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Europe

Ireland votes on EU fiscal pact

Text by News Wires

Latest update : 2012-06-01

Ireland held a referendum Thursday on an EU fiscal pact that would penalise member countries with excessive debts. Government sources predict a favourable result, despite low turnout and a growing EU-wide anti-austerity movement.

AFP - Ireland voted Thursday in a referendum on a key EU pact designed to strengthen the crisis-hit euro, amid signs that a clear majority will approve it.

In the only referendum expected on the fiscal pact, which all 27 EU members have signed except Britain and the Czech Republic, early voting was slow after polling stations opened at 7:00 am (0600 GMT).

Heavy rain showers appeared to be discouraging some voters from turning out.

Polling ends at 10:00 pm and a result is not expected until Friday, but the outcome will be closely watched across the continent.

Rejecting the pact – a German-backed measure which would penalise countries if they fail to keep their spending in check – could give momentum to a growing European backlash against austerity measures.

An Irish "no" would not scupper the treaty, as it needs to be ratified by just 12 countries to come into force and four have already done so, but it could have dire consequences for Ireland.

What the new fiscal rules imply

But opinion polls suggest 60 percent of Irish voters will back the treaty.

The message from the "yes" campaign appears to have got through – that a victory for the "no" camp would exclude Ireland from emergency EU funds when its current bailout package expires in 2013.

The Irish government has warned it would only be able to get guaranteed financial help from the European Stability Mechanism (ESM), the new permanent bailout fund which comes into force in July, if voters approve the treaty.

Eighteen months ago Ireland was forced to seek an 85-billion-euro ($106 billion) bailout from the EU and International Monetary Fund after its economy came close to collapse, and ministers warn they may well have to access more funds.

The government has also warned a "no" vote could hit Ireland's credit rating, making it harder to borrow.

The Irish Independent said Thursday: "A 'no' vote is a vote for poverty, not progress."

Rejecting the treaty "would make it immensely difficult, probably impossible, to borrow sufficient funds to maintain the present level of public services," it added in an editorial.

Finbar McDonnell, who works in the property sector, said as he left a polling station in central Dublin that he had voted "yes".

"I think the treaty is sensible in itself because it's going to limit our deficits in the future," he told AFP.

"I also think a strong 'yes' vote would send a signal to Europe that Ireland wants to be part of the core of Europe and moving ahead into deeper integration – not like our neighbours in the UK, who are opting out of the treaty."

The pact's critics in Ireland have labelled it an "austerity treaty" as it ultimately empowers the EU to fine countries that overspend, and have sought to harness public anger against the spending cuts and tax rises attached to the bailout.

"We know that austerity doesn't work, and that's increasingly what people are saying in mainland Europe," Gerry Adams, leader of Sinn Fein, the main party opposing the pact, said in final campaigning Wednesday.

With a third of the electorate still undecided, there is still a possibility that Ireland could deliver a shock "no" vote, as it has done in two previous EU referendums.

But Michael Marsh, politics professor at Trinity College Dublin, said he expected the treaty to get the green light.

"People argue that you'd vote 'yes' out of fear and 'no' out of anger, but it's a bit more complicated than that," he said.

"There's some trust in what the government's saying, that you'd just be silly not to vote 'yes'."

An Irish rejection of the treaty would not plunge the EU into crisis, as Ireland has done in rejecting two previous EU treaties.

But it would fuel a growing campaign led by France's new President Francois Hollande for Europe to focus on growth rather than belt-tightening as the cure for its economic crisis.
 

Date created : 2012-05-31

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