Ireland: IFA Calls for YES Vote in Fiscal Treaty Referendum

This is the IFA Statement: 

YES for the Irish Economy and Growth 

Membership of the EU and a stable euro is critical for exports, jobs, inward investment and economic recovery, through:
 – Access tomarkets and exchange rate stability
 – critical for our export dependent sectors including the agri-food sector, with exports of €9b in 2011; – Low Interest Rates for investment and borrowing
– essential to achieve growth targets of Food Harvest 2020 ;
– Access to funding –
 to meet existing public expenditure requirements and to provide access to European Stability Mechanism (ESM), if necessary; and
 – Foreign Direct Investment in Ireland – supporting employment and national income.

Agriculture is the only major sector with a common EU policy, the Common Agricultural Policy (CAP), centrally funded from the EU budget.
The CAP benefits both producers and consumers:
– Supporting the provision of high quality, sustainably-produced food at reasonable prices and maintenance of the rural environment; and
– Supporting economic activity in all parts of the country, with 300,000 jobs in agriculture and the food industry.
 Negotiations on the future size and structure of the CAP post-2013 are on-going. It is important that Ireland has maximum influence and goodwill in the negotiations.

Why Farmers and their Families should vote YES to the Fiscal Treaty.

VOTE YES IN IRELAND’S INTEREST 

Questions and Answers on The Fiscal Treaty. What is new about the Fiscal Treaty? 

• The Fiscal Treaty puts existing EU legislation on the rules covering Member States’ debts and deficits into national legislation. What are the technical debt and deficit rules in the Fiscal Treaty?

1. Balanced budgets should be the norm, with a limit of 0.5% on “structural” deficits.
2. A limit of 3% on budget deficits in years of economic downturn or exceptional external event.
3. A 60% Debt: GDP ratio (or taking steps to approach this at a rate of 1/20th of the gap per year).

• Note: These rules have already been agreed by Ireland and other Euro member states, through the Stability and Growth Pact and the more recent ‘Six Pack’ of economic reform measures (2011).

What happens if Ireland does not ratify the Fiscal Treaty? 
• Unlike previous EU referendums, Ireland does not have a veto. Failure by Ireland to ratify the Treaty will not prevent it coming into force.
 • The Treaty will come into force at the beginning of 2013 once 12 or more Member States have signed up to it.
 • A country outside the Treaty will not have access to the new permanent bailout fund, the European Stability Mechanism (ESM). What is the potential impact of Ireland being excluded from the ESM?
 • Ireland’s general government deficit in 2011 was €16b. The budget adjustment for 2012 (cuts in public expenditure and increases in taxation) was €3.8b.
• Ireland is currently dependent on ‘bailout’ funding from the EU/ECB/IMF to support this deficit and to continue to fund its public expenditure requirements (e.g. health and education). This programme of support runs until the end of 2013.
 • If Ireland did not have access to the ESM, this would severely weaken the Government’s ability to borrow funds in future at affordable interest rates.
• If the Government was unable to borrow funds, the budget deficit may have to be eliminated immediately through cuts in public expenditure and increases in taxation.
• In this way, rejecting the Treaty could lead to even more austerity and job losses. (Source: Irish Farmers Association)