Sunday 20 October 2019

Joan Burton: Voting No would be a reckless gamble for us

Foreign direct investment depends heavily on our ties to Europe -- we must show that we are improving relationships, says Joan Burton

TOUGH CHOICES: Joan Burton says that a Yes vote is the right thing for the country
TOUGH CHOICES: Joan Burton says that a Yes vote is the right thing for the country

They say truth is the first casualty of war. Experience tells us that truth is also a casualty of febrile political campaigns and that is particularly true of European referendum campaigns in Ireland.

Well, here is one inconvenient truth that will be as valid the day after the referendum count as the day before, no matter what the result is.

Ireland is presently borrowing €50m a day. That cannot go on indefinitely. It can't even go on at the same rate in the short term. Voters have to decide if they want Ireland to have continuing (though conditional) access to European funds while we work our way through the tax changes and spending cuts to eliminate this deficit and restore our independent capacity to fund ourselves in the longer term or not.

I know that we will experience a barrage of posters that will urge us to vote No to austerity as if voting No could magically halt the austerity juggernaut in its tracks. If we vote No, we will not have access to the European Stability Mechanism, which provides a helpful backstop in the form of an additional line of credit. In the absence of access to such a credit line, we would have to move even more rapidly into a balanced budget situation involving adjustments far in excess of the tumultuous budgets of recent years.

This leaves voters this year in a classic Catch 22 paradox. A Yes vote gives us a reasonable guarantee of access to funds albeit under strict supervision by the troika. A No vote may give the semblance of independence but it will require Ireland to negotiate emergency funds that will have identical -- if not even more onerous -- scrutiny provisos.

There is no escape, one way or the other, from fiscal restraint in our present situation. There is no honest realistic choice in front of voters this year that offers an easy escape from unpalatable budgetary measures. To pretend otherwise just leads the country straight into a cul de sac.

I visited a Jobs Fair in Blanchardstown on Friday attended by local, national and international companies including PayPal, HP Ireland, eBay and Symantec. I know that when these and other companies set up here in Ireland it is because they believe they are in a country that is wholly committed to the European Union. We have punched well above our weight when it comes to attracting foreign direct investment here and I believe that voting Yes to the Treaty on Stability, Co-ordination and Governance in the Economic and Monetary Union will show that Ireland is willing to play its part in building a more financially stable European Union.

To vote No would profoundly damage our relations with countries and institutions that want Ireland off the watch list of endangered economies. It would bewilder American companies that are planning their European investments. It would leave China extraordinarily perplexed as to what Ireland's intentions are just at the time when we are making a breakthrough in that enormous but difficult market.

There is a mighty advantage of staying the course with Europe. The signals from every corner of Europe is that collective action to boost growth and investment offers a much better prospect to restore the health of national budgets than sole reliance on austerity. Our previous experience of such joint European action through the Regional and Social funds was entirely positive.

A new programme of European action would recognise a variety of ways where growth can be stimulated by collective action in ways that individual debt-strangled countries like ours cannot do alone. Such a pro-growth agenda should incorporate initiatives to relieve the cost of bank rescues, a particularly onerous burden on Ireland but a vital ingredient in a general mix to assist, for example, Spain to break out of imminent recession.

Bank debt is not exclusively an Irish issue. The arrival of Mario Draghi at the head of the ECB has significantly changed many aspects of that institution's attitude. There is a lot more to be done to help beleaguered countries. I believe we are far better off making that case along with like-minded governments inside the European tent than being a lone voice on Europe's periphery.

As we have established in the course of the past 12 months, reputation means everything in the modern world. Political scientists call it soft power. It is the capacity to influence events and policies in the wider world that arises from the respect that is earned by national efforts and sacrifices to overcome a crisis.

This Government has put painstaking effort into rebuilding Ireland's reputational capital in Europe, in the USA and the emerging global powerhouse that is China. There are some indications that this effort is bearing fruit, notably in the confirmation by leading international companies that Ireland continues to be as much a magnet for inward investment as it was a decade ago.

A No vote would upend that process overnight. Countries don't have friends, they have interests. That is particularly true of a small country that has successfully chosen to base its development and prosperity on being a trading nation. It is in our interest to be inside every European Council, committed to national budget discipline as one significant -- but far from exclusive -- part of a strategy to promote growth and job security in every corner of Europe. It is entirely contrary to our interests to take a reckless gamble now that would leave Ireland isolated, perplex our friends and exasperate those who are currently funding our State till we restore our capacity to do so ourselves.

Joan Burton is the Minister for Social Protection and a Labour TD for Dublin West

Sunday Independent

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