Sun, Jun 03, 2012 - Page 11 News List

Irish back fiscal pact with clear majority

EUROZONE BREATHER:Leaders across Europe hailed Ireland’s decision to accept the austerity pact, no doubt hoping it would set an example for other countries to follow


Irish Prime Minister Enda Kenny, left, and Irish Deputy Prime Minister Eamon Gilmore adress the media outside government buildings in Dublin on Friday.

Photo: AFP

Irish voters have backed the EU fiscal pact by a large majority, final referendum results showed on Friday, in what Prime Minister Enda Kenny hailed as a “powerful signal to the world.”

Sixty percent of voters were in favor of Ireland ratifying the pact, which is designed to shore up the turmoil-hit eurozone by penalizing countries that fail to keep their deficits in check.

“The Irish people have sent a powerful signal around the world that this is a country that is serious about overcoming its economic challenges,” Kenny said after the final ballots were counted.

“The clear and decisive verdict of the Irish people will help to create the stability and certainty that investors in Ireland need.”

The result comes as a huge relief to Kenny’s debt-laden government as only countries that ratify the pact will have guaranteed access to the EU’s new permanent bailout fund.

It will also spare the EU a headache, as a “no” vote could have fueled a growing backlash in Europe against austerity measures.

EU President Herman Van Rompuy hailed the vote as a key step towards Europe’s economic recovery.

“This result is an important step towards recovery and stability,” he said in a statement.

German Chancellor Angela Merkel welcomed Ireland’s backing of the fiscal pact as “good news for Ireland and Europe.”

Ireland was forced to accept an 85 billion euro (US$105 billion) bailout by the EU and IMF in 2010, and the “no” camp sought to harness public anger against the spending cuts and tax rises brought in as part of the deal.

Opponents labeled the fiscal pact an “austerity treaty” as it empowers the EU to fine countries that overspend.

Kenny said he had spoken to Merkel, French President Francois Hollande and Spanish Prime Minister Mariano Rajoy on Friday about “a number of issues” arising from the Irish “yes” vote.

Although pre-referendum opinion polls had predicted a clear victory for the “yes” campaign, only half the 3.1 million-strong electorate turned out to vote, raising fears that the low turnout could help the “no” camp.

However, most voters appeared to accept the government’s warning that if Ireland did not ratify the pact, it would not be able to access the European Stability Mechanism (ESM), the permanent rescue fund that comes into force next month.

Ministers have warned that they may need to access the ESM when Ireland’s current bailout package — which it required after its property bubble burst and the economy came close to collapse — expires next year.

Sonia Pangusion, analyst for Ireland at IHS Global Insight consultancy firm, said the “yes” vote was “good news for the future of the country.”

“It sends a positive message to the markets — a message that Ireland is determined to be part of the euro, assuming all the painful consequences of such decision.”

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