FERGUS FINLAY: IMF won’t step in and save us if we reject Fiscal Compact Treaty

TWO things really set me on edge at the weekend.

One was Sinn Féin and that rag-tag group that calls itself the United Left Alliance.

The other was Leinster Rugby.

My wife is a mad rugby fan. Munster of course, first and foremost. She’ll cheer any Irish team, but she’ll pray for Munster. So I thought, a couple of months ago, that a pair of tickets to the Heineken Cup Final would make a great birthday present for her. I bought them secretly before the pool stages were over, but even then it looked a good bet that there’d be an Irish presence in the final.

Although her birthday isn’t until later in the week, I wanted to give them to her after the semis, so she would have ample time to reflect on who she might bring with her. (She’s free to bring anyone she likes, of course, but I have the plane tickets!)

Although our hearts were broken when Munster didn’t make it through, there was the consolation after Saturday that at least one Irish team would be there. But would Brian O’Driscoll, Jonny Sexton and Rob Kearney be joining them? What a gut-wrenching experience that was, watching their titanic struggle with the tickets to the final in my pocket. Of course they had no way of knowing how much I had riding on the outcome, but they sure put me through it. I don’t think I’ll ever forget that last five minutes! Now at least we know for sure that we’re in for a hell of a final — and my wife (at least!) will be there. Two teams who hate to lose, and are impossible to beat. They’ll play with pride, passion and skill, and there will be nothing left out there when it’s over.

It’s already clear that the next month in Ireland is going to need another campaign that’s fought with pride, passion and skill. The referendum on the Fiscal Compact Treaty will go down to the wire, and it’s going to take a real show of self-confidence to secure the Yes vote we need. The Government has chosen wisely in putting Joan Burton and Simon Coveney in charge of their joint campaign, and they will need to be backed up by the best debaters they have.

It’s clear that the opposition are prepared to stop at very little. All through the weekend we were treated to an extraordinary message from Sinn Féin. We don’t need to worry about excluding ourselves from European support if we vote No, apparently. The IMF will bail us out.

The IMF??? Are you serious? Do you remember what the words Sinn Féin stand for? We ourselves. Us, able to stand on our own feet. Proud of our heritage, committed to our history, dedicated to the principle of self-determination. And if that doesn’t work, we can rely on the IMF.

Even if it were true, and it isn’t, wouldn’t you have thought that Sinn Féin would be the last organisation in the world to be telling us to spurn our European membership so we could rely on the crumbs from the IMF table? Our last Government, having destroyed the economy, negotiated a pretty terrible deal from the troika, and it has fallen to the present Government to try to inch us away from that.

But the IMF, throughout its history, has never offered to support a member of the EU on its own. And in those situations where it has got involved, it doesn’t negotiate terms — it imposes them.

Before he won the Nobel Prize for Economics, Joseph Stiglitz wrote this about the IMF: “The IMF likes to go about its business without outsiders asking too many questions. In theory, the fund supports democratic institutions in the nations it assists. In practice, it undermines the democratic process by imposing policies.

Officially, of course, the IMF doesn’t “impose” anything. It “negotiates” the conditions for receiving aid. But all the power in the negotiations is on one side — the IMF’s — and the fund rarely allows sufficient time for broad consensus-building, or even widespread consultations with either parliaments or civil society. Sometimes the IMF dispenses with the pretence of openness altogether and negotiates secret covenants.”

Now, I know that not everyone agrees with Mr Stiglitz, and even Nobel-prize-winning economists aren’t always right. And, of course, the IMF has changed somewhat — it is no longer as secretive and authoritarian as it once was.

The IMF no doubt has its supporters and defenders — it’s just a bit shocking to find Sinn Féin among them. The bottom line, I’m afraid, is that if anyone is mad enough to believe that the IMF would step in where our European partners can’t or won’t, and their terms of engagement wouldn’t make our present austerity look like a picnic, they really do need their heads examined.

No more than anyone else, I don’t like austerity politics or policies. Right now, however, while we’re fighting our way out this mess, there is no choice. There are much, much better ways of “doing” austerity, and I’ll return to that theme next week, because we have made some terrible choices already.

For instance, some of the protests against austerity choices in the past week — health closures in the midlands that will deprive elderly people of a home, and the totally unjustified cutbacks in the domiciliary care allowance — are the kind of protests that need to be listened to and supported.

BUT Pat Rabbitte had it 100% right on RTE’s The Week in Politics when he said that in our present circumstances, stability is a precondition for investment, and investment is a precondition for growth. In that sense, voting Yes is not voting for permanent austerity, as Sinn Féin would have it. If we are to rebuild our economy, it is vital that the European economy be put back on a strong and stable footing. You might hate it, and the belt-tightening that’s part of that — but it has to be done.

There is hope, I think, in the thought that Sarkozy will be replaced in France by a left-wing leader, who seems determined to get the issue of growth back on the European agenda. He has never argued that a commitment to growth is incompatible with the discipline that’s necessary right now. Instead his position has been that austerity alone won’t solve the crisis of unemployment.

Reuters recently summarised Francois Hollande’s plan for France by quoting one sentences that he uses again and again: “The French people must know that as president I will ask only one question: before every extra effort, before every reform, every decision, every law, every decree, I will ask myself one single question: ‘Is it fair?’”

It is possible to manage austerity and ask yourself that question every day. What’s not possible is to convince yourself that if you vote No, austerity will go away. It won’t — in fact there is every reason to believe it will get worse unless all of us in Europe find a better way to work together.

Hollande’s election could mean the start of a new alliance for growth and fairness. In that sense, voting Yes is only the start.


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