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Ireland

Ireland votes ‘yes’ to fiscal compact in referendum

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The count is underway, but it looks certain that the fiscal compact will pass yesterday’s Irish referendum — by around a 60-40 margin:

According to results received at the central count centre in Dublin Castle to date, 57.6 per cent voted Yes, while 42.4 per cent voted No, when spoiled or invalid votes are excluded. Turnout is in the region of 50 per cent.

Of the 15 constituencies to submit full results, 12 have recorded a Yes vote. Full constituency-by-constituency results are available here.

Earlier this week, I looked at some of the reasons why Irish voters seemed more inclined to accept this treaty on the first vote, after rejecting the Treaty of Nice in 2001 and the Lisbon Treaty in 2008: in no insignificant terms, a ‘no’ vote would have perhaps caused international investors to flee Ireland and maybe has caused Ireland to be unable to access the European Stability Mechanism.  Also, given that the treaty need not be unanimously ratified, Ireland would have had no ability to reject the treaty in favor of additional concessions from Brussels.
At a time when anti-austerity forces are gathering momentum across Europe, the treaty vote in the tiny country, hamstrung by a European bailout, is not going to stem that momentum.  But it is a significant victory for the mainstream Irish political parties (who have finally won a pro-EU vote for the first time since 1997) and for Irish Taoiseach Enda Kenny and his government: the message Irish voters are sending today, both to European leaders and the markets seems to be, “Not to worry, Ireland’s not Greece.”
It is a defeat for Gerry Adams and Sinn Féin — Adams’s vocal opposition to the treaty did not convince Irish voters in the face of such strong arguments (some might say blackmail) from the markets and from mainstream politicians.

Ireland

Irish set to approve fiscal compact in Thursday referendum

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Ireland’s feisty voters, which have developed an art form out of defeating European Union treaties, still seem likely to support the fiscal compact treaty in Thursday’s referendum:

Polls show the ‘yes’ vote in the lead — the latest Irish Times poll shows 39% in favor, 30% opposed, with 22% undecided and 9% not voting.  Other polls have shown even strong support for the ‘yes’ camp.

After the Sturm und Drang of May 2012’s electoral wave, which has seen voters support anti-austerity politicians from Germany to Greece, the fiscal compact seems to have less momentum than ever.

So it would be a plucky twist of fate if Ireland, which has become the bête noire of EU treaty making — its constitution provides that a EU treaty is an amendment of the Irish constitution and, consequently, must be approved in a referendum — gives a thumbs-up to a fiscal compact that might never go into law EU-wide and would result in a loss of Irish sovereignty with respect to its own fiscal policymaking.

Furthermore, over the course of Ireland’s four decades in the EU, Irish voters have voted on six treaties, and in each case, the initial pro-treaty vote has decreased for each new treaty:

In each of the last two efforts, for the Treaty of Nice in 2001 and the Treaty of Lisbon in 2008, Irish voters initially defeated the treaty, Irish negotiators worked to attain new concessions from the EU and each treaty was subsequently ratified in a second referendum.

The fiscal compact, cobbled together by Merkel and then-French president Nicolas Sarkozy in December 2011 amid soaring bond prices for Spanish and Italian debt, would limit each EU member state to a structural budget deficit of just 0.5% of GDP.  That target seemed unrealistic in November, but seems even more so today, with many European economies still stagnant (or in recession).  Newly elected French president François Hollande has called for revisiting the terms of the fiscal compact during and after his election.

So the final ratification of the fiscal compact is far from certain, with or without Ireland.  As the UK and the Czech Republic opted out of the fiscal compact, the fiscal compact is not, as a technical matter, a formal EU treaty.  Accordingly, it needs ratification from just 12 eurozone members before January 1, 2013 to go into effect.

As of today, it has received just three conditional ratifications. In Slovenia and Portugal, national parliaments have approved the fiscal compact, but the ratifications are not formally complete without presidential approval.  The only other country to ratify the fiscal compact is Greece, whose May parliamentary elections were so inconclusive that the country must hold a second set in June, which could very well result in electing Europe’s most anti-austerity government.

So why, in the face of so many reasons to junk the fiscal compact, which may not even be ratified by the rest of Europe, are Ireland’s voters set to approve it on Thursday? Continue reading Irish set to approve fiscal compact in Thursday referendum →

Ireland

Pro-referendum forces maintain momentum in Ireland

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For me, one of the key questions about the recent French and Greek elections has been how those results would play in Ireland — would a firm anti-austerity wave across the continent make Irish voters more or less likely, in the upcoming May 31 referendum, to endorse the December fiscal compact agreed among all of the European Union members (except the United Kingdom and the Czech Republic)?

Surprisingly, perhaps, given the increasingly cynical response of Irish voters in these EU treaty referenda, the “Yes” vote camp still seems to be maintaining (or even strengthening) its lead over the “No” vote.  The latest poll shows 53% in favor of the treaty (an increase of 6% over the prior poll), with only 31% opposed.

The momentum comes even as German chancellor Angela Merkel finds herself increasingly on the defense against an emergent pro-growth (and anti-austerity) wing from both the periphery — e.g. Greece — and the heart — e.g. France, North Rhine-Westphalia — of the EU.

Say what you will about the current Eurocrisis, it is fascinating to watch the increasingly interlinked politics among the EU member states.  For the first time in EU history, notwithstanding decades of (politically meaningless?) European parliamentary elections, a bona fide European politics has emerged in the austerity/growth debate.  It transcends the traditional right/left axis of national politics and the very existential debate of federalism vs. intergovernmentalism.

Yesterday, Irish finance minister Michael Noonan argued that supporting the fiscal compact would send a message to the EU that Ireland is serious:

Mr Noonan said adopting the treaty will send a signal out to Europe that the Irish are serious, committed people, and committed to the repair job required for the economy.

If we vote No, he said, Europe will move on and we will be left with less than full membership of the eurozone.

To laughter from the audience at an economic summit organised by Bloomberg in Dublin this morning, Mr Noonan said he does not want Ireland to be a pavilion member of the eurozone “where you are allowed drink in the bar, but not play the course”. Continue reading Pro-referendum forces maintain momentum in Ireland →

Ireland

Will the Irish referendum stop the latest EU treaty?

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It’s not as if the European Union needed to plan another landmine to explode the agreed “fiscal compact” from last December which, broadly speaking, would require EU countries to maintain a structural deficit of less than 0.5% of nominal GDP annually. 

With the anti-austerity candidate leading the polls in France and with Greek parliamentary elections scheduled for the spring, there is no shortage of political events that could cause yet another crisis in the eurozone.  And after so many countries (including Germany!) violated the 1997 Stability and Growth Pact’s budget deficit rule (no more than 3% of GDP) throughout the 2000s, you might remain skeptical that any country would hew for very long to a 0.5% budget rule.

So the last thing anyone in Brussels wanted to hear was Dublin’s insistence last week that the fiscal compact will require an Irish referendum prior to its ratification.

Yet last week, Irish Taoiseach Enda Kenny announced that, on advice from the Irish attorney general, Ireland will be required to hold a referendum on the fiscal compact treaty.  It was previously thought (hoped?) that an Irish referendum might not be necessary.  Given that British prime minister David Cameron announced that the UK would veto the amendment of existing EU treaties, and the decision of the Czech Republic not to join the final version, the treaty is not a formal EU treaty, but an intergovernmental treaty among the remaining 25 EU members.

Under Crotty v. An Taoiseach in 1987, the Supreme Court of Ireland decided that any significant changes to any EU treaties to which Ireland accedes require an amendment to the Irish constitution prior to ratification, and therefore subject to a referendum.

Currently, polls indicate that 60% of Irish voters support the treaty, but the referendum date has not yet been announced and opponents will have ample time to mobilize.

If you look at the trajectory of the first-shot Irish referenda on various EU treaties, you would not necessarily be optimistic:

Continue reading Will the Irish referendum stop the latest EU treaty? →