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Noonan preaches to the Chamber converted

FINANCE Minister Michael Noonan acknowledged he was largely preaching to the converted when he addressed Shannon Chamber members at a breakfast meeting on Monday, but he urged all there to use the influence they have to help the referendum pass.

“What I’d like to do this morning is explain why everyone should vote yes. I realise I am preaching to a lot of converted people here but I’d like to encourage you as well to talk to the people who work for you and to stress the importance of a yes vote, because it is very, very important for Ireland’s future and as the Taoiseach said last week it’s probably more important than any of the general elections we’ve had in recent years,” he said.

 

While some have claimed that the Fiscal Treaty wouldn’t have prevented the Irish crisis, (something acknowledged as recently as last week by Clare TD Michael McNamara) Mr Noonan said if the treaty had been in place during the boom years it would have headed it off.

“It’s a great pity we didn’t have this treaty seven or eight years ago because if this treaty had been in place then we wouldn’t be in the fix we are in now. What the treaty does is set down, in law, rules to prevent Governments from running excessive deficits. It requires Governments to have balanced budgets and it sets down rules as well about reducing the very heavy burden of debt that’s on some countries including Ireland.

“If we had those rules under law seven or eight years ago the previous government, the Fianna Fáil/Green government, wouldn’t have been legally entitled to run the deficits they ran or engaged in the burden of debt they raised.”

Mr Noonan said that the travails of other countries could also have been prevented.

“Leaving the Irish situation aside, the rules are the rules for the Euro zone, so the Government in Greece wouldn’t have been able to run excessive deficits either or the Government in Spain or Belgium or any of the countries where the main problem is too big a deficit and too much debt.

“The first point to remember is that if you look at the problem in Ireland and in the other countries that have a problem, the problem arises from not balancing budgets, borrowing too much, leaving too much of a burden of debt for ordinary citizens and many countries passing it on to the next generation. If we had it seven or eight years ago we wouldn’t have the fix we are in and we should take the opportunity now to put the provision in place.”

He said that a yes vote would protect international investment, something that is particularly important for Shannon.

“The second very strong reason for voting yes is more practical. We have a lot of international investment in Ireland. You recall the announcements of the last few weeks, with people like PayPal and Apple. It’s been the strongest year for inward investment that is on the record of the IDA and the pipeline is very strong and

there is investment line up for nearly every part of the country.
“But you know, because you are in a region that has benefited from inward investment in the past, that American business people don’t invest in Ireland simply to sell into the Irish market, they use it as a base for Europe and the wider world beyond that. If someone in a boardroom in Boston or Chicago or New York looks at Ireland and there’s uncertainty about Ireland’s attitude towards Europe, then it’s no longer as attractive as it was for establishing here and any doubts like that create uncertainty that puts off decision making.

“There is no doubt at all that a no vote will slow down the flow of inward investment and that will have a direct consequence for jobs. I’m not saying that they’re all going to up and leave the day after a no vote. That’s not the way it works. But things that are about to go to board level for decisions to set up in Ireland; the handbrake will go on and the decision won’t be made.”

He said he also feared that companies already here may start to look at their future in Ireland.

The third reason he put forward for a yes vote is that it will give Ireland the option of borrowing cheaply.

“At the end of 2013 there’ll be only one fund in Europe, that’s the ESM, the European Stability Mechanism.

It’s written into this new treaty that only the countries that ratify this treaty will have access to that money. The money we have under our bailout programme is secure, we’ve spent about 70% of it at present and fulfilled over 100 conditions. That’ll continue until the end of the programme so we have access to low cost money until the end of 2013.

“After that the plan is that we go back into the international markets and we borrow money on the international markets at whatever the then rate is. But Europe is quite unstable and it would nice to have an alternative to the markets if we can’t get back in. Or if we can’t get back in to fully fund the country, it would be nice to get back into the fund for part of it. Even if we are fully funded by the markets, the very fact that we have an alternative source in2013 will enable us to negotiate a better price in the market.”

A yes vote will provide a bit of security in a beleaguered country. “I’m not sure what’s going to happen if there’s a no vote, I’m not sure what our status will be in Europe, I’m not sure what the consequences will be for inward investment. I know it’ll be adverse but to what degree I’m not sure. So people who want certainty in their lives, certainty in their jobs and certainty in this economy, the balance of certainty lies in a yes vote the balance of uncertainty lies in a no vote and it’s a leap in the dark and I think we should vote for certainty.”

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