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The vote will decide whether Ireland will accept the EuropeanFiscal Compact, a treaty designed to enforce tough fiscal rulesamong the 17 countries with the euro as their currency (it is alsosigned by 25 of the 27 European Union countries). The treaty wouldforce governments to be far more tight-fisted: While current EUrules forbid deficits from rising above 3 per cent of grossdomestic product (GDP), they have largely been ignored, even byGermany. The treaty would limit deficits to 0.5 per cent of GDP,and force countries to make this national law. Even though an Irish no vote wouldn t veto the treaty whichonly requires the assent of 12 of the 17 euro zone states itwould be a dramatic message of rejection of the German-ledausterity agenda by a country that has long been prized for itsfiscal discipline. And the effects on the Irish economy are hard topredict. All of Ireland s major political parties Fine Gael and Labour,who govern in a coalition, and the opposition Fianna Fail arebacking a Yes vote. The no campaign is led by the resurgent SinnFein, whose left-wing nationalist policies (and reputation as theformer political branch of the now-defunct Irish Republican Army inNorthern Ireland) leave a bad taste in many voters mouths. The arguments on both sides are compelling both from aEurope-wide perspective and from an internal Irish perspective.Here s a guide to the campaign. The Irish case for yes: Ireland s government argues that the treaty will guarantee astable recovery, will reassure investors that Ireland is a safeplace, thus allowing Ireland to return to the bond market nextyear, and will give Ireland credibility in international politicalcircles, thus allowing it to negotiate better terms in the future. In particular, Dublin officials point to the large number ofmultinational corporations in Ireland a third of Irish jobs arewith foreign firms and warn that a no vote would scare awaysuch employment-generating investment. So far, Ireland has been exemplary in its austerity since 2008,it has slashed 25-billion from its budget, and has received sixpositive reviews from the International Monetary Fund. Given thosesacrifices and the financial credibility they have generated, theyes side argues, why blow it all away for a treaty rejection thatwon t actually change anything? After all, Ireland will suffersevere cuts to government services whether or not the treaty is inforce. And a no vote could be very dangerous, because Ireland is on theverge of another crisis: Since May, yields on Irish bonds haverisen to a nearly unaffordable 6.25 per cent as investors stay awayfrom Dublin government debt amid fears that a Greek collapse orexit will damage Ireland. We would expect there would be a sharp selloff of Irishgovernment votes if there s a no vote, Owen Callen of Dublin sDanske Markets told said in a TV interview. So a no vote coulderase all the gains of the past four years and push Ireland intoits worst crisis yet. Without the treaty, Ireland would not be able to borrow fromEurope s rescue fund, the European Stability Mechanism. Marketswould almost certainly reject Irish debt, leaving Ireland with veryfew sources of credit and thus making a default or collapse muchmore likely. On top of this, yes supporters note that the no campaign is largelybacked by Sinn Fein, and more moderate voters might not want togive the resurgent far-left party a major victory. The Irish case for no: Ireland is being punished for good behaviour, the no side pointsout. Irish governments have been lean, low-spending and transparentinstitutions; even at the peak of the boom, they didn t build updebt or spending. Its crisis wasn t caused by waste orpublic-sector excesses, but by a real-estate bubble that has seenproperty prices fall by 56 per cent, causing a cascade of bankfailures and expensive bailouts. Yet today, Ireland suffers from 14.5 per cent unemployment, andconditions appear to be deteriorating. Ireland s borrowing costsare higher than those in less-austere countries such as Spain andItaly. No economic growth is projected for 2012, and prospectsdon t look good for 2013. If four years of Europe s mostintensive austerity policies haven t improved conditions inIreland, the argument goes, then how will even more severeausterity? By signing the treaty, the no side says, Ireland will send amessage to Berlin and Brussels that a purely debt-cutting approachto the crisis isn t working. That message has received a strongbacking from newly-elected French president Francois Hollande, fromthe Dutch parliament, and from other sources. On Wednesday, theNobel Prize-winning economist Paul Krugman joined that campaign. At this point the Germans need to face the reality that thiscannot work and that the Irish, who ve been such good soldiers inthis crisis, if even the Irish say no then that would actually senda helpful message, Mr. Krugman told the BBC on Wednesday. Thewhole intellectual framework has been tested to destruction in theeuro zone. Ireland would theoretically be denied access to the EuropeanStability Mechanism, but in the event of a serious crisis, Europewould probably step in. If it didn t, Ireland could still rely forcredit upon the International Monetary Fund, which has been astrong backer of Ireland s recovery plans. The European case for an Irish yes: Anything that could raise the risk of an Irish default would bedisastrous for Europe. Ireland s debt levels are many times higherthan Greece: British banks hold an estimated 180-billion in Irishdebt, and Germans another 150-billion. If Ireland s economy isn t kept in reasonable shape, alarge-scale debt default would do serious damage to the euro itself not to mention British and German banks. As such, a no vote could place Europe s largest economies injeopardy, spreading investor fear of debt contagion and Irishcollapse, and destabilizing the entire economic recovery. Not only that, a lack of euro zone unanimity around the treaty and the philosophy behind it could damage the stabilitymechanism, forcing compromises. If Ireland were granted specialexemptions from the treaty s terms, why should Greece or Spainhave to abide by its extremely strict rules. It will create stability in the euro zone, Prime Minister EndaKenny said in a TV address on Wednesday and only with thatcontinent-wide stability, he said, can Ireland return to jobgrowth. The European case for an Irish no: Many European leaders and economists believe that the Germaninsistence on austerity is pushing the continent s economies inthe wrong direction, and that a period of growth and inflation isneeded to build up demand, start tax revenues flowing and createthe productive conditions in which debt can be repaid. Theoretically, Europe could punish Ireland, even forcing it intodefault, for failing to ratify the treaty. But to do that wouldsend a stark message to other countries: If you play by the rulesand impose austerity, you ll still be hurt so why botherparticipating? If the EU s star pupil were to be consigned to the disaster zoneof default in response to an exercise in democracy such as areferendum, asks John O Brennan of the National University ofIreland, how could other debt-ridden states be convinced of thevalue of implementing austerity policies? As such, the argument goes, an Irish rejection would show that theausterity agenda is not working, and would create an opening for analternative approach. More related to this story Investors fear Spain spiralling toward bailout France to push harder for euro bonds. I am an expert from laser-beautymachine.com, while we provides the quality product, such as Cavitation Beauty Machine , IPL Beauty Machine Manufacturer, IPL Beauty Machine,and more.
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