Undecided voters hold key to outcome of referendum
The outcome of the European stability treaty referendum on May 31st is wide open, according to the latest Irish Times/Ipsos MRBI poll which shows the result is in the hands of undecided voters.
Asked whether they were likely to vote Yes or No to the treaty, 30 per cent of voters said Yes, 23 per cent said No, 39 per cent were undecided and 8 per cent said they would not vote. When undecided voters, and those who won’t vote, are excluded the Yes side is ahead by 58 per cent to 42 per cent but the outcome hinges on the attitude of the currently undecided voters.
A real worry for the Government is that at a similar stage in the first Lisbon Treaty referendum campaign in May 2008, the Yes side had a much bigger lead but the measure was rejected by the electorate in June of that year by 53 per cent to 47 per cent.
However, the Yes side can take heart from the fact that support for a No vote has halved since the last Irish Times poll in October, which asked people how they were likely to vote if EU leaders agreed on a treaty to deal with the fiscal crisis.
At that stage 28 per cent said they would vote Yes, 47 per cent No and 25 per cent were undecided.
The details of today’s poll show that the Yes campaign has strong backing from middle-class voters and farmers but working-class voters are opposed to it by a large margin.
There is also a significant gender difference, with men more supportive of the treaty, while almost half of women voters have yet to make up their minds.
The Irish referendum on the European Stability Mechanism (ESM) treaty is scheduled to take place on 31st. May, and there has been some criticism that this allows inadequate time for a public information campaign and debate. The domestic political landscape has been dominated by controversial new household taxes, water charges and septic tank charges that the Government, allegedly under Troika pressure, is trying to introduce in order to broaden the tax base. The run up to the campaign has also been complicated by efforts to restructure the Anglo-Irish Bank Promissory notes which have so far been stonewalled by the ECB.
The Promissory note issue is particularly controversial in Ireland because they amount to a lot of money (€31 Billion), repayable at high interest rates, and were not part of the controversial Government Bank guarantee scheme. The bank itself is defunct, was never more than a developer/speculators investment bank, and many of its losses were incurred in respect of business deals outside of Ireland. Why should public services be cut to refund speculative private investor losses on business to which the state was not a party and from which it did not stand to benefit? The ECB has been adamant that the speculator be refunded in full even though the original investors have long since been replaced by hedge fund investors who have bought the bonds at a discount because of the risk of default.
The ECB is concerned that a failure to honour the notes will have a contagion effect on the EU banking industry generally and is in line of their policy of not allowing banks to fail no matter how irresponsibly the bank management may have behaved (in stark contrast to the US where banks are allowed to go into receivership all the time). The merits of this policy can be debated, but having already bailed out the mainstream Irish banks to the tune of c. €70 Billion under the Irish Government bank guarantee, many feel this is a problem for the ECB rather than the Irish taxpayer to address. (By way of comparison, Ireland’s GDP was just €155 Billion in 2011).
However all these issues are not directly connected to the Treaty itself and some Government ministers have been at pains not to make a direct connection between the two. Steven Keen is the latest in a long line of distinguished foreign economists to have advised the Irish electorate that they are taking on an unsustainable burden of debt and that the Stability Pact (which he has dubbed a Suicide Pact) makes no economic sense whatsoever.
The main difference between this and previous referenda on EU matters is that the Irish electorate do not have a veto on this occasion however. The Treaty will pass into law for a majority of EU members regardless of whether Ireland votes yes or no and there is a reluctance to move outside what is seen as the EU mainstream. It is widely accepted that the Treaty badly needs to be accompanied by counter cyclical growth promoting mechanisms to counteract its deflationary impact but little optimism that we will see any such initiative from the EU any time soon.
Perhaps the election of François Hollande as French President on the 6th. May will mark a change of direction in EU politics away from the increasingly devastating failure of Merkozy/ECB led austerity economics. His election would certainly help to improve the prospects of a successful referendum campaign as President Sarkozy has been widely seen as spectacularly unfriendly to Ireland in recent times. Certainly people are looking for an EU which is less ruled by the ECB and sovereign debt markets. Whether Hollande will be a significant improvement in this regard is another matter.
For my part, I remain undecided on how to vote. I recognise the Treaty is economic nonsense, but perhaps a political necessity given that Ireland’s debt will be unsustainable without ECB/EFSF support that is unlikely to be forthcoming without a positive vote. In contrast to the Eurozone, the Irish economy is projected to grow marginally this year, but the sustainability of Ireland’s debt (even without the Anglo Irish Promissory notes) remains very much in doubt. It’s all very well arguing that Ireland should never have socialised the private debts of private banks, but those mistakes have been made and are probably irreversible at this stage. “We are where we are” is the most infamous cliché in Irish politics at the moment. We are expected to just suck. it. up.
I would welcome any advice on how I should vote in the comments below.
