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Q & A: The new EU fiscal agreement

Q: Are we getting another referendum?

A: Doesn't look like it. The rest of Europe is no longer insisting that we put the latest deal into the constitution so the decision will be made by the Government and the attorney general's office. The deal signed yesterday is so limited that it is hard to see anybody arguing successfully that we need a vote.

Q: So what happens next?

A: It will take the commission's translators a month or so to convert yesterday's agreement into the various languages and then the treaty will be signed in March.

Q: That seems pretty quick.

A: It will be another year before the thing is ratified by everybody, and then we have until January 2014 to put the changes into Irish law. If we do indeed require a referendum, then there is plenty of time.

Q: What will change thanks to this legislation? Will we have Fritz and Pierre poring over budgets now?

A: That's a common misconception. Budget oversight was introduced under a bunch of rules which the commission have labelled the 'six pack'. And budget oversight is happening regardless.

This treaty, which goes by the rather less macho name of the fiscal compact, is really about one thing, a so-called debt break.

Q: What is a debt break?

A: It is a set of highly technical rules that basically bans governments from ever borrowing again. Some economists have said it imposes a German view of life on the rest of Europe and makes Keynesism illegal.

Q: You mean politicians won't ever be able to prime the pumps again. We won't be able to borrow to expand?

A: Some economists say it makes sense to borrow, while others say allowing politicians to borrow is like giving a teenager an empty house, a well-stocked drinks cabinet and telling them not to party. In the end, it hardly matters. Chancellor Angela Merkel wants a firm agreement to sell to the German people. And what Angela wants, she usually gets for the very good reason that she's paying a large proportion of the bill.

Q: That all seems familiar; didn't we sign up to something similar when we agreed to the Maastricht criteria back in the 1990s?

A: We did and the problem was that nobody was punished. This is Maastricht for slow learners.

Q: But there must be some sort of get out of jail clause for us?

A: Only if we sign up! After 2013 there's no more borrowing for countries that don't agree to yesterday's deal.

Q: Surely there was more to yesterday's summit than basically rubber stamping an agreement which is going to be ratified in March?

A: Officially, our leaders are very concerned about jobs. It has come to their attention that more than a quarter of young people in some countries such as Ireland and Spain are unemployed.

Q: Please tell me that thousands of civil servants and reporters dodged the snow and a general strike in Brussels for more than this?

A: I'm afraid there really isn't much more.

Q: What do the other member states think about all this?

A: The bar was raised a little higher yesterday, so that 12 (rather than nine) of the 17 countries which use the euro have to sign up if the agreement is to come into effect next January. But most analysts expect this target to be meet easily.

Q: We normally get a few goodies for giving up something in Brussels. What are we getting this time?

A: Nichts. Rien. Nada.

Q: And those famous Anglo promissory notes that will cost us €47bn? Surely, they gave us a little reason to hope?

A: The official line is that some sort of deal is in the offing. If there is a deal on the Anglo repayments, it will come later.

Irish Independent