O woe is me! Despite all attempts at avoiding a referendum in Ireland on the “fiscal compact”, the Attorney General has ruled that “on balance” one will be required to amend the Constitution to accomodate the pact…
Referendum to be held on European fiscal compact – The Irish Times – Tue, Feb 28, 2012
The Government is to put the revised European Union fiscal compact treaty which tightens controls on member states’ budgetary decisions to a referendum, Taoiseach Enda Kenny told the Dáil this afternoon.
The compact, agreed at special EU summit last month, proposes tough new budgetary discipline on each euro zone state, including near-zero public deficits. Twenty-five of the European Union’s 27 countries have signed up to the new treaty, with only Britain and the Czech Republic opposed.
Mr Kenny told the House that the Attorney General’s advice at this morning’s Cabinet meeting was that “on balance”, a referendum was required to ratify it. Scheduled Dáil business was interrupted for the statement.
The Taoiseach said that he intended to sign the treaty at the weekend with all the heads of the EU in Brussels. In the coming weeks, he said the Government would finalise the arrangements and the process leading to the referendum, leading to the establishment of a referendum commission. No date was given for the poll.
Referendum to be held on European fiscal compact – The Irish Times – Tue, Feb 28, 2012
Mr Kenny has previously denied the compact will condemn the State to further years of austerity.
Tánaiste Eamon Gilmore said the referendum would come down to a vote for economic growth and stability. “We now have an opportunity to go beyond the casino capitalism,” he said.
Fianna Fáil leader Micheál Martin criticised the Government for notifying the Opposition eight minutes before the Taoiseach’s announcement. “I think it’s the right decision and one that shouldn’t have required legal advice in my view,” he said.
Sinn Féin and a number of left-wing TDs opposed to the treaty had indicated their intention of issuing a court challenge if a referendum was not held.
Sinn Féin leader Gerry Adams said it was another failure by the Government, which had tried to avoid the referendum. “The question is will the Government accept the outcome? Are we going to have the usual re-run replay?” he asked.
Irish voters rejected the Nice referendum in 2001. It was passed following a re-run in October 2002. The Lisbon referendum was rejected in 2008, before being passed a year later after Ireland secured a number of concessions.
The Green Party said it would seek support for a Yes vote on the referendum, with leader Eamon Ryan saying the measures provided for in the fiscal compact was in the national interest.
Support for the European Union has cooled in Ireland following the financial crisis, meaning there is no guarantee a vote will succeed. A rejection could damage Dublin’s long-term funding prospects and cast doubt on the country’s commitment to the single currency.
In December, Minister for Finance Michael Noonan said a vote on the treaty would effectively be a vote on Ireland’s membership of the euro.
Rejecting the treaty would also bar Dublin from accessing the European Stability Mechanism (ESM), the permanent successor to the euro zone’s current rescue fund which Ireland is tapping as part of an EU-IMF bailout that runs until the end of 2013.
The Government has been studiously denying that it has been doing everything possible to avoid a referendum. However, once again a German politician stepped into the breach to totally undermine the Government’s position:
Referendum to be held on European fiscal compact – The Irish Times – Tue, Feb 28, 2012
Last week, Germany’s minister for European Affairs Michael Link confirmed that European Union negotiators sought to design the fiscal compact in such a way to avoid a referendum in Ireland.
The Government – and lead opposition party, Fianna Fail – now face the nightmare scenario of a referendum campaign in which they are pledged to support an increasingly unpopular EU and fiscal austerity pact – on pain of losing all EU/IMF/ECB funding and the whole basis of their economic recovery strategy. Sinn Fein, the only opposition party to consistently oppose the Troika strategy has been cleaning up in the opinion polls recently and eclipsing Fianna Fail (25 to 16%) as the major opposition party. This referendum is tailor made for them drive a stake through the heart of Fianna Fail if not the Government. Labour is also particularly vulnerable – down to 10% in the polls. Fine Gael is the only party (other than Sinn Fein) to retain its support. Its largely conservative bourgeois base is quite happy that Austerity policies are hitting the feckless working class most whilst underwriting their relative social position.
For the first time in my life I too, will be forced to consider voting NO in a EU referendum. The pact is economic nonsense, as every reputable economist knows. Worse, in enshrines the IMF/EU/ECB Troika’s insistence that we bail-out the bond-holders in Anglo-Irish Bank to the tune of €30 Billion – despite the fact that Anglo never was a strategic bank, and its bond holders were never covered by the truly stupid Government bank guarantee. The original bond-holders have long fled the scene to be replaced by speculative hedge funds who bought the bonds at a discount reflecting their un-guaranteed status. But what really sticks in the craw is that these “Promissory notes” have to be funded at market interest rates and not the preferential ESM funding available for other Government debts. As a result, the €30 Billion Anglo debt could well become €70 Billion by the time all capital and interest has been repaid, or almost 40% of current Irish GDP – all for one worthless, defunct, non-strategic private property speculators bank that most people had barely heard of prior to the crisis!
Recent opinion polls have indicated that only 24% (down 20%) of Irish people trust the EU and only 34% think that Irish interests are taken into account by the EU. 78% still support the Euro, but few will accept Michael Noonan’s contention (above) that the referendum is effectively on membership of the Eurozone itself. The key issue is that a NO vote will prevent the Government from accessing ESM funding, without which a default will be all but unavoidable. Many will welcome the prospect of a default – particularly on the Anglo-Irish promissory notes – given there was never a coherent case for the state to take over such ludicrous private debts.
Merkel and the ECB have been playing hardball on the Anglo promissory notes and refusing all (rather timid) attempts by the Irish Government to either negotiate a managed default or to fund the debt at ESM rates. Without some flexibility on this issue, I can’t see the referendum passing. However the Fiscal Pact will go into operation even if only 12 countries ratify it, so in theory Merkel could kiss Ireland – as well as the UK and Czech Republic – goodbye. However without access to ESM funds Ireland will be forced to default which will wreck havoc in the Eurozone as a whole.
Once again perhaps only democracy and not a feckless government will stand in the way of a great EU/IMF/ECB clusterfuck that is their stance on the Anglo promissory notes. The Government sought to avoid a referendum because of the unpopularity of austerity policies as a whole. Expect either a defeat for the pact or some last minute deal on the default or funding of the Anglo promissory notes. The next few weeks and months are going to be interesting. Merkozy may have thought the Greek deal would give them some breathing space to allow a Eurozone recovery and improve their own electoral prospects. They had better think again. Pandora’s box has just been re-opened. Would it be too much to hope that it might also reopen a Europe wide debate on the need for an employment and economic development strategy to complement the austerity pact?
