ESM & Funding – dirty tricks & threats

Time and again we’ve heard threats of economic catastrophe, usually accompanied with advice that it can only be avoided by accepting worse austerity immediately.

In the referendum debate, the Yes campaign are arguing that the way to avoid worse austerity is to vote for a Treaty that guarantees worse austerity! They must think people have the attention span and intelligence of goldfish.

As people don’t trust the Irish government or the EU establishment, they take seriously the threat that voting No in the referendum will cause the state to be cut off from funding. These threats confirm that democratic rights are being replaced with a creeping dictatorship of capitalist interests.

The Fiscal Treaty was agreed last summer. The text linking funding from the European Stability Mechanism (ESM) to the passing of the Treaty was a late add on in February precisely so the government could blackmail and intimidate people during the debate.

Of course it’s disgraceful, but as the financial markets and these EU bureaucrats have control, technically they do have the capability to withdraw funding. But like with any bully, if you just fold in the face of such threats, the situation is guaranteed to get worse in any case.

In these situations it’s necessary to assess the seriousness of the threat and to see if greater power and pressure can be mobilised against the bully.

The claim that a No vote will mean the state will automatically be cut off from funds from the ESM or generally is a lie. It is a fact that applications for funds can be made to the European Financial Stability Mechanism until summer 2013, a full year after the referendum vote. Applications can also be made to the IMF, or there is nothing to stop negotiations with different individual governments.

What isn’t said by the Yes campaign is that any one of the major countries has the power to veto any future funds from the ESM even if there is a Yes vote, so the claims that a Yes is an insurance policy or a guarantee of funds is another lie.

The Irish government could fight and insist that the link between the referendum vote and future funding is broken. The government doesn’t have the power to veto the ESM but all the indications are that it can veto amendments to article 136 of the treaty governing the functioning of the EU, which are necessary for the establishment of the ESM. But of course it suits the government to deny it has this power as people would demand that they use it.

This issue has also been injected into the debate to try to take attention away from the fact that the Fiscal Treaty institutionalises draconian austerity cuts that will sooner or later lead to bankruptcy in any case. The fact that they are even talking about the need for a second bailout demonstrates that the policy of austerity has already failed.

A Yes vote will guarantee worse austerity for us, just so speculators can get richer and any funds from the ESM will come with demands for poverty conditions. Alternatively, a No vote would be a massive blow against austerity and open up a real prospect for a struggle against capitalism itself.