Saturday

25th Feb 2017

Irish head to polls on fiscal treaty

  • Dublin shopping street: the result of the vote is due late on Friday (Photo: William Murphy)

Irish voters are heading to the polls on Thursday (31 May) to decide on the budget-balancing fiscal discipline treaty, amid a stark warning by Prime Minister Enda Kenny that to reject the document would see the country's borrowing costs soar.

Unlike Ireland's numerous previous referendums on other EU treaties, the outcome will not determine whether the document comes into force. This will happen if 12 of the 17 eurozone countries ratify it.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

But this fact has not removed the heat from the domestic debate.

The Yes camp, including the government, point out that a rejection would mean that Ireland will not have access to the permanent eurozone bail-out fund, the European Stability Mechanism (ESM).

They also say that when Ireland returns to the markets late next year, its borrowing costs are likely to be high if the treaty has been turned down.

"Countries that ratify this have access to the ESM, countries that don't, won't and the difference between 3 percent and 7 percent, or even 8 percent or 9 percent, is enormous in the context of availability of funding, were that ever to be necessary," Prime Minister Enda Kenny said on Wednesday (30 May).

The No side argue that this is scare-mongering and the country could, if necessary resort to funding from the International Monetary Fund (IMF). Their main argument is that the treaty will condemn Ireland to continued austerity.

"Don't be fooled. Be wise. Join with the millions across Europe who are demanding an end to austerity," said Gerry Adams, the leader of Sinn Fein party, for which support has just hit a record 24 percent.

The Yes side has been in the lead since campaigning began. The latest poll suggested 53 percent in favour to 47 percent against. But the government is nervous about the mood of the austerity-weary public. Irish citizens have been subjected to large public spending cuts as well as tax hikes since the country received an €85 billion EU-IMF bail-out in 2010.

The 11-page treaty, pushed by Germany as a way of ensuring more fiscal discipline in fellow EU member states, says signatories must keep their budgets balanced or in surplus. The annual structural budget deficit should be kept to 0.5 percent of GDP.

It also imposes strict monitoring and automatic correction mechanisms - such as raising taxes - to ensure deficit targets are kept.

Some of the Irish debate has centred on the fact that a structural deficit and how it is measured is not defined in the treaty, with critics saying this means it is not clear what the country is signing itself up to.

Advocates of a Yes say the fiscal compact is necessary both to ensure the country's stability and to counteract years of imprudent spending by former governments.

Polling stations open at 7am local time on Thursday and close at 10pm with around 3.1 million people eligible to vote. Results are due late on Friday.

MEPs set to approve Canada trade deal

The European Parliament is expected to give the green light to the EU-Canada free trade agreement, which would start being implemented in April.

EU leaders to discuss migration, in Trump's shadow

New US president Trump overshadows the Malta summit of EU leaders on Friday, as they discuss the bloc's future amid new geopolitical realities, and step up efforts to stop migration via Libya from North African countries.

EU leaders must stand up to Trump, say MEPs

MEPs have urged the EU to stand up for European values, starting with rejecting Trump's presumed choice for US ambassador, who has stated that he wants to "tame" the bloc.

France's Macron issues Brexit warning

The centrist presidential candidate tells talented Britons to come to France and warns against giving the UK "undue advantages" after Brexit, in a speech in London.

French police raid Le Pen's party office

Officers raid the National Front headquarters near Paris over allegations that leader Marine Le Pen used fake EU parliament contracts to pay her personal staff.

News in Brief

  1. Spanish court jails former IMF chief Rato
  2. Macron proposes Nordic-style economic model for France
  3. Germany posts record high budget surplus
  4. Labour ousts Ukip in Brexit homeland
  5. Dutch lower house approves EU-Ukraine treaty
  6. WTO says Russian pork ban was illegal
  7. Belgian nuclear plant made 'significant progress' on safety
  8. Report: Commission gauging EU support for Poland sanctions

Stakeholders' Highlights

  1. EURORDISJoin the Rare Disease Day and Help to Advocate for More Research on Rare Diseases
  2. European Healthy Lifestyle AllianceStudents Who Are Considered Fit Get Better Grades in School
  3. QS World MBA TourMeet with Leading International Business Schools in Paris on March 4th
  4. Malta EU 2017Economic Governance: Agreement Reached on Structural Reform Support Programme for Member States
  5. Socialists & DemocratsWomen Have to Work Ten Years Longer to Match Lifetime Earnings of Men
  6. Counter BalanceTrans-Adriatic Pipeline Is a Major Risk for Banks, Warns New Analysis
  7. Martens CentreEU and US Migration Policies Compared: Join the Debate on February 28th
  8. Swedish EnterprisesTechnology and Data Flows - Shaping the Society of Tomorrow
  9. UNICEFNearly 1.4 Million Children at Risk of Death as Famine Looms Across Africa and Yemen
  10. Malta EU 2017End of Roaming Fees: Council Reaches Agreement on Wholesale Caps
  11. Nordic Council of MinistersNordic Innovation House Opens in New York to Help Startups Access US Market
  12. Centre Maurits CoppietersMinorities and Migrations