Saturday

26th May 2018

Ireland votes Yes on fiscal treaty, expects EU solidarity

Ireland has voted in a favour of the fiscal discipline treaty but the Yes vote is seen as grudging and the country is now expecting EU "solidarity" in return.

With all votes counted, 60.3 percent voted in favour of the Germany-inspired document enshrining balanced budgets into national law while 39.7 percent vote against. Turnout was 50.6 percent

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  • Ireland joins Greece, Portugal, Slovenia and non-euro members Denmark, Latvia, Poland and Romania in having ratified the treaty (Photo: William Murphy)

Irish politicians reacted by saying that voters should be rewarded with support at EU-level for initiatives that stimulate economic growth and for a better deal on Ireland's banking debt.

"The Irish people have sent a powerful signal around the world that this is a country serious about overcoming our economic challenges," said Prime Minister Enda Kenny, noting that the result would strengthen Ireland's hand with its EU partners.

"We (must) see progress in the work to secure a more sustainable long-term deal in relation to Ireland’s bank debt. A long-term deal that is workable; that is just," said deputy prime minister Eamon Gilmore.

"The Irish people have shown great judgement and responsibility. Where Member States show such responsibility, the EU should reciprocate with solidarity," said Gay Mitchell, an MEP from the governing centre-right Fine Gael party.

Ireland received an €85 billion EU-International-Monetary-Fund bail-out in 2010, following a spectacular crash in the property sector. Since then, two successive Irish governments have been slashing public spending and raising taxes to meet deficit-reduction targets. In return for harsh reform, the government has for months been seeking to refinance €30 billion of bank debt

An angry Yes?

Even though the Yes vote was strong, politicians admit that it was unlikely to have been due to a strong sense of conviction.

It will be made up of "a lot of angry Yes-es," said social protection minister Joan Burton, ahead of the vote.

Opposition Fianna Fail leader Micheal Martin said those who voted Yes did so cause they "saw it as a lesser of two evils."

The government conducted a Yes campaign based on fear. It warned that voting down the treaty would block Ireland's access from the permanent eurozone bailout fund, the ESM. The No side had argued the treaty risks locking the country into a downward spiral of austerity.

Joe Higgins, a socialist member of parliament and prominent No campaigner, said there was a "very sharp polarisation" between higher and lower income areas with less well areas tending to reject the treaty.

This will have "important implications for the government," he said on national TV.

For the eurozone itself, the Irish vote was something of a sideshow. The intergovernmental treaty will come into force once 12 of the 17 euro countries ratify it, making Ireland's vote welcome but not a prerequisite.

Other profound problems remain.

The euro area's fourth largest economy, Spain, is in serious trouble with high borrowing costs and a large credit shortfall in its banks.

Meanwhile Greek voters will go to the poll on 17 June and could vote for parties that want to change the austerity terms attached to their bailout - an outcome that would once again raise talk about the country leaving the single currency.

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