Saturday, April 28, 2012

Alternative to Permanent Austerity exists – Mythen

Cllr Mythen with Mary Lou
McDonald TD & Noirin Sheridan
 There are alternatives to institutionalising the permanent austerity measures outlined in the EU Fiscal Compact Treaty according to Enniscorthy Sinn Féin Cllr Johnny Mythen. Cllr Mythen outlined the alternatives his party are putting forward as the Austerity Treaty Road Show visits Enniscorthy and Gorey today. Sinn Féin is calling for a write off of banking debt, the cleansing of the European banking system and an increase in the lending capacity of the European Investment Bank which should be used to fund job creation programmes in struggling EU member states such as Ireland.

“There are alternatives to permanent austerity,” Cllr Mythen said, “Sinn Féin has consistently argued that the only way out of recession is to seize the initiative by investing in a major stimulus programme. If the core EU nations like Germany who are pushing this treaty are serious about ending the Eurozone crisis then they need to see that investment in Ireland is more worthwhile than forcing constricting austerity down our throats.”

“If the EU increased the lending capacity of the European Investment Bank it would allow member states like Ireland to roll out major projects in order to generate employment, increase competitiveness and improve the social and economic infrastructure, leading to both immediate and long term economic growth. Immediately the EIB could aid struggling member states to stimulate their economies and by doing so reduce their deficits without destroying their countries in the process. In the long term the EIB could act as a mechanism for recycling a portion of budget surpluses from core EU nations into the economies of periphery nations which would benefit people across the union.”

“The Fiscal Compact Treaty attempts to introduce strict new controls over debt to GDP rations. Next year it’s expected that our debt to GDP ratio will hit 120%. Controls won’t reduce this now. A Debt write off would. Sinn Féin is campaigning for the write down of debts that were originally banking debts, leaving us only our sovereign debt to contend with. Such a write off would see our debt to GDP ratio fall by 20% immediately.”

“There is also a responsibility on the European Central Bank to help struggling nations return to the bond markets. Under existing European Treaties the ECB is instructed to prevent any Eurozone member state from being frozen out of the markets and, if necessary, be prepared to stabilise the price of sovereign bonds. The ECB could do this by buying Government bonds of countries currently excluded or at risk of exclusion from the markets. Such bond buying programmes should be done in parallel with programmes agreed between the member state and the ECB detailing strategies for deficit reduction, economic growth and debt reduction.”

“These measures are genuine achievable alternatives to the fiscal compact treaty. They are alternatives that put the need for real investment into stagnant economies to the forefront and relegate failed austerity to the history books where it belongs. Austerity has never brought a nation out of recession but stimulus has. Its time those people shouting for the introduction of this austerity treaty accept that clear and concise alternatives exist and that the Irish people won’t be fooled by their Chicken Little rhetoric of no alternatives.”

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