May 31, 2012

The fiscal treaty will only make things worse

Posted in Irish Independent · 329 comments ·

In early 1931, the German government under the stewardship of its finance minister, Bruhning, was facing an enormous economic challenge. The economy was contracting rapidly but Germany was dependent on loans from the US to maintain the Gold Standard’s exchange rate. In order to qualify for these loans, the Germans followed orthodox policies, the sort that peripheral Europe is following now, to stay in the monetary union.

But qualifying for loans is very different from being able to pay them back. If you doubt this, ask the thousands of Irish people who “qualified” for loans in the credit splurge and now find themselves in an impossible position.

But as long as Germany followed austerity policies in the face of the recession, which soon became a depression, it secured the financing of its government deficit. So although the deficit was still in place (like Ireland now), the government’s commitment to austerity was enough to allow it to qualify for the loans from the US.

But the economy kept contracting.

Bruhning wanted to keep the flow of US money coming, so he had to stick with the austerity agenda. The plea to the German people was: “If we don’t keep up the programme, we won’t get financed.”

By June 5, 1931, with unemployment rising, retail sales and asset prices rising, Bruhning changed tack and announced that to make the austerity palatable at home, he would have to tear up the reparations from World War One. Germany couldn’t bear austerity and pay back the reparations at the same time.

In the event, Germany kept with the austerity, amplifying the deflationary effects on the economy, which ultimately made a problem, which was that there was already too much deflation, worse. In 1932, Bruhning et al lost their jobs in elections, paving the way for Hitler.

We see that the immediate cause for Hitler’s victory was not the hyperinflation of 1923 but the hyper-deflation of 1932-33 — almost 10 years later.

This episode should resonate with us in Ireland because it seems that the treaty debate has come down to whether we qualify or not for further loans, which will finance our deficit after 2014.

Like Bruhning’s obsession with securing loans to finance his deficit and stay in the Gold Standard, this policy is ignoring what’s happening on the ground in the economy.

We are following a policy of securing loans but, if the economy doesn’t recover, this new credit line we might qualify for will just destroy more wealth, not protect wealth.

Let’s try to explain why credit lines, if you can’t pay them, destroy rather than preserve wealth.

It’s good to see that financial crises don’t destroy wealth; a crisis tells us how much wealth has already been destroyed by too much borrowing in the so-called boom.

In Ireland, if we look at household debt, which according to Citibank in a report last week stands at 220pc of income although it was only 98pc of income in 2000, we can see that it was the borrowing in 2000-08 that destroyed wealth. The crisis only signals this.

The huge debts cause what is called a liquidity trap and this has its roots in the state of the national balance sheet.

Many Irish people’s balance sheets are broken because on the one side we have assets — houses, land and apartments — which are falling in value, but on the other we have debts, which are fixed. At a time when income is falling due to rising unemployment and taxes, this means the debt burden is getting heavier every day relative to income.

As a result, people with savings are saving yet more. Those with debts are trying to pay them down. The same goes for companies. Ireland’s savings ratio has exploded to 17pc of income; it was -5pc in 2007.

People don’t want to borrow because they have too much debt and banks don’t want to lend because they have too much bad debt. Yet the deleveraging is destroying their capital base, too. Again, the paradox is that deleveraging my balance sheet might make my position better, but when we all deleverage at the same time, we drive down asset prices further, demanding yet more deleveraging.

If everyone is saving, who is spending? The rise in government spending is the logical reaction to, not the cause of, the liquidity trap.

By qualifying for loans now that the economy can’t make good on, we risk destroying yet more wealth.

People will argue that the Government is just buying time until 2014. This is a fair point and it goes back to the idea of kicking the can down the road in the hope that something will turn up.

But the metaphor we should be looking at is not kicking a can down any road but rolling a snowball down a hill. The more we roll, the more the ball gains momentum and destructive potential, so that by the time it smashes into reality, the destruction will be much, much worse.

Maybe it would be better to call it now and admit we will default in 2014 because growth is anaemic — as evidenced by another fall in monthly retail sales yesterday — and the debt is too big. We know foreign markets are shrinking, we know that the banks are not lending and we know that credit-free recoveries are few and far between.

Armed with this, we could go to the ECB and say, with a No vote, we know that we will default because the ESM isn’t open to us. We will start this process right now by not paying a cent extra to unsecured bondholders. We will not pay money due next month, and you can help us all figure out what to do next.

This forces the ECB to react and this forces it to think about the political legitimacy of continuing to lumber the Irish people with bank debt, the modern equivalent of reparations.

Then we look like a reasonable country. We say we will never default on sovereign debt as normally understood — debt incurred for schools, hospitals etc — but when it comes to all this bank debt we don’t have any choice. Now that we don’t have the ESM to facilitate rolling the snowball down any more hills, we have to negotiate now.

This will focus the minds of everyone and inject urgency into proceedings. The Americans have an expression: “the extreme urgency of now”. Now is urgent.

The situation in the eurozone is not getting any better. The fiscal treaty, by imposing austerity on an already enfeebled economy, will make things worse, prompting more capital flight. Rolling the snowball down the hill is not an honest option.

Mightn’t it be better to open the negotiations properly now?

  1. stiofanc02

    Im voting no.

  2. Bebie

    It is time for Ireland to stand firm by calling the bluff of the ECB et al with a No vote. As the Spanish are doing right now with their banking crisis, except they aren’t going to back down and fold their hand. The ECB will finance Spanish Banks directly because that’s what the Spanish want. Unlike Ireland, of course who prefer being the poster boys of Europe.

  3. Philip

    Federalism is the only way to fix this mess. That will take decades to implement. We have only weeks. Europe is going back to 1960s in a hurry.

    • Adam Byrne

      I’m not against that per say Philip, but not under the current knuckle of gangsters.

    • Panic is a sudden sensation of fear which is so strong as to dominate or prevent reason and logical thinking, replacing it with overwhelming feelings of anxiety and frantic agitation consistent with an animalistic fight-or-flight reaction.

      Stay cool Irish brother. Ask yourself one question:
      What would Joey The Lips do in this smoky old poker room.

  4. Adam Byrne

    I am voting NO, thank you very much.

    • Adam. What is this ‘subcribe’ crack.
      I’ve always been scared to ask but reckon many people would like to know

      • Adam Byrne

        About 3 years ago when I first started coming to the site, I tried to ensure that I would receive all the comments for each article to my email address. I signed up and got the new article itself delivered every time but could not configure it to keep sending me the actual replies. I know what I’m doing in terms of IT – I’ve run a few forums myself over the years. I had a back and forth with the webmaster (Ronan at the time, not sure if he still is). I can’t remember the details exactly but we came to the conclusion that it would be best if I just made a comment whenever an article came up and ticked the ‘subscribe to subsequent replies’ box so that I would get all the posts to my email. I know it’s primitive but the webmaster couldn’t see any way around it himself. I don’t always have something to say when a new article goes up so I just put subscribe mostly. I notice some other people do it as well now.

        This site is designed very badly.

  5. pan

    Will also be voting no today…

  6. abutler

    Sorry I thought their is a 24hr pre vote media blackout on referendums and elections, so people can make their own mind up without constant background noise from all sides. Between yourself and Sinn Fein with the looney media attention grabbing last minute high court case does anyone play by the rules anymore!

    I am disappointed with you David.

    • crossroads

      As I understand it, it’s a broadcast media blackout. Politicians can still canvass, just not on regulated radio and TV.

      • abutler

        The article appeared in yesterday’s Independent. The only treaty writeup bar the Shinners court report.

        Either way dropping an anti-treaty email in everyone’s mailbox this morning is totally against the spirit of the legislation.

        In this Internet age what David has done is no different to those in 80′s elections harassing voters as they entered the polling both, surely a man of David’s superior intellect can see the comparison.

        • matthew kelly

          pro yes Politicians are using Facebook today about the issue. i hope you are going to complain to them as well

        • redriversix


          WITH THE GREATEST OF RESPECT…….we have been lied to,Politicians broke election promises,Bankers still receiving massive pay for running Banks in to the ground which we have to bail-out according to Government.440,000 UNEMPLOYED plus those that have left,not including those on “training courses”.9 suicides a week,Families living on fear and not knowing were they stand.Europe in Financial turmoil We have no body looking out for the citizens of this state etc etc etc etc…and your concerned about David printing a Article……!!!!!!

          Abutler……WAKE UP HELLO WAKE UP !!!!

          People are suffering every day now,a lot in silence because of fear,and pride because they are afraid of admitting they made a mistake or a were mislead.!!!

          This is a financial war being perpetrated by banks and their cronies and they want us to bail them out forever
          and you are worried about etiquette.WAKE UP.

          RR6[ VOTED F£$KING NO ! ]

          • molly

            Well said
            This government knows full well that a yes vote is taking a very big risk and yet they still want it passed,if it’s passed and the eu runs out of bail money then they will say they tried ,but in the mean time we will still be hammered,if the no vote wins they will say we will have to have a tougher budget.
            It’s all a big con job,the gap between the haves and the have nots is growing by the day,the way some Irish people are been treated by the polices of this government makes me think wars have been fought for less.

          • abutler

            You think life is rosy on the “NO” side then you need to wake up.

            This idea that Europe in particular Germany is the “big bad wolf” really grates with me.

            This is an Irish mess caused by Irish people and not all Irish people (including the current young generation) are in the S**t is just the boisterous ones in trouble that are shouting loudest have a voice in this forum.

            I among many youngish Irish have no little issue with the current bust then I did not flip properties or make soft money during the boom so have no anger because of this loss.

          • abutler

            And to reinforce my point anyone flipping houses who got burned has reasonable anger. hence I understand the no vote.

            However those on family welfare; the best in Europe in a free council house who moan and are on the NO side really make my blood boil (entitlement merchants). They do not know 3rd world hunger and appreciate the social floor that is under them, they are the reason I could possibly vote NO as a good dose of real austerity and an IMF only program would have them running back to the ESM money for forgiveness.

            The fools lead by those left wing mugs trying to breed rebellion.

          • EMMETTOR

            +1, kept waiting for the punchline from abutler…

        • joe hack

          Is that you, Ray Butler FG TD form Trim, if so we are doomed.

    • hibernian56

      Sorry, but there is no media black out law. It’s an understanding based on the period when we only had one media channel, RTE.

      It’s purely voluntary, and David is also not mainstream media, its his opinion. For the time being we are still entitled to opinions. Every opinion counts, especially when we have been facing a one sided highly financed (By us, the citizen) yes vote campaign, largely based on “We need the money, where else will we get the money”

      But we will get money, if our government grew a backbone. We simply need to stop handing our money over to the banks as soon as they “lend” it to us. FG are literally the worst type of “Yes Men” ever.

      Take the blinkers off. Question everything your nobel Government tells you, they have lied before.

      • abutler

        Considering David has 3 weekly newspaper columns in Ireland that I know about. Several serialised TV series globally resold outside Ireland, books on the back of that, plus appears as a panelist on several channels…he is mainstream media PERIOD.

        Plus he gave birth to the famous blanket bank guarantee; John Gormley explicitly called it the McWilliams’ solution.

        The days of a single weekly article in the Sunday Business Post were his outside mainstream days. Morgan Kelly is probably where David was 15 years ago and I would consider him an economic commentator outside mainstream media.

        The whole idea of the excellent legislation with no media intrusion in anyone’s though process; it gives everyone time to reflect on their own. So I stand over my original statements on the matter and my critique of the timing of yesterday’s article.

        • Tony

          The “excellent legislation” you refer to is a tv and radio broadcast blackout as has been stated at least twice above. The legislation doesn’t extend past licensed broadcasting. Newspapers aren’t broadcasters. Neither is WordPress. Publishers maybe, but not broadcasters. Get over it.

        • joe hack

          It is not legislation and nor have any rules have been broken, it is an undemocratic rule imposed on all of us. You are entitled to an opinion but you are here on this site when your moratorium is in place and you came in search of information in relation this fiscal compact, you appear are contradicting yourself and your moratorium that you should impose on yourself stop going on sites that are debating this issue.

        • redriversix

          Do your research AButler,David did NOT give a blessing to the bail-out…………climb down from your Ivory tower were you seem to have feck all to worry about !

          • redriversix

            Btw,John Gormless couldn’t find his ASS WITH TWO HANDS AND A FLASHLAMP….!

          • Hey RR6. Gormless could not find his manhood with a davy lamp, a pair of tweesers and a large magnifying glass

          • molly

            Do some one mention the green party ,could somebody tell me who’s the green party are they well known,do they hold there meetings in a telephone box.

          • @Molly

            The greens hold regular meeting in a telephone box on Blasket Island if you are interested

          • abutler

            David squirmed out of his bank guarantee with the line that it was not “the Swedish model”. He can NEVER walk away from his responsibility in this regard regardless of the fancy footwork’s he engaged in post the bank guarantee.

            When Sweden done a NAMA job they were a single country in recession unfortunately for us the global economy blew up on our guarantee. I could go on…. David NEVER admits when he is wrong and is always looking for the economic silver bullet to solve any current issue when sometimes the boring long winded solution is the one….

          • abutler

            On the day of the bank guarantee I argued on Joe Duffy against such a move. I believe to this day Anglo should have been left fail with 100k paid to each individual depositor (and not a penny more). And everyone else burned no exceptions, I would even have left Seanie and Drumm in charge!

        • molly

          The greens who are they.

        • Dear AButler

          You are right, I do work hard. I can’t see the problem with that. As for the article coming out yesterday, this is something that is scheduled every week automatically. But I take your point.

          As for the guarantee and how it ended up. Why do you blame me for for government policy of the past five years – as its going into its fith year – when you know I was never an advisor, when you know have never once been asked into any government department to advise on anything or to explian how a guarantee might work and how the obvious risks could have been mitigated?

          I have always been smeared by these guys. You do know that when I saw what was happening in Jan 09 only a months after it was in law, I called for the guarantee to be rescinded.

          In response the Minister took out a full page op-ed against me – something that has never been done before where a Minister of Finance writes against an economist.

          If you want evidence about what actually transpired and how my views on how the guarantee was supposed to work differed from the Minister and his advisors, look no further thsn below.

          If you chose to ignore this, what can I say?

          How can the one guy who did more than anyone else in irish public life to warn people about the housing market and banking stupidity from 2000 to 2008 now be uniquely responsible when he has never been an advisor/civil servant/politician?

          And re Morgan K, who is a wonderful economist and good company, he gets paid by UCD, I work outside the universities, making a living as best I can.

          All the best David

          • michaelcoughlan


            Mr AButler also forgot to point out that the government only executed one half of your proposed solution which is they guaranteed the banks to create breathing space and then should of wound them down but now are committed to keeping them going in perpetuity. I cant believe that the citzenry are so blind.

            Just for the record my uncle is 86. He remembers a time in the forties when Irishmen had to sign on at a Garda station because the republic was in serious jeopardy of failing as so many people were leaving. Many were joining the British army during WW2 and when they came home were excluded from public life for “abandoning” Ireland. Indeed. Sinn Fein will continue to rise, delighted with the fact that so many of the sons and daughters of the working and middles classes are going into exile as this is where their threat to power will come from and what then? Do a Cuba on it and prevent people from leaving?

            We are beyond the point of worrying about the country. We must now act to save our children.

          • joe hack

            with a little reference to the above link and your article which the late Brian Lenihan refers to, if we were to hypothetically assume the yes vote was a good outcome and that the German economy continues as is, will we be better informed as to how bad the Euro banks are in ours and others countries and again hypothetically, is this possibly what the Germans want to know before they commit to changes in their policies. Also could this be what is at play in the minds of the Germans and others, and again hypothetical assuming the Germans are been honourable and also that their banks are in order too.

            In short are the Germans and others trying to flush out the bad banks of those that are been economists’ with the truth considering that economies are based on confidence? and that the only way the ECB can know what is happing in a countries central bank and banks is when country has to call in the ECB and/or IMF and is this not part of the reason why the ESM is been set up, so that the ESM will be able to look at the balance sheets of central banks and banks and by doing so confidences may return?
            Hope you get the gist of this quiz, phew!

            Real person,
            Ciarán Joseph Hackett

          • Correction

            Dear Mr, Mrs or Miss A. B Utler

        • joe hack

          Is that you, man up Ray Butler FG TD form Trim, if so we are doomed

    • joe hack

      There is no moratorium on websites- if only the present government were as gutsy as SF- rules don’t make good decisions. The moratorium rules are not legally binding it is an undemocratic agreement by BAI who have imposed on it all of us and personal I believe it is a bad rule. If some people need moratoriums they can impose them on themselves so maybe you could stop reading this. It not never 24 hours it was 12am on the day bfore a vote but RTE for the most part continues the previous rules it is from now from 2PM the day before a vote

    • I read your posts and didn’t recognise the name. You sound like someone who is not at all happy. Not that many of us are these days such is the long term effects of the shock treatment but some of us insist on finding that couple of hours each day where we disappear into whatever world makes us happy. Sarcasm, satire and cartoons are my thing now and they keep me laughing and seeing througth the madness. I am not funny but I would like to be. It’s the best way to stay sane. Ask Stewart Lee

      I was wondering if you were employed as a butler. Then I wondered if your real name is perhaps A.B Utler. Mr or Mrs or maybe Master or even Ms A.B Utler

      I like your attitude even though I think some of your points are ill thought out and off the cuff but you have the potential to persuade if you polish up on the old communication skills. We need people who are articulate, as we have a lack of class in this joint and are always looking for new recruits to the fratenrity and esteemed fan club of Mr McWilliams. They don’t just let any riff raff in here you understand. It does not cost money to join and respect and friendship is earned by putting in a shift and penning your thoughts with precision and pleny of bang. Capiche?

      Right now you are as about coherent as a drunken saaaaylor (Bobby Darin) but I know you are capable of more. How much more remains to be seen

      If you lose the right wing slant and show more empathy you might go far. One day you may even meet the great man hisself

      I have a guy who knows a guy who has spare tickets to the hottest show in Ireland

      Good luck and Don’t Look Back in Anger

    • fecks11

      @abutler, Instead of being “disappointed” why don’t you educate yourself and the rationale behind the broadcasting ban (the clue is , we only had on TV channel at the time)and get to grips with the fact that this ban is not governed by law but rather by TV channels having some sort of gentleman’s agreement.Social media has no part of the old boys network and as such does not have to “play by the rules” which were never rules to begin with.

    • Dear A B B B Butler

      You are young and angry. Understandable. We were all young and idealistic at one time

      What is the soluton?

      Do you have the answer?

  7. michaelcoughlan

    Me too voting no.

    I am a dedicated fan of McWilliams and in all of the years I have been following him this has to be the definitive article. McWilliams in this article proposes that the people exercise leadership and demand it from our politicians. Leadership is the taking responsibility for our own actions and destiny. In s time of crises true patriots take the hard options. Politicians take the easy options. Remember JFK stated that America chose to go to the moon not because it was easy but because it was hard. JFK helped to extend freedom to millions of Africsn Americans noh because it was easy but because it was hard. JFK’s immediate family gave the lives of three sons serving America JFK, his older brother in WW2, and his younger brother some years after JFK not because it was easy but because it was hard. Michael Collins, Cathal Brugha etc gave their lives for Ireland not because it was easy but because it was hard. If we love our kids We must take this hard option and vote no not because it is easy but because it is hard.

    No matter what happens now McWilliams when people come to examine the archive of your publications in the future this article more than any other demonstrated your commitment as patriot to Eire. This article more than other focuses completely on the strategic cause of our trouble and more importantly offers the route to the subsequent solution to our ills. I just hope and pray that this council is not wasted.

    • rebean

      The Govt refuse to take advice from people like David McWilliams. The Europeans dont like the advice coming from these economists. There is too much money to be written off. Does anyone really believe that its not about the money ? Its always about the money !

    • I like the sentiments but you are you not laying it on a bit thick? I agree that Mr McWilliams is doing a good job

      To compare him with JFK and the men in the rising is surely stretching it

      The Kennedys were scandal merchants and it could be argued that Collins was a murdering bastard

      Mr McWilliams is nothing like these people

      Dry your eyes Michael. For god sake man

  8. osg

    David, I agree with your argument in this article, however my worry is the present government, as with the previous administration, have not and will not stand up to the ECB / Troika / Germans etc and do what you suggest.
    I think we should vote no and begin to bargain as you suggest and stand up to these bullies but if a note vote is carried I think we’ll be voting again in Sept and keep voting until there is a yes vote, ala Lisbon.
    The government is spineless and afraid of the aforementioned ECB etc and that will not change.

  9. rebean

    I agree with you analysis David but I think its probably too late in the process now. The time for burning bondholders was three years ago. We had more leverage then. Surely to God the Germans know we will never pay back all the debt. Do they honestly think we can pay back the 300 billion we owe with interest? I cannot believe that these leaders of Europe are so weak in themselves. The kick the can down the road mentality is alive and well. They all travel to Brussels, get wined and dined , arrive in their plush cars, sit around shaking hands and waffling on about debt restructuring. They get up and read out a prepared speech. Everyone claps and they all go home thinking that everything is going to be grand. Well its not going to be grand and as many economists have commented the numbers are getting bigger, real big. The debt is not managable, you know it, I know it and I think they know it but they are hoping if they ignore it long enough it might go away.

  10. We’re seeing further economic declines in periphery countries with Spain heading towards a massive bailout. The periphery countries are inevitably suffer from the same symptoms of asset deflation and sharp GNP contraction. The illness was caused by being force-fed credit in an attempt to grow an economically powerful eurozone. The periphery countries are the foie-gras geese of europe. This has been a failed experiment. European share of world production has actually fallen over the past decade to Asian competitors. Rather than global competitiveness, our collective enterprise was focussed on products and services which are reliant on buoyant economies and reckless lending. Italy and Spain are economically precarious with the same structural problems that exist in Ireland and Greece but multiplied. Without a change of policy towards debt forgiveness and QE stimulus they will tip over a precipice of debt+deficits and need bailouts of a scale that was inconceivable in 2008. This latter events would change everything. It would either destroy the Eurozone or require a major change of policy. Can we really envisage a Europe where an 80 million strong population in Germany imposes austerity on >130M people in the periphery with no disturbing socio-political consequences? It’s misguided in the extreme. Also, other eurozone countries, apart from the hostages Greece, are adopting a wait & see approach on the ratification of this treaty. We can hammer a nail in its coffin today by voting No.
    The Eurocracy that want us to vote yes are misguided ideologues with failed policies. Worse than all that, they are prepared to subvert the democratic process permanently to achieve their aims. To use the terminology of ideologue and preeminent eurocrat Peter Mandleson this is “the largest measure of sovereignty that European leaders have so far contemplated collectivising”. A horrifying prospect made sinister by the economic gun they’ve put to the head of the periphery to force that collectivisation.

  11. Lord Jimbo

    As we have seen in Zimbabwe, hyperinflation alone hasn’t been enough to force a leader from office while in the case of 1920s/19330s Germany, as in the Euro Zone today, situations normally change as a result of a myriad of issues rather than any single event or cause. The 1920s laid the foundations for Hitler coming to power which was a period characterised by economic instability, social chaos and political ineptitude, which the Nazis capitalised on. The problems with the Weimar Republic, the ludicrous Versailles Treaty, the massive financial repayments and yes, hyperinflation all played their role. The problems that were already there intensified enormously after the Stock Market crash (1929), which was akin to throwing petrol on a bonfire.

    In Germany, unemployment rose from 8.5% to nearly 30% between 1929 and 1932 while industrial production inside Germany dropped roughly 42%. In March 1932 Hitler actually lost the presidential election to Paul Von Hindenburg (Hindenburg to 49% of the vote to Hitler’s 30%) so the situation in Germany was not quite as clear cut politically as many think, Berlin for example has long been considered something of an independent, liberal city, after all Hitler launched his 1928 coup not in the capital but in Munich.

    The July 1932 election gave the Nazi party 230 seats while they lost seats in the following election in November 1932 (down to 196 seats). It was on 30 January 1933 that Hitler finally got the crucial political role (the number of elections in a short period indicates just how chaotic that period was).

    Hitler was invited in by men who thought they could control him, by politicians, bankers and industrialists with the officer class looking on expectantly as Hitler had promised to return their status and power. Then the Reichstag mysteriously caught fire (27 February 1933) all of which Hitler used to justify his Reichstag Fire Decree which suspended various civil liberties, and this was followed in March by the Enabling Act, in which the parliament gave Hitler administration legislative powers. Hindenburg died on 2 August 1934 after which Hitler declared the office of President vacant and made himself head of state and later head of the armed forces — game, set, match.

  12. CorkPlasticPaddy

    I shall also be voting NO today. If this Treaty ends up being ratified then you can kiss goodbye to any kind of recovery taking place in this country.
    All FG/LAB and FF want is to maintain the status quo in the EU and as you can see all that maintaining the status quo does is get you even further into the mire. The bodholders and the banks should have been told where to go back in 2008, but of course our government at the time made a complete hames of things and now we have the ‘Altar Boy’ who was a minister in that government shouting as loud as our government for a yes vote. Why is that? The answer to that particular question is fairly obvious in that he just wants to maintain the status quo like before. FF and those has beens the ‘Greens’ buggered up this country and now FG/Lab are doing exactly the same. A resounding NO vote is the only way to tell these people where to go. Personally, I feel that if the Treaty ends up being defeated they’ll just carry on as before, because they simply haven’t got a clue how to run this country!!

  13. DarraghD

    This treaty will be comfortably carried because we have too many teachers, civil servants, farmers & other “yes men” plebs, who simply have a personal vested interest in this country borrowing way beyond its means and handing the beleaguered and largely unrepresented private sector worker, the bill for Celtic Tiger salary arrangements, all held in place by a rediculous Croke Park Agreement. This state is beyond repair, because people cannot see further than their personal narrow interests, time and time again.

    • hibernian56

      I wouldn’t count on Farmers (I’m not a farmer), but plenty I know are voting against the treaty.

      But we are facing a classic them and us scenario. Especially when you have small business being brainwashed by the likes of Chambers Ireland et al.

      We will get nowhere until we deal with the debt issue and the unconstitutional methods used by the previous and present government to repay their masters in the banking sector.

  14. Puschkin the Black and White Cat

    Hello All

    I reported some time ago that “we” a small group of interested people in Skerries decided to research the treaty over a period of about 4 moths. We met every Friday evening and swapped the results of our research. We then canvassed about 500 homes in the Skerries area for a NO. Should this treaty be a “yes” we will feel no guilt as we did all we could to fight the darkening of our skies with the veil of stupid fascist thinking.

    I hope it’s a “No”, but who knows. They threatened the unprepared citizen with everything except that “yes” would ward of an imminent asteroid impact.

    To finish I can only recall the words of an excellent song released by the Manic Street Preachers in 1998. “If You Tolerate This Your Children Will be next “


    • joe hack

      good work and thank you

    • redriversix

      Well done Puschkin.Thank you

    • molly

      If you tolerate this then your children will be next yes very true but don’t forget ,it’s our duty to fight for our well beening ,if our living is hampered it affects how we provide for our family’s and our family’s family’s .
      There’s a lot of familys out on a lim because they tried to do right by there family,FF,FG,LAB have a lot to answer thanks for the foot work and the time in doing the right thing (that’s the way forward)


      Happily, here in Dublin NW, along with another couple of Dublin constituencies and Donegal, we rejected the Fiscal Union. Spurious as this might be, it does show how close the whole thing was. 955,091 Yes to 629,088 No. Hardly a resounding victory, given the scare tactics, the fact that almost our entire “political class” backed it, the complexity of the treaty and, as Darragh pointed out, the number of guaranteed yes votes in the Public Service. This is even more important when you remember that our referendum was the only democratic exercise on this Union in the whole of Europe. Given all I’ve listed here, the Yes campaign was an abject failure.

  15. clodola

    If we vote Yes, more integration with the EU will result in an attack on corporation tax; Further integration means standard policies across the whole of Europe, we are getting to a stage we cannot choose what policies we like and what we don’t, we are either in or out; Let’s face it our Government is folding by the EU’s hand of the ESM. If we say NO and the treaty passes we do not have access to the ESM but in 2014 it is in the interest of the EU to not let Ireland bring down the Euro! A NO vote will send a message to the EU, we will not take any T&C’s and be made move in synchronization of the strings of the Puppet master! , We can call the EU’s bluff and negotiate more favorable terms. The best outcome is the Treaty does not get ratified, the treaty needs 12/17 EU countries Votes to Pass! Its time for Ireland to stand up for whats best for us and not cowar away as an outcast!

    • cooldude

      I will be voting NO later on today. Like DarraghD I suspect the entirely selfish Croke Park crowd will all vote Yes in order to keep all their perks and ridiculous entitlements. David is 100% correct in that the formerly private bank debt must be off loaded off the backs of the citizens of this state and future generations. We must fight back against this banker led road to more and more centralization and loss of sovereignty and national democracy. This is not so much Germany against the periphery rather it is the Goldman Sach’s technocrats and beaurocrats against the sovereign nations of Europe.

      • clodola

        Like! –Goldman Sach’s technocrats and beaurocrats against the sovereign nations of Europe

        100% correct in that the formerly private bank debt must be off loaded off the backs of the citizens of this state and future generations

      • DaveDouglas

        We foolishly played our full hand in relation to the bank debt back in 08 and with the IMF/ECB. We are dependant on others now to get something in this respect. Voting no won’t get us a write off of this.

        • Carlo

          I full agree we played our hand the minute the Irish Goverment state backed the Irish Banks without a full analysis of the deficit (more importatnly a Full disclosure of the extent of the banks books by the bankers) is the day we signed away our country; At this stage we are so far in bed with the EU our pants are down and we are gettting straddled in the fetile position. But Voting NO will gives us some back bone!

          • DaveDouglas

            I believe the only way we will get anything from these issues is by staying inside the game. There’s alot of “if’s” here and I acknowledge that, if there is a growth pact, if there is federalisation of bank debt, if there is ECM funding. If the yes side are right, we need to be inside, not marginalised.

            However I accept, that if you don’t believe that any of those things will ever come to pass and benefit Ireland, and you believe that the euro is gone, for us in one way or another no matter what, then voting no is logical, then there’s nothing more to lose.

          • Tony

            But don’t forget that even as the state of those banks became obvious the guarantee wasn’t dropped. There have been several opportunities to let it go, but the spineless ones in Kildare St. need to be seen to be doing what they tell us they believe is right.

  16. Ronan Dunne

    “Armed with a No Vote”. This is the only aspect we have a say in. We don’t have a government that is willing or has the “minerals”(to you a quote from a famous film) to deal with the explosion of a default. The other Euro members will be to busy fighting their own fires to worry about little auld Eire with 2 % of the popoulation and will move on with out us and we will be the bottom of the pile for every scrape that happens in the furture. Surely there must be an option of doing everything that you say David but “Armed with a yes vote”! Help me OB1 your our only hope!

  17. ShaneH

    I am bemused by this article and have only quickly browsed through some of the titles of your recent articles. Both the titles and the content of this article clearly imply, that in your opinion the people of Ireland should be returning a No vote to our Political puppets and their EU masters.

    I briefly heard you on RTE radio 1 on Sunday past, and you were clearly sitting on the fence. Maybe you where in awe of McCarthy?

    If you truly believe that a No note is the best way to go, then why the hell did you not publically come out and campaign for a No vote weeks ago when it could have made a difference? We have know the content of the treaty for months and I am totally at a loss to understand why someone in your position, who obviously is in a position of influence, would not have the moral conviction and conscious to publically come out and campaign for what you believe in.


    • clodola

      We do lack an independent mediator to give us the facts on what our options are; Political parties just take cheap shots to get one up on another.

      As you said Shane the Treaty is out some months but everytime I turn on the TV (Prime Time, Vicent Browne) why does each person(Even amongst the Same Party members) have differnt facts and Figures!!! Are Irish politicans that illteriate or just plain stupid they cannot comprehend the same Document!

    • Lord Fraud

      Totally agree with Shane.

      I’m astounded that you of all people David, with your track record of calling this whole clusterf**k correctly since the outset, has literally remained on the fence. I’m sure that you would have made a measurable difference, at least to the factual standard of the debate, had you chosen to air your views and join the debate. And David, don’t think for a minute you are neutral when your sitting on the fence.

      On another point, this referendum is the start of a subtle realignment in the body politic as FG and FF move ever closer with a view to keeping they’re snouts in the trough. Come the next election we’ll be seeing an FG/FF coalition of the moribund. YHIHF.

    • joe hack

      Yes he does sit on the fence and agree with all you have said.

      Here is a question if he said he left wing or was a Sinn Fein supporter would he be writing for the Independent or you can the reverse that.

      If he had said it much early and much clearer that we should vote No and our country went into a much worse recession his livelihood and reputation a as a broadcaster may end.
      But this is best article I have seen from him and it was published just yesterday and is fresh in the minds on those who read the Independent as they vote.

      Tomorrow I may not agree with what he has to say, the day after I may agree, but today I say on well done for getting that article published into a major newspaper.

      But it is getting time now that he is established as a broadcaster to show his colours what does Mr. McWilliams believe in?
      Is he a broadcaster is or is political activist if so does he have to tell us?

      • I think you should all give the man a break. It does not matter what a man thinks privately

        The articles are educational and his writing has inspired many laypeople to take an interest in economics. That is not easy and to do it every day for over ten years takes hard work. Lots of it

        Far more useful would be to expose the reporting in the MSM and examine how some of those bluffers are earning their paychecks and who is cutting their checks and why

  18. John Q. Public

    The young who matter to the country don’t get a chance to vote because they are all in Australia. The demographic left behind will push the balance to a yes vote which will keep us in shit creek with Enda and Co. for years to come.

  19. Some constructive criticism David….
    Your points as always are accurate in my opinion but your metaphors and examples are growing dated:
    -Josey Wales?
    -Your Boston experience.

    As a regular reader they are now dated and overused.
    Might be time to freshen things up.

    • This is not constructive criticism at all

      If it were then you would provide examples and offer alternatives

      If you did that and proved your case then I would doff my cap and say the criticism had been contructive and valuable

      • EMMETTOR

        True, it depends on whether one wants to communicate clearly or entertain. The Josey Wales “pissing down your back” example surely does both, therefore can’t be faulted. Metaphors date very, very slowly, if at all, joff23.

  20. mediator

    I too will be voting No and for the record I am a public servant (I was also against the Croke Park agreement but not for the reasons cooldude might suppose – pay cuts are coming to the public sector irrespective and I didn’t want to go along with losing conditions of work built up over decades)

    Tough times ahead no matter what. Time for us to become a better people than we’ve been since independence or take the consequences.

    I fully expect the majority of Irish people to vote yes as they’ve done ultimately in every prior referendum – they’ve been dumbed down, bought off and threatened into compliance over the past 30 years.

    This has brought us further into the embrace of the de facto communist state that is being brought into being – the EU

    Government now makes up over 60%+ of this economy when you look at the details – this includes many so called business people and the so called private sector.

    Where would the big 4 accounting firms be without government contracts?


    Doctors? without medical card payments

    Legal firms?

    Pharma? without inflated HSE payments

    Pharmacist? – don’t make me laugh

    Farmers? without subsidies and other payments
    (makes me laugh to hear farmers giving out about public servants since they’re almost as much dependent on government derived handouts)

    From here on in its accelerated integration

    EU commission ala politburo

    EU and national parliaments – rubber stamp affairs

    Government by dictat otherwise known as EU directives

    If it looks like a duck etc…

      • rebean

        You are in the public service but you dont support Croke Park. Thats really interesting. In any case there should not be pay cuts for all the public sector. Its the people on over 50000 that need to be examined. Therein lies the problem. In a bankrupt country the highest salary paid should be 100000 for a surgeon maybe. The higher paid are hiding behind the ordinary workers. What about the ESB with their salaries. Oh sorry there semistate. Does anyone really know the difference. Is it case we are semistate when it suits us and if things get hairy we are suddenly public sector workers. Everyone in Ireland can pay their inflated ESB bills so we can pay 80000 to an electrician.We need a Margret Thatcher type leader to bring Ireland into the real world

    • I’m public sector contractor (part time anyway). I voted no. I did so as I do not want to live in a state undemocratically run by unelected officials in Brussels. Where our budgets are decided on the pages of Bild. It’s clear from the last election that it was largely irrelevant which side we voted for as whoever was elected would be overcome by the fear and threats associated with the banking debt. The only way to overcome that fear is to face it, default and perhaps leave the Eurozone if that’s the option forced on us.
      I’d rather lose my job and start again in a free country which took an ideological stand than work as a rat in a country that surrendered its sovereignty with a whimper.
      And also, I work more hours in 3 days than many public sector colleagues do in a full week. There are far too many passengers in the public sector, real unfairness in promotions and a pettiness that will only be resolved by a cut in numbers, specifically of upper-mid level administrative staff who are still on frankly outrageous salaries, receive increments and do jobs with nebulous descriptions.
      As for the PS unions, they care not a shit about PS contractors, instead favouring protectionist policies for their most enthusiastically clock-watching members. The Croke Park agreement is their design and an impediment towards true PS reform.

      • EMMETTOR

        +1 It’s ironic that Mongo Hogan’s department is stuffed to the gills with people on 60-100 grand PA, ticking boxes and giving out cash to all sorts of quangos. Then try to deal with the covens of witches who run many Departments and have actual power to affect people’s lives. It’s difficult on a personal basis as I have many friends and relatives who are public servants, but in reality, these people are being paid top dollar for shoddy, half-arsed work. The fact that they know no better, having joined from school after the leaving, or even before, is a reason but not an excuse. Recently when I pointed out that the form one of them claimed I’d filled out hadn’t been signed by me, they responded “Yeah, well you should have signed it”

  21. joe hack

    Form David above, actual today after reading the above I will call you Mr. McWilliams but only for today…
    “Mightn’t it be better to open the negotiations properly now?”
    YES unquestionable without a doubt and finally Gilmore might get the arousal he badly needs but he will have to be careful as we know what Clint Eastwood (Angela Merkel maybe) does when he sees a man with hard on.

    Our headless chicken government needs to be told what to do by us and today might be the only chance we get to give them the hard on they need.
    No government in Europe who claims to be a democracy will want to be seen going against the only people who are getting a chance to vote on this issue.

    There are problem with your some of your points, Sinn Fein have argued that there would be money if we Vote No – If the present weak government continued to stick with the policies they are following now-even if they did follow your suggested augment of heading to the ECB with a No Vote in their pockets- this weak government may come back from the ECB with money for the Banks and Bondholders and put you, me and all of us further into debt even if they got a lower interest rate they may even use it buy the next election????

    Politics is at play here, Generals in battle sometimes send in fearless gutsy young can do soldiers (fools maybe) in to dangerous situations with results.
    We don’t have that now, our government needs it, and it may come with, dare I say it, with a Sinn Fein and Fine Gael coalition, what a clash of histories that would be, Adams and Kenny sending Noonan and Doherty off the ECB on Monday or are we too weak and conservative here in Ireland?

    We have no choice but to Vote No, our politicians need us to lead them we need them to take responsibility, we the Irish need to take responsibility for our governments actions we need to vote NO if we don’t we will be in debt till death comes on us, the voters.

    Those that are too young to vote now will ask who were these greedy people who looked after their short term interest and left us with the pain, it is selfish and greedy to not Vote NO.

    • Some of the young already hate the movers and shakers from the Tiger era. They are angry and feel that their future has been stolen before they even got out of the starting blocks

      I’ve stated before that the young people of Ireland will end up hating their parents for their selfishness and stupidity

  22. Adelaide

    A high turn out = “Yes” majority
    A low turn out = “No” majority

    I believe a “Yes” vote will divide and conquer the Irish people, as it legally enshrines the schism between the publicly and privately employed, the ‘insiders’ and ‘outsiders’.

    It’s a “Yes” for me and a “No” to you when it comes to the borrowed goodies.

    It will polarize this country as the sham of “Sharing The Pain” is exposed by the me-me-me status-quo-on-the-pig’s-back brigade who may be numrous enough to win today’s vote. All future discussions will be futile.

    The losing “No” vote brigade may as well emigrate because their fellow compatriots have told them in no uncertain terms that there is nothing for them here as they grow fat on borrowed cakes. Yum yum yum all the way to bankruptcy, thank you very much, pick up the tab, will you, like a nice fellow.

    • coldblow

      Since the foundation of the state (and well before it) there has been a division in Ireland between the propertied and the propertyless, the haves and the have nots, the insiders and the outsiders. That was Crotty’s argument (and others’ too no doubt) and the state enforced it. The outsiders emigrated.

      • Adelaide

        Media reports extremely low turnout. Hurray!

        Can Ireland’s bad weather save the country? Tune in tomorrow for the concluding episode!

      • rebean

        Thats very true. The yum yum bunch will be voting Yes so that there will be plenty of borrowed goodies into the future or until the ECB say NO MORE GOODIES for anyone . In that case the insiders will raise taxes so they can pay themselves more and the sorry saga will continue

    • Adam Byrne


  23. sean ban

    I was never good at maths in school and not very academic,and David is the only economist that doesnt give me a pain in me head.
    Maybe its something to do with the fact hes the only one making sense,I never loose track of his explanations of whats going on,and am 100% confident in voting NO.

  24. realist

    This is laughable.. the implication that a yes vote would pave the way for hitler was particularly amusing. The tag line on this website says “Economist, Author, Broadcaster”.. It should read “Self Aggrandising Media Hound”.. McWilliams lost his credibility as an economist years ago, his sole interest is to raise his personal profile by being provocative.

    A no vote won’t have a negative impact for him.. he’s happily sheltered from any financial consequences by the significant income from his true careers in “writing” and “broadcasting”..

    This treaty is happening.. with or without us.. anyone who thinks a no would put us in a position to bargain is delusional. All a no will do is further de-stabilise the country and the Eurozone..

    “Armed with this, we could go to the ECB and say, with a No vote, we know that we will default because the ESM isn’t open to us. We will start this process right now by not paying a cent extra to unsecured bondholders. We will not pay money due next month, and you can help us all figure out what to do next.”

    If we vote no, we will be denied access to the ESM fund for the very bailout McWilliams admits is inevitable.. McWilliams and his ilk argue that we are too important to the Euro to be allowed to default.. that the other members of the Eurozone will cave in the face of our resolve.. what a load of nonsense.. the arrogance is simply breathtaking ! Do you reward a spoilt child every time it throws a tantrum ?

    We are a bankrupt rinky-dink little island on the fringe of Europe.. a genuine no would be a minor speed bump to the rest of the Eurozone and a complete roadblock to us. This country cannot fund itself.. we would be forced to go to the IMF cap in hand for funding. The terms and interest the IMF would insist on would make the current “Austerity” look like a walk in the park.

    But that won’t happen because ultimately this country will have to vote yes.. we cannot survive without ESM funding in 2014.. it’s that simple. We either vote yes now, or we damage our economy and prospects of recovery further with a no vote and ultimately go back to Europe much chastened, a little wiser, and a lot less arrogant.

    Ultimately all a no vote means is that we would have to fund yet another referendum to correct the mistake.

    • sean ban

      The argument against is is one against austerity ,against funds been available to bail out bondholders,and our sovernty.
      In regard to austerity Davids point is ,it isnt working it wont work and it never has worked,in regard to the bondholders I think its akin to asking one credit card company for money to pay off another ,for money that was never promised or guaranteed in the first place,and in regard to sovernty,well as big Ian would say never never never( unless of course theres something in it for me like a write off of debt).
      Its time to call there bluff !

      • realist

        Say a no vote is an argument against austerity.. But you have no concept of how bad the Austerity will get if we vote no… Without the cheap loans and damping effect of the ESM we will have to go to the IMF for money to fund our infrastructure and basic services..
        They will lend us the cash, but only when/if we agree to their higher interest rates and austerity requirements and their measures will be infinitely worse. Have a look at the terms they have imposed on other countries which they bailed out in the past.. then decide whether you think you would be better off without the ESM..

        It’s not a bluff.. we’re broke.. we can’t survive without them.. we screwed the pooch with greed arrogance and corruption..

        • joe hack

          Yes it is, I don’t own any bank any money,

          but our government is putting me and my children into debt to pay off personnel debts of others (the greatest bank job ever, the greatest moral hazard ever) not our states debts they are doing it with money they are borrowing at high interest rates i was not ask, i did not ask them to, they are stealing from me maybe you are real Banker who is happy to steel form a child

          Get Real -if you have money, go pay the bank debts yourself don’t ask me to pay for greed of others life style there mercs and perks, how dare you steel from me a real person

        • sean ban

          Your right I have no idea how bad the austerity will get if we vote no.So what happens if I vote yes.Maybe its like asking how long is a piece of string.
          Maybe its a question of who you believe or who you trust.But this much I do know.Iceland didnt pay the bondholders and are now in recovery,the IMF allowed them to borrow and their world didnt fall apart.Iceland is not part of the Euro ,but it doesnt stop us from putting this argument forward.
          Do I believe the banks ? they said they owed something like 3 billion initially ,last count I think it was 60 billion that was pumped in to keep them going,and they still wont loan to small business.
          Then we have the minister for transport and Telegraph Poles Mr Vodkar,shelving the Metro North saying we cannot afford,the 3.5 billion.
          If ever we needed someone like Charley(for all his faults) someone with a bit of vision and steel its now.

    • Tony

      realist, you obviously seem to think that we are in a better situation than we actually are. Have a look at BBC’s Web of Debt and see which little rinky-dink bankrupt country on the fringe of Europe has the largest per Capita foreign debt.
      Hint: it ain’t Greece.
      The EU can’t afford to leave us swinging in the wind.

    • Dear Mr Realist,

      Who exactly have I lost credibility with? Or more to the point with whom did I originally have credibility? And tell me why that has fallen away because the interesting thing is I have always been writing. So at what stage did the writing go from being credible to incredible?

      All the best and welcome to the real world.

      And you might start being rea,l Mister Realist, by giving your real name and not hiding behind some adolescent moniker.


      • Many people hide behind monikers

        Serious lack of confidence and integrity I think

        • Lord Jimbo

          There are very good reasons why people use monikers names, I don’t support personal insults or ad hominems however, there is enough to be dealing with in the issues, I would rather debate the points made/raised, far more interesting.

          • Name some of these good reasons

          • bonbon

            Pen names are an old way. And today identity theft is big business.

            But I must admit I have a slight problem with “Lord Jimbo”, funny as a pen name is. To address a reply – must one courtesy? No offence meant ;-)

            Better to hand out bonbon’s as Alice did at the Caucus Race…

        • Fair point about identity theft Bonbon but it takes more than getting hold of someone’s real name

        • coldblow

          No choice but to use a penname. My org’s ICT rules clearly don’t allow blogging. I know – I helped to write them. Anyway, I don’t see how it matters.

      • Dorothy Jones

        A mentor once helped me with some good advice….NEVER raise to the bait. C’mon, none of us are flavour of the month all of the time, but you have a standing and integrity to ‘rise above’ that…

        …Most posters use ‘pretend’ names don’t they for various reasons? I get grief sometimes for using my own on blogs, but hey….are we [wo] men or mice [ettes]? D

        • BirdCourter

          Dorothy good points as usual. David firstly thank you for interjecting with comments on a regular basis. I read all your articles but rarely if at all have I ever commented. I like that you screen the streams thoroughly post publication and comment only where you feel necessary. I think one would truly be inhabiting an ivory tower were they to continuously utilise social media while at the same time engaging in unrequited dialogue and debate. This is something you have never done and I admire you greatly for this.

          Like Sean Ban I admire your writing style a great deal. I am not an economist but I understand your writings and I imagine it must be a hard thing to write continuously for ten years and to maintain an exceptionally loyal and responsive audience as you have done. You have done this on merit, intellect, humour and originality. While I may not agree with everything you say (who would/should) I do welcome enormously the fact that you don’t just use the brain you possess, you are smart enough to use all you can borrow.

          Apologies also for the moniker but I do value a modicum of privacy and no I am not a plant or a vested interest. I think the fact that I officially joined this fine portal many many months ago but am only commenting now is testament to that. I am behind an Irish born international voluntary movement called Pedagogy Plant however and I have publicly gone on record by stating my admiration for your work and your intellect:

          Keep up the great work.

    • Carlo

      We are stuffed, no argument there, but with a Yes vote you are advocating further integration to Europe, We accept the EU with open arms,yes short term we will have access to the ESM(Never read anywhere it is a Low % interest loan) but long term our policies will be affected (Corporation tax), Multi-nationals pull out, high impact recession. The only niche or glowing beacon for foreign investment is our Low corporation tax, if this is harmonised with the rest of the EU we are truely dependant on the EU for our revenue stream, we have zero Indigenous companies to fall back on for employeement ;if the Mutinationals pull out the knock on affect to the indirect industries(retail shops, restaurants,etc)will cause a Catastrophic ecomonic crash. I think alot of people are getting hung up on the Short game (2014 Armageddon) and not focusing on the long game. No matter what way you look at it the outcome is a high impact recession.

    • rebean

      I guess if we vote no then we really will have to grow up as a nation. You are correct that Europe dont give a toss about us. Would you blame them. What do we have to offer ? Our fishing is gone. I think we have built a few wind farms lately but the Germans wanted to take those.So we are a liability in Europe. It doesnt really matter to the rest of Europe what we do. They would probably hope we vote no so they can offload us. We were better off with Britain economically. All that republican jazz was idealism and romanticism. Maybe we could go back to writing books and dreaming of better times round a pint of Guinness.I wish I could find me damn green card I want to go back to LA

      • Tony Brogan


        May 31, 2012 at 3:41 pm

        I guess if we vote no then we really will have to grow up as a nation.


    • John Q. Public

      you ain’t got a clue my boy.

    • Jimmy R

      “This is laughable.. the implication that a yes vote would pave the way for hitler was particularly amusing.”

      It’s laughable until it happens. Take a look around! Austerity in Greece, violent far right and peaceful far left explode in the election results. Far Right rises massively in the French presidential elections. Sinn Fein rising in the Irish polls…protests in nearly every country having difficulty in Europe etc etc etc.

      Are you laughing realist? It’s funny to you that because of the continued stupidity by politicians and bankers that people feel the need to protest, to march? If you oppress people enough, and back them into a corner, do not be surprised when they come out swinging and take their anger out indiscriminantly.

      David is right, current policies are paving the way for radicals to get into power. We saw in America how the single word “change” got America to vote for a black man with a foreign sounding name ahead of their traditional rich white president. Well what happens when the people get fed up enough and vote somebody in who actually WILL bring about change, but BAD change?

      I don’t think any of us will be laughing then!

    • There are lots of people who see DMW as being an arrogant bugger and I see their point of view

      The tagline says ‘Economist, Author, Broadcaster’ because that is what he does. He is an Economist who writes and broadcasts

      You are in danger of offending the person who advised him to get his shit together and choose that particular tagline. It sure as hell wasn’t him

      • Adam Byrne

        Anyone who has spent time in David’s company would know that he is far from arrogant and is always very courteous and generous with his time, with people from all walks of life. He always has time for a chat and a drink.

        • I’ve never met him and never will. I can only comment on what I feel and what people say. Thanks

        • He always has time for a chat and a drink.

          So what? Show me an Irish man that has not! LOL

        • I will look it up. I envy you having a ticket out of here and wish you all the best. I’d like to leave but am in a poverty trap. Same old story for people up and down the land

          If you have a dream then go for it and never think twice

          • Adam Byrne

            No such thing as a poverty trap here Paul. As you have remarked before, the libraries are open and they are free. There are poverty traps in Africa, Asia, Haiti, etc., and even Dominica, but we here in the pampered West don’t know how lucky we are. There’s no place on Earth we can’t go. Same doesn’t apply to everyone and that’s the tragedy. Until we tear down this edifice of greed that surrounds us nothing will change.

          • Adam poverty is rampant in Ireland and the rest of Europe.
            Not as bad as Mogadishu but it is there all the same.

          • Adam Byrne

            Yeah it is but at least there are ways out. I am smashed broke myself, haven’t got a penny to my name, literally. But that won’t be for long. And I don’t need loads of material shite in the meantime. Even when I do make my dosh it’s to provide for my daughter’s future not to spend on superfluous crap.

          • If you have money coming then it’s fine to say that there are ways out Adam. Me and most of the people I know can’t see a way out. If we could be would be out of here in the morning believe me

          • Adam Byrne

            You could try writing a book Pauldiv, you might make some dosh out of that. I think you’d make a go of it.

          • I’d love to. When I was a child I knew words and pictures were my spark. I liked drawing and creating cartoons and stories. I had ability but was told I had to ‘grow up’

            I went to school and lost my creativity for 30 years but now am regressing back to things that inspire me. This is what I mean when I mention finding a spare hour each day to live in our own bubble and rediscover ourselves. Anyone should be able to do this and not feel guilty about it. It is NORMAL! It’s called Inner Child Therapy and we all like it whether we know it or not

            Sure I’d like to use my degree and pull in 40 – 50k programming down in the smoke and be ‘a real man’ but I refuse to do it. I have a 2.1 degree and am not stupid but I hate chaos, stress and headless chicken management. That is the impression I get and friends tell me that is what it is like in practise so feck that for a game of cops and robbers

            Maybe in a year or two I will have something to say and be able to say it in a unique way. Until then I am happy living a rambling life west of the shannon. It’s a cop out, maybe, but this has been a good life. Poor but great. If I ever get to Lisbon I will write that book. If I ever do it will be full of the best memories I ever had. Ireland is my mother and always will be. I hate the powers that be but the people are magic

            Thank you for the encouragement in your answer. You posted it days ago and I have been thinking about it since

  25. gizzy

    Realist Is it the same realism that has a bailed out State Bank meeting to decide on lending 3.5 billion to restructure a debt taken on by a State owned property holding company to repay an obligation conjured up by the State run Central bank on behalf of a bankrupt State owned former Bank.

    When do you cry stop. This may not be life changing but putting one small word on a ballot paper is one way i can object to this flawed system.

    • realist

      I agree the situation is ludicrous.. the fiasco with the banks and bondholders is insane.. no argument there..

      But we’re stuck with it.. it’s a done deal, and a no vote will simply make things infinitely worse.. there is no light at the end of this tunnel.. but that doesn’t mean we should start trying to pull the roof down on top of ourselves..

      Object all you like.. cry stop all you want.. all you’ll do is delay the inevitable and extend the misery..

      • gizzy

        Point taken but I see it as yes vote will delay inevitable and extend the misery. It is like a battered wife being nice to her husband to stop him hitting her. We all have to be nice to Germany, not raise our voices to make sure she slips us a few bob.

        • DaveDouglas

          Realist I agree but there’s no certainties. There’s no guarantee of stability, no guarantee of euro working itself out, no guarantee of growth. But outside the system, all those things certainly won’t happen.

          To No voters I ask, does saying no just make us, Ireland, have a spine, feel better, but is that it? David Mc Williams, you say this is the start of negotiations. But you also say, Germany is not even aware of the sorts of problems on the periphery yet. They are not at the negotiating table. Can we drive them there?

  26. [...] economist David McWilliams, who predicted the Irish crash, has an interesting analysis of why this treaty is doomed here: People will argue that the Government is just buying time until 2014. This is a fair point and it [...]

    • Bebie

      Interesting article.

      Perhaps some cracks are starting to appear politically with O’Cuiv standing up in FF (but sitting back down again just as quickly – coward) and SF skipping past Labour in the polls. A mainstream Anti-European view may start to solidify in the weeks ahead after this treaty and with the changing views of ECB towards resolving the Spanish banking crisis, and lets not forget the Greeks. Of course this reinforces the view that we are voting far to early but perhaps resentment may start building amonsgt the ordinary folk as a consequence when smug politicans run to brussels as good poster boys (…. I’m not conceding defeat however….)

        • Bebie

          Agreed. It’s not the man I am “admiring” but the fact that someone almost had the courage to stand up for what they believe in – something his grandfather didn’t do either by sending Collins to do his dirty work in London. The sooner that we get defectors and sending shocks through the chamber, the better. Then people might start to protest that E is for Enough, not for Euro or Eejits.

        • rebean

          It looks like you were not educated in the Fine Fail style

        • coldblow

          From what I’ve heard from those who worked closely with him he is a decent man.

          • EMMETTOR

            Yeah, I’ve heard the same about O’Cuiv and think he tried to act as if he lived in a democracy, in fact as if he was a public representative in a democracy. The way he was treated is the important thing in that particular scenario, demonstrating clearly the limits of our “democracy”. Even a TD has no right to say his piece when the orders come from Berlin.

          • They all come across as decent men in public. They would never get elected otherwise. They know not what they do.

  27. Deco

    David, you have been quoted in the London Daily Telegraph.

    People will argue that the Government is just buying time until 2014. This is a fair point and it goes back to the idea of kicking the can down the road in the hope that something will turn up.

    But the metaphor we should be looking at is not kicking a can down any road but rolling a snowball down a hill. The more we roll, the more the ball gains momentum and destructive potential, so that by the time it smashes into reality, the destruction will be much, much worse.


    In most countries the media is almost uniformly pro-EU, to such an extent that Irish people have to go to British newspapers just to read the case against.

    The Irish media have been caught out with a delusional trance in recent years, over the entire property mania. Probably because it was being paid well, to talk it up. The Irish media, especially RTE and The Irish Times (as Eamon Dunphy termed them “Official Ireland”) have been caught with their pants down around their ankles by the entire property prices will go up for ever nonsense.

  28. Deco

    I survived the property mania by being a property sceptic. By refusing to get drawn into the crowd, by the media coverage.

    I survived the ISEQ crash by being a ISEQ sceptic. By refusing to swallow the hype in the IT Business Supplement, or the business news on the radio/the television.

    I intend to survive the EU crisis by not swallowing the stories that the EU knows how to solve this problem. It is clear that does not.

    Regardless of what way a very close vote works today, make sure that you are prepared according to what way things pan out. In six months it will be irrelevant because the current plan from the EU will not be enough. They will want more money, more power, and less accountability. They will not take No for an answer. This is the imperial path. Empire believers refuse to accept No as an answer. Ruin is inevitable, because they simply cannot stop their madness.

    The real insanity is the belief that “more Europe”, and low interest rates will fix it. They are the source of the problems. And the clowns keep pushing them, as the solution. All they are doing is creating more problems.

    It is either default or…..default. the only difference is who will be landed with the default. Prepare accordingly.

    • cooldude

      The EU created this crisis by throwing cheap money at the periphery countries and creating the asset bubbles that always crop up with negative real interest rates and excessive liquidity. Now the only thing that matters is that the insolvent banks must be kept afloat and nobody is allowed default on debt, no matter how fraudulent it is. Most of the money we borrow will be just used to pay back these fraudulent bank loans. Better to stop all this nonsense now and get out of this banker led, corrupt , institution. Voting NO is just the start but we have to start somewhere. I hope it pisses rain this evening and we can scrape through a NO vote.

  29. mediator

    Hi Deco

    Prepare – what do you suggest?

  30. Could this go into the history books as the lowest turnout referendum ever?

    Ignorance is the true source of all suffering.

  31. joe hack

    For those you intend voting No,

    I live opposite a polling station (30mts or so) which I have a constant good view of, it is normally a very busy polling station due to the demographic of the area its not the polling station I vote in I have to walk past it on the way to mine about one kilometre away, I am on the wrong side of the road (born on the wrong side of the track too it just keep biting at me even in little ways).

    So far today I have never seen such a low turnout at this station, of those whom I have seen come and go most of them are well over fifty years of age which is no surprise as most of this polling station demographic is over fifty plus years.

    The opinion polls have suggest that the 55 plus are most likely to vote yes and that a low turnout would favour the No Vote if this all pans out to be so then that suggest that those of you who intend voting No may have a great impact on the outcome of this referendum so please don’t let this opportunity slip.

    Ps don’t tell the yes side this Keep it Country Ha Ha

    If the opinion polls are suggesting that the over 55 are most likely to vote yes could this be a clue as to who might gain most from a pro fiscal compact (pensions investments etc.) and that the mess they leave behind will be dealt with by the young???? what is the average age of the French and Germans???

    It is also most likely that they have investments going back to the mid 1990 are the aged becoming ageist???? Just to let you know I not too far behind them, in years that is.

    In short Go Use your NO VOTE

  32. It was a good article Sir

    Personally I would not take all the abuse for all the Whiskey in Ireland

  33. MjHi

    David I voted no today at 1400 & I listen to the whole debate around this referendum over the months.At the start I had intented on voting no as a protest against politicians in the country & their bahaviour.As the debate continued I suffered a bit of wobble & changed to the yes side as im trying to restart a business I lost in 2010.After some research of my own I changed again & went back to the no camp & then I read some of your comments about what may happen if there is a fiscal union & it made me realise that no is the answer.I am truly frightened for the future.I lost everything in the crash business home health the lot but I dont want to loose my country.I hope we stand up for ourselves we dont do it that often but when we do the results are always in our favour.

  34. wills

    The euro was built on foundations for this crisis to happen.

    The crisis opens up an opportunity for the Insiders to use their Dr.Strangelove solutions and this is what is under way now.


  35. “Polling stations expecting rush as turnout remains low”

    On Google News at 6:49PM

    God they are desperate. Sure Emmerdale is on at 7 then it’s Enders and Corries

    Get Your Minds Right Lads. Cool Hand Luke

  36. joe hack

    Democracy does not exist in the EU Sarkozy was a dictation the people of France voted against Lisbon be he the little Bonaparte passed in spite of a popular vote.
    After the French people rejected the EU constitution in 2005, the president moved the vote to the parliament, which approved it.
    - After coming to power in 2007, President Nicolas Sarkozy decided to opt for a parliamentary ratification to avoid the risk of a second rejected referendum.

    Vote no is a vote to bring democracy back to Ireland

  37. dwalsh

    I’ve given up on the media. You guys here write a lot more sense and provide a lot more real news and information than the entire apparatus of mainstream media. My thanks to you all.

    My hope is that Greece’s Syriza Party and Alexis Tsipras is the beginning of the awakening of the European citizenry. We need to take Europe back from the bankers and their eurocrat operatives.

    We need a democratic and humane civilisation; not a Darwinian free-for-all primeval market where financial mafias and hedge fund pirates are permitted to rob us all blind and destroy our national and global economy.

    I know we are Irish people and concerned for our local circumstances; and rightly so; but we must realised we are up against an organised cartel of financiers and bankers. They are operating transnationally and globally. Their most senior members and their think tanks are thinking and planning at a planetary strategic level; the grand chessboard.

    In reality we are facing a global coup.

    They have usurped our economic and political order; and they are working to usurp our civilisation and social order by enslaving us all through bankruptcy to monetary debt which can never be repaid.

    They don’t want us to repay the monetary debt. After all it is only virtual digital money; not real wealth. They want us to pay with our national resources and our lives. They want the world. They want neo-feudalism and serfs.

    What they are doing is high treason against the human race. Their activities are crimes against humanity. We must not allow them destroy our civilisation and our world through their lust for wealth and power.

  38. joe hack

    ECB warns current euro zone form is ‘unsustainable’

    Updated: 19:16, Thursday, 31 May 2012

    European leaders must act swiftly and decisively to avoid the disintegration of the euro zone, which European Central Bank chief Mario Draghi said is “unsustainable” in its current form.

    • Tony Brogan

      So all the banks are broke and all the bank debts piled on the people and now the solution is bank consolidation to a super European bank.
      so it did not work and now the chaos is used to impose greater banking controls.

      The crisis is caused by the banking system at the behest of the banking families looking for one world government under their control. We are attacked by a a major plan of world dominance. No country is immune.

      central banks must be closed. Individual country sovereignty restored. and individual freedom and integrity enhanced by government.

      We need less government,and no central banking. All odious debt must be repudiated. All people and all nations must be self reliant. All else leads to serfdom and slavery.

      • joe hack

        i like your words

      • EMMETTOR

        Yes, the twin heads of the Banking Industry and Government by Bureaucracy must be hacked off. A move in the direction of an Anarchist’s viewpoint, perhaps. The minimum of government needed to achieve what the people want government to achieve. The minimum of Banking Industry needed to supply banking services to real industry and real people.

  39. CorkPlasticPaddy

    True enough!! Peter Finch’s character was absolutely right. Everyone should now pursue this type of action all over the country and the useless members of this government should face this type of protest from the general citizenry. WE’RE AS MAD AS HELL AND WE’RE NOT GOING TO TAKE ANYMORE!!

    Let’s just hope that there’s a turnout of less than 40 % all over the country?? First it will show Enda and his cohorts in government that we’re sick and tired of being lied to, and secondly it might and I stress it just might make them sit up and take notice of the people of Ireland at last!!

  40. Ricardo

    I voted NO, and everyone I have spoken to on the issue is voting No, and yet the RTE news keeps saying the YES side is increasing. Someting doesn’t add up here!

  41. molly

    unsecured bondholders. Maybe I have this wrong are not most of these payed back.
    Or have I got this wrong.

  42. dwalsh

    I hear our lords and masters are over at the Bilderburg meeting in Chantilly, Virginia, USA.

    I mean Van Rompuy and Trichet; both unelected; and probably many others as well. Goldman Sach’s local man Peter Sutherland will likely be there too.

    The inside word thus far is talk of some kind of global treasury. My bet is and has been since the crisis began that they will eventually (probably not just yet) bring forward plans (plans which were drawn-up some time ago in preparation for this) for a new global central bank; which will oversee continental central banks, and on down to regional central banks.

    Centralised global fiscal hegemony.

    Once the Western nations are hopelessly bankrupted and indebted, they will present their plans as the way to deal with Western sovereign debt — which we all know is not sovereign debt; but private debt generated by fraudulent banking and derivatives.

    It’s a wonderful life!

  43. bonbon

    It is high time to mention Brüning. Berlin seems hell bent, at least Merkel, repeating the mistake.

    But a few critical points –

    1) 1923 saw Weimar hyperinflation because of unpayable Versailles debt. Germany well remembers that make no mistake.
    2) Austerity after 1929 was the fatal blow to the nation. Joblessness and apathy paved the way for Hitler, whose NSDAP election was funded directly by granpa Prescott Bush and Montague Norman of the Bank of England. Hjalmar Schacht, the Austerity role model, became Economics Minister after leaving the BIS – the Versailles Debt Collector Bank in Basel.
    3) At Nürnberg, the incriminating evidence used by Dr. Alexander against the accused, was Aktion T4, the health austerity euthanasia program which opened the door to the Holocaust.

    Now in 1931 TWO plans were put before Berlin, Lautenback and the WTB Plan, to reconstruct Germany, refused by “pragmatic” politicians. This meant an New Deal program that FDR started and a bank regulation.

    Today, exactly the same. Versailles II, austerity, and plans on the table for massive development, with bank breakup. And Brüning’s , all practical gentlemen, refusing.

    This time around Obama is going for the moustache role, with a grinning Blair. And wannabee moustaches in the Dail.

    So we have the plans, laid out in detail. The time for “pragmatic”, “practical” overlords is gone.

    Remember Lautenbach, FDR, Woytinski-Tarnow-Bade Plan of the trade unions in 1931.

    We have the experience both bad and good. This time around lets think big.

    • bonbon

      An extremely important manuscript from someone who lived the 1929-1940 period, Robert Becker:
      Der Wahrheit die Ehre! (Truth of Honor or Let the Truth be Told).
      Das Reichbanner Schwarz-Rot-Gold, die vergessene Judenschutztruppe der Weimarer Republik
      Mit einem Vorwort von Helmut Bärwald

      This little book shows how the Reichstagsbrand was done, how the nation was simultaneously from 3 sides (fascist, communist and royal) destroyed, and how the JST, the Jewish Protection Brigade, totally forgotten, were all murdered.

  44. Never fear. We can always have cheese

    Russell Howard’s Good News – Irish Economy

  45. Reality Check

    “No generation has a right to contract debts greater than can be paid off during the course of its own existence” – Thomas Jefferson.

  46. [...] McWilliams / Irish Independent – The fiscal treaty will only make things worse: The situation in the eurozone is not getting any better. The fiscal treaty, by imposing austerity [...]

  47. Wiccaman

    Its great to see Enda Kenny leading from the rear, worried his tissue of lies will be ripped to shreds. Scared to engage on the future of this country. Reduced to giving broadcasts from his Dáil bunker telling us to go back to bed Ireland everything is fine, while financial destruction closes in on all sides. He is a thundering disgrace.

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