little option but to vote Yes when the so-called fiscal compact is put to the public vote because financial support from the European Stability Mechanism is conditional upon ratification. Close analysis, however, reveals that the new measures are bad policy and could well contribute to further instability in the future."

Disgracefully, the Irish government is not only continuing to refuse referendums both on the ESM treaty itself, and on the EU treaty change which is legally necessary for the eurozone states to proceed with ESM treaty, sticking with its previously announced intention of ratifying them both just on the basis of parliamentary approval, but is even proposing to complete that process BEFORE the referendum on the "fiscal compact".

Consequently by the time of the referendum Ireland would have already committed itself to pay into the ESM, but without any prospect of ever being eligible for any aid from the fund if the Irish voted "no" in the referendum.


"Insanely, the Government has already okayed the ESM Treaty, and the plan appears to be to ratify it in the Dail -- before the Austerity Treaty referendum. This will commit the state to paying several billions to the ESM fund. And if we reject the Austerity Treaty we will have to pay those billions into a fund from which we can never benefit.

Essentially, this manoeuvre extinguishes any democratic content from the impending referendum. Material will be inserted into the Constitution by a citizenry voting with a gun to its head. Some claim that Mr Kenny collaborated in inserting a "secret clause" into the ESM Treaty. This is not true. The relevant clause was highlighted on the Irish Economy blog, on February 2, with a link to an EU factsheet. It's true, however, that the Government kept very quiet about a crucial development. Once the ESM Treaty is ratified, however, they'll tell us this makes opposing the Austerity Treaty impossible."

Patrick Barron said...

A fiscal compact means a loss of sovereignty and is anti-democratic. All citizens must understand that this is exactly what a so-called fiscal union means. It is shameful that a country would give up its sovereignty in the hope of getting funds from another country (via the EU, of course). So politicians propose placing their nations in a perpetual state of dependency for money. How can the populace not recognize this for what it really is--the disolution of the nation.

Yeoman said...

Ireland is now bought and paid for. The Irish people believe they are a member state of the EU,in reality their state is now an asset of the EU, bought and paid for after the billions their leaders have accepted. They certainly have been sold down the river.