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However one interprets the core constraints of the Fiscal Compact Treaty  (officially cosily known as the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union), several facts are indisputable.   Firstly, the new treaty will restrict the scope for future exchequer deficits. This has prompted the ‘No’ side of the referendum campaigns to claim that the Treaty will outlaw Keynesian economics. This claim is exaggerated. Combined structural and general deficit targets to be imposed by the Treaty would have implied a maximum deficit of 2.9-3.0 percent in 2012 as opposed to the (equivalent) IMF-projected general government net borrowing of 8.5 percent of GDP. With the value of the Treaty-implied deficit running at less than one half of our current structural deficit, the restriction to be imposed by the new rules would have been severe. However, in the longer term, Treaty conditions allow for accumulation of fiscal savings to finance potential liabilities arising from future recessions. This is entirely compatible with the spirit of Keynes, even though it is at odds with the extreme and fetishised worldview of the modern Left, that sees no rational limit to debt accumulation so long as it stimulates economies out of recessions and broader crises.   Secondly, the Treaty will impose a severe long-term debt ceiling, but that condition is not expected to be met by Ireland any time before 2030 or even later.   One interesting caveat regarding the 60 percent of GDP limit is the exact language employed by the Treaty when discussing the adjustment from excess-debt levels. The Yes camp made some headway in convincing voters to support the Treaty on the grounds that debt paydowns required by the debt bond will involve annually reducing the overall debt by one twentieth of the debt level in excess of the 60% limit. However, the Treaty itself defines “the obligation for those Contracting Parties whose general government debt exceeds the 60% reference value to reduce it at an average rate of one twentieth per year as a benchmark” (page T/SCG/en5). Thus, there is a significant gap between the Treaty and reality.   Another debt-related aspect of the treaty that is little understood by some analysts is the relationship between the deficit break, structural deficit limits and the long-term debt levels consistent with the economy’s growth potential. Based on IMF projections, our structural deficit for 2014-2017 will average over 2.7% of GDP, which implies Treaty-consistent government deficits of around 1.6-1.7% of GDP. Assuming long-term nominal growth of 4-4.5% per annum, our ‘sustainable’ level of debt should be around 38-40% of GDP. Tough, but we were at public-debt-to-GDP ratios of below 40 percent in every year from 2000 to  2007. It is also worth noting that we have satisfied the Treaty’s  60% debt limit every year between 1998 and 2008.   Similarly, the Troika programme for fiscal adjustment implies a de facto satisfaction of the Treaty’s deficit limit after 2015, and consistent non-fulfilment of the structural deficit rule and the debt rule at all times between now and 2017. In other words, no matter how we spin it, in the foreseeable future, we will remain a fiscally rouge state, client of the Troika and its successor, the ESM.   On the negative side, however, the one-twentieth rule will be a significant additional drag on Ireland’s economic performance, compared to the current Troika programme. If taken literally, the average rate of reduction of the Government debt from 2013 through 2017, required by the Treaty would see our state debt falling to 87.6% of GDP in 2017, instead of the currently-projected 109.2%. In other words, based on IMF projections, we will require some €42 billion more in debt repayments under the Treaty over the period of 2013-2012 than under the Troika deal.   On balance, therefore, the Treaty is a mixture of a few positive, historically-feasible, benchmarks that are dubious for the future, and a rather strict short-term growth-negative set of targets that may, if satisfied over time, be beneficial. Confused? That’s the point of the entire undertaking: instead of providing clarity on a reform path, the Treaty provides nothing more than a set of ‘if, then’ scenarios.   Let me run though some hard numbers – all based on IMF latest forecasts. Even under optimistic scenarios, Ireland’s real GDP is expected to grow by an average of 2.27% in the period from 2012 to 2017. This is the highest forecast average rate of growth for the entire euro area, excluding the Accession states (the EA12 states). And yet, this growth will not be enough to lift us out of the Sovereign debt trap. Averaging just 10.3% of GDP, our total investment in the economy will be the lowest of all EA12 states, while our gross national savings are expected to average just 13.2% of GDP, the second lowest in the EA12.   In short, even absent the Treaty, our real economy will be bled dry by the debt overhang – a combination of the protracted deleveraging and debt-servicing costs. It is the combination of government debt and unsustainable levels of households and corporate indebtedness that is cutting deep into our growth potential, NOT the austerity-driven reduction in public spending. In this sense, Treaty-induced acceleration of debt repayments will exacerbate the negative effect of fiscal deleveraging, while delaying private debt deleveraging.   However, on the opposite side of the argument, the alternative to the current austerity and the argument taken up by the No camp in the Treaty campaigns, is that Ireland needs a fiscal stimulus to kick-start growth, which in turn will magically help the economy to reduce unsustainable debt levels accumulated by the Government.   There is absolutely no evidence to support the suggestion that increasing the national debt beyond the current levels or that  dramatically increasing the tax burden on the general population – the two measures that would allow us to slow down the rate of reductions in public expenditure planned under the Troika deal – can support any appreciable

While the Green Party was in government it had a number of redline issues: key among them were the refusal to contemplate a flat rate property tax for the primary residence and a resistance to any movement towards the privatisation of water. We now know that the government has made a dog’s dinner of the property tax but there has been less scrutiny of the creation of Irish Water, the Fine Gael brainchild. Most of the political comment from the opposition is focused on the apparent unfairness of water charges and in particular the costs of installing the water meters themselves. But they’ve managed to ignore the beast in the room that consumes over 200 litres of water a day in the wild. Let me state it bluntly: the creation of Irish Water is the first step in the privatisation of water. No doubt about it. And we haven’t heard a squeak from the Labour mice, except yet another flat denial from Eamon Gilmore. Let’s ask a number of pertinent questions, the questions that Labour haven’t asked or simply don’t want to think about. Why are we setting up this new entity when local authorities have managed successfully to provide water to the citizens, albeit with a leaking pipe network due to lack of investment? It was because of leaks that the local authorities themselves were the greatest advocates of charges, knowing that extra investment was badly needed for the creaking system. Fine Gael have made no secret that they intend to follow the British model, a model which led inevitably to privatisation but was found wanting, as we know, in Northern Ireland when many were left with no water during the cold snap. And what about the loans from the National Pension Reserve Fund (NPRF)? How is the loan from the NPRF to Irish Water secured. The Greens had proposed that the loan should just be secured on future water charges, i.e. the NPRF would be able to call on future water-charge revenues to ensure their loan was paid back. However, government departments were suggesting that the loan would be secured on the assets of the water service itself, raising the prospect that the entire water system could be used as collateral for the loan. As the NPRF is part of the state, this obviously wouldn’t amount to privatisation, but the move of transferring ownership of the water assets to Irish Water suggests that Irish Water could in the future raise commercial capital using these assets as collateral, which would mean that the water service could end up in private hands by default. But it won’t be by default. Privatisation is fully in keeping with the ideology of the Sate’s most right wing party, Fine Gael, bolstered by their Blairite lackies in Labour. Even a cursory reading of their own document provides a enough signposts towards privatization. This model proposed is recognised in capital markets as the most attractive proposition to lenders and is understood by investors who lend to the water sector in other countries. A key factor in evaluating the merits of the new operating model is the possibility that the borrowings of Irish Water could be outside the General Government Balance (GGB). Its capacity to borrow on the international markets would be a key factor in enabling the company to become financially sustainable and separate from the Government. It is proposed to transfer all infrastructure to this new body and allow it to go to the market to borrow money using Ireland’s water infrastructure as security. It is this drive to remove funding of the water sector from the Government that is pushing water infrastructure into the hands of private investors. The funding of water services is proposed ultimately to come from two sources, the consumer and private investors. The current system requires €600million annually in capital investment, with a backlog of €500million for essential projects being experienced already. The significant level of investment required indicates that majority control over water infrastructure would be wielded by private investors should the Government pursue its plans. The report repeatedly states that the new model will drive efficiency. Any reorganisation of the current system would improve efficiency – once there’s a commitment to reinvest the money from charges back into the system. However, once profit becomes the main motive, efficiency for the public good becomes secondary. There are people in the Labour party who get this, but they remain silent as their leaders take them into hostile territory for any self-respecting socialist. Recognising these potential difficulties, the Green Party raised the prospect of protecting our water resources from privatisation in the Constitution. Is it too much to ask that Labour would include this idea in their deliberations in the Constitutional Convention?

Where is the community sector when it is needed? The sector should provide opportunities for people to mobilise on inequality and poverty, and be a valuable source of new ideas and alternatives. This is a sector that needs to be active in the face of austerity, economic recession and political unresponsiveness. Yet, outside of a small number, it is a sector that has been noticeable mostly for its absence. There has been a constant whittling away of the resources available to the sector. At best this is a reflection of the inferior status of the sector: politicians see it as expendable, a source of quick and easy savings. At worst it is a reflection of a political hostility to the sector and a desire to put manners on it. Community groups have, as a result, become dominated by the fight for survival. Organisations are partly trapped by the predominance of their role as service-providers to increasingly disadvantaged communities. At times, advocacy has disintegrated into a demand to save jobs in the sector. Everything, it appears, is changing and yet the survival imperative has the community sector ever more determined to stay the same. The sector has not examined whether its structures still serve action for equality and justice. The sector has not explored how its role could evolve to enable a society based on these values to emerge from this crisis; or analysed what happened to it during the boom times. During the boom times the sector evolved as a policy-focused lobby. It sought a closer relationship with decision-makers at national level and, ultimately, to bring its agendas into social partnership. Opportunities for partnership with the state opened up at local level too. A division grew between those organisations close to or engaged in social partnership and those outside the partnership process. There was a failure to develop a dual strategy. Participation within social partnership was weaker for not being linked to protest and agitation outside of social partnership, and protest and agitation was more easily marginalised where it had no means of communication with decision-makers. During the boom the state had funds to dispense and the sector secured significant funds to provide services within disadvantaged communities. The sector turned into a local service-provider. It developed a skills base as an employer and a service-provider to the exclusion of its earlier focus on politicising and mobilising. This function was accompanied by a significant bureaucratic workload. The accountability of organisations shifted to the state and its authorities rather than to their local communities. The sector must now become more visible and active. Imagination is required to define a new purpose and agenda for the sector and to break with the roles taken on in the boom times. Organisations in the sector need to change their primary role from being a partner of the state or a servant of the state. Their primary role has to become oppositional to the dominant policy positions being pursued by the Government. Organisations need to build and pursue new agendas that reflect an alternative to the dominant visions for society and the economy. Academia has an important contribution to make in responding to this challenge of imagination. Academics need to enable organisations to advance effective alternatives to current austerity policies. Fluid alliances are needed across the strict boundaries that have divided the sector. New relationships of co-operation and collaboration need to be brokered. The relationship between national and local organisations needs to be repaired and redeveloped. National action needs to advance local issues. Agendas at national level need to come from the local experience of poverty and inequality if they are to have resonance. Local action needs to give expression to analysis and priorities agreed at national level if local opposition is to be part of something greater than the efforts of individual organisations. The surplus of organisations operating within the sector also has to be addressed. Where there is overlap of function and values, mergers need to be considered. Some co-ordinating structures too now need to be let go and others need to be given new function. The focus for much of the policy work done has been on the powerful and the focus for service provision has been on the powerless. An oppositional purpose, a context of political unresponsiveness and a situation where values of equality and justice have only limited popular traction mean that the sector now has to refocus the nature of its work with the disadvantaged, those at risk of disadvantage and those with potential to be in solidarity with people living in poverty and inequality. This is about prioritising work to convince these people of the necessary centrality of equality and justice to the society that emerges from crisis. Mobilisation and politicisation must become the core activities.   Niall Crowley is an equality consultant and formerly CEO of the Equality Authority