Nama Wine Lake asks “What did Michael Noonan get in return for an agreement which may leave this country stranded without practical funding options from 2013?” i.e. what did he get in return for signing a treaty that stated that Ireland could only obtain further bailout funds if it signed the fiscal compact?

Phrased that way the answer is clearly, “damn all”. Still, I’ll take up the challenge of answering a different question “Why Did Noonan Sign the ESM Treaty?”

The simple answer is that no matter how the game played out, Ireland wasn’t going to get further bailout funds without signing up for new fiscal rules. Since the Merkozy summit in August, Mrs. Merkel was determined that binding fiscal rules were required in the Eurozone as cover for whatever else she may have to agree to. So far, what she’s agreed to is less momentous than many imagined last Autumn (a slightly expanded ESM and not too much grumbling about LTROs and weakened collateral rules) but talk of Eurobonds or ESM-as-a-bank are usually only a wobble away (which reminds of this tweet.)

If Ireland had objected to signing a changed ESM Treaty with the “poison pill” clause about the need to have signed the Fiscal Compact, then I’m pretty sure the original ESM Treaty could just have been mothballed and a new institution put in place by a non-EU treaty just like the Compact.

Even if the old ESM Treaty could have been left unchanged, loans can only be dispensed by ESM if a qualified majority of member states approved. What chance Ireland’s appplication for funds succeeding if it was the country that wrecked Mrs. Merkel’s plans of quid pro quo?

I’m also not so sure that the addition of the poison pill clause was quite as secretive as NWL and Vincent Browne seem to think.

The idea that ESM access was the inducement for many countries to sign the new treaty was mentioned often enough in the run-up to December. The requirement for signing the Compact to access ESM was then mentioned in the preamble of the treaty text on January 31. In the subsequent days, Vincent treated his viewers to some classic monologues about how this claim that the Compact had to be signed to obtain ESM funds was a lie, a lie, a terrible monstrous lie. Only it wasn’t. Two days later, I posted the ESM Treaty on the Irish Economy blog here, noting that VB show viewers might be interested.

Irish governments have made some terrible mistakes in recent years. I don’t think signing the revised ESM Treaty was one of them.