Irish backlash that could mean a No to Europes austerity plans
- An ally for a Greek rejection?
All pain no gain: the Irish backlash that could mean a No to Europe's austerity plans
With Ireland getting fed up of belt-tightening, the odds are shortening on a No vote to the referendum on the European fiscal treaty, reports Colin Freeman
By Colin Freeman, in Dublin
8:00AM BST 27 May 2012
Written in fading letters that no-one any longer believes, the banner above Dublin's Ballymun shopping precinct hails it as "the heart of Europe's most successful urban regeneration project".
Instead, it has become a showpiece not for Ireland's economic success, but its spectacular downfall. The regeneration that transformed parts of Dublin's toughest district into gleaming new flats ground to a halt after the 2008 financial crisis, and today the shopping centre remains as it was, a drab 1960s throwback of boarded-up shops, a fortress-like pub, and a small crowd of drunks who gather out front.
Little wonder, then, that there is scant enthusiasm among Ballymun's residents for this Thursday's national referendum on Europe's fiscal treaty, a German-backed plan that will legally bind Ireland and 25 other European signatories to much tighter public spending limits.
The Irish government, which has already had an 85 billion bailout in 2010, insists that only by signing up will they get the further loans for economic recovery, although the stakes go far beyond simply rescuing the Celtic tiger from extinction. Failure to endorse the treaty could encourage other nations to follow suit, putting the entire austerity project and the very survival of the euro at risk.
Yet here in Ballymun, where debt for many is already a way of life, that is someone else's problem. The referendum ballot paper might as well simply offer "No" or "Unprintable", if inquiries by The Sunday Telegraph last week were anything to go by.
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"All the government has done is look after the wealthy bankers," said Joe Redmond, a hospital care worker, 54, nursing a pint in the shopping centre's pub. "My own wages have dropped by nearly 1,000 a month because overtime has been banned, and everything is just done with less staff. Now they want me to vote for a system where Europe has a say in our budget, and stops me ever getting a pay rise."
His brother Paul, 47, a local drug outreach worker, nodded. "My unit has been cut from 12 staff to eight, just when there's more people doing drugs around here than ever before. Besides, just like you Brits, we Irish don't like being told what to do, especially by Germans. Two world wars, and they're still controlling Europe."
With Ireland the only country in the 17 member eurozone to be putting the fiscal treaty to a popular vote, this week's referendum is seen as a key test for the viability of the Europe-wide belt-tightening package, which needs the backing of at least 12 nations to go through.
Treaty supporters say there is actually no real choice to be had - Ireland must balance its books anyway, and besides, only by signing it will Dublin have access to the EU's new emergency assistance fund, the European Stability Mechanism, should it need a second bail-out in the tough times ahead.
But after three grim years as the "poster child" for austerity measures - unlike Greece, Ireland has not baulked at painful cost-cutting programmes - there is already a growing sense of all pain and no gain. The recent election of anti-austerity parties in Greece and the socialist Francois Hollande as French president has further boosted a Left-driven "no" campaign, to the point where the referendum is no longer the certain "Yes" that the government had hoped.
The campaign posters that line Dublin streets argue the toss in stark terms. "For a working Ireland, vote Yes," reads one. "Warning, permanent austerity ahead, vote No," reads a second, shaped like a road-sign. Other "No" posters show a touch of xenophobia in a traditionally pro-European nation, depicting the treaty's most powerful backer, the German Chancellor, Angela Merkel, under the slogan "Treaty Destroys Democracy". Some had removed after being daubed with a Hitler moustache.
An Irish "No" would not by itself derail the fiscal treaty, because only 12 eurozone countries are required to ratify it for it to come into force. Already, Romania, Portugal, Greece, Slovenia and Slovakia have done so. However, it would embolden increasingly powerful anti-austerity campaigns in bigger eurozone countries like Italy and Spain, any of whose failure to participate could effectively sink the project.
"A No vote in the only popular poll on current efforts to save the euro would be hugely damaging to the treaty, in that it would signal to investors that if it was put to a vote in many countries, it would not get past," said Hugo Brady, of the Centre for European Reform.
"The sense of a backlash against austerity would be much enforced."
Leading the No vote is Sinn Fein, whose combination of Irish nationalism and hard-left economics has struck a chord with many. The party, which now has 20 per cent support in southern Ireland, puts much of the blame on Ireland's banks, whose reckless lending inflated an unsustainable property bubble during the boom years.
But Sinn Fein's nationalists have also made much of how the new treaty will leave Ireland open to huge European Court of Justice fines if it breaches spending rules. In comments that give him unlikely common cause with the Euro-sceptic wing of Britain's Tory Party, the Sinn Fein leader, Gerry Adams, said: "We believe in the democratic rights of our citizens, who have the right to sack governments. You can't do that with the European Commission or the European Court of Justice."
Like Leftist parties in Greece, Sinn Fein says that even if Ireland were to say No, Europe would still have no choice but to offer bail out-cash, a claim denounced as dangerously misleading by its opponents.
"They have said that we would have access to funding, but the stabilty treaty explicitly says that we will not," said Timmy Dooley, director of elections for Ireland's centrist Fianna Fail party, which is backing the Yes vote. "Also, without showing that we had put fiscal discipline measures in place, we would not be seen as an attractive prospect to market lenders."
The Yes campaign, though, has likewise been accused of overstating its case, with its spectre of a second bail-out derided as a "blackmail clause". Its public relations drive has not been helped by the "lofty" attitude of the Taoiseach, Enda Kenny, whose Fine Gael party formed a ruling coalition last year after voters angry over the economic crash gave the incumbent Fianna Fail its worst election result in 85 years.
Mr Kenny has declined a televised debate with Mr Adams, preferring a formal address to the nation on Sunday night, which, critics say, simply reinforces the idea that there is no real discussion to be had.
One area where Yes canvassers expect to do well is Clongriffin, an affluent private housing development just a few minutes drive from Ballymun.
They do, however, have to be careful where they knock: as one of the "ghost estates" built before the property crash, many of Clongriffin's houses are still unsold, with weeds springing up on empty driveways, despite being slashed in price from 900,000 to 625,000.
Still, resident Graham Parker, 32, a shipping agent, believes that a Yes vote is his best way of ensuring that he gets some neighbours.
"We will probably need another bail-out anyway," said Mr Parker, whose business folded last year thanks to clients failing to pay bills. "So getting on the wrong side of Brussels will not help."
In nearby Malahide, a pretty seaside village whose residents include the actor Brendan Gleeson and Boyzone singer Ronan Keating, there is a similar willingness to hold out. Many of luxury yachts in the local marina have now been sold off, and the smart Cruzzo restaurant shut down in January, but Fiona Gillespie, a member of a local scuba diving club, sees Ireland coming up for air soon. "I'm a pharmaceutical engineer, and there has definitely been an upturn in my work in the last 12 months," said Ms Gillespie, 40, whose industry is now one of Ireland's biggest exporters. "That suggests the economic measures are working, so I will probably vote Yes, it's the vote of least uncertainty."
Back in Ballymun, the referendum was put to a public debate last week at a gleaming civic centre, built during the boom years. Mindful that many voters have complained of difficulty understanding the treaty's small print, debate chairman Dr Eion O'Malley, a lecturer in government at Dublin City University, tailored his explanation to his 30-strong audience.
"If you go drinking one Thursday night when you don't get paid until Friday morning, you have to borrow," he told them. "If you do that every Thursday night, and you are borrowing ever more money to get ever drunker, that's a structural deficit. The referendum is on whether governments should be allowed to run structural deficits or not."
Putting the "Yes" and "No" cases respectively were Blair Horan and Mick O'Reilly- both trade unionists by background, but divided over what concessions Irish workers should give. "We trade unionists might not like tight budget rules as they reduce our negotiating capacity, but we joined the euro to have a hard currency, and the euro could fail if this treaty fails at European level," said Mr Horan.
"Sure, if you fight for what you want, you might not get it," warned Mr O'Reilly. "But if you don't fight, you'll certainly get nothing."
In an audience show of hands afterwards, it was 12 votes against, 16 abstentions, and not a single "Yes" - a pattern that could help deliver a "No" verdict if repeated in other working class districts.
Recent polls put the "Yes" vote at 47 per cent and the "No" at 35 per cent, with 18 per cent undecided, but privately "Yes" campaign strategists fear their opponents are building momentum that could tip the outcome against the treaty.
"The problem is that many working class and non-working people aren't interested in the economics of it," said one source close to the "Yes" campaign. "They see that as being above their pay grade."
The "Yes" camp had also hoped that France's Mr Hollande, who says Europe needs a state-led growth package hand-in-hand with the fiscal pact, might have wrung some concessions from Mrs Merkel during last week's European summit in Brussels. Instead, the German chancellor dug in her heels, dismissing calls for a "eurobond" which would allow all European nations to borrow at the same rate by effectively pooling Germany's creditworthiness with that of Greece.
The "No" campaign has also acquired the backing of Euro-sceptic businessman Declan Ganley, whose independent Libertas movement helped deliver a "No vote" to the first Lisbon treaty. According to the lecturer, Dr O'Malley, that could encourage Ireland's better off to say No too.
"The middle classes will not want to vote the same way as Sinn Fein," he said. "But the support of a well-spoken businessman like Ganley makes the No vote rather more respectable."
Indeed, the contest has now evened to the point where Dr O'Malley, in time-honoured Irish fashion, has put 20 on the No vote at his local bookmakers, who recently shortened the odds from 10:1 against to 5:1. The Yes campaigners might point out that if his bet pays off, the really big gamble may be on Ireland's future - and, ultimately, that of the euro itself