Tue, Sep 29, 2009 - Page 9 News List

Future of the EU hangs on vote in Ireland on Friday

A second rejection of the Lisbon Treaty by the Irish electorate later this week would plunge the EU into a renewed crisis

By John O’Brennan

On Friday, Irish voters go to the polls for a second time to decide whether to adopt the EU’s Lisbon Treaty. The mood in EU capitals is one of nervousness as polling day looms, with the future of the EU in the hands of Ireland’s unpredictable voters. On two of the last three occasions that the Irish have been asked to vote on an EU Treaty, they have rejected the proposal.

For the EU, the stakes could not be higher. The Lisbon Treaty was the compromise agreed by EU leaders in the aftermath of the rejection of the Constitutional Treaty in popular referendums in France and the Netherlands in 2005. Much negotiating blood has been spilled on the treaty, and its rejection a second time by Irish voters would leave the EU unable to ratify and implement its provisions; this would inevitably lead to policy paralysis and institutional decay.

The referendum campaign in Ireland has been seen a resurgence of conflict between a familiar constellation of forces. On the Yes side are all of the main political parties, trade unions, the business community and a broad network of civil-society groups. Their campaign has been more coordinated and intense than last time, with the aim of mobilizing the maximum number of supporters and ensuring a high turnout, which most commentators assume will assist the Yes side.

On the No side: a disparate coalition drawn from both the far right and the far left, including ultra-Catholics and unreconstructed Marxists, has sought to whip up hysteria about supposed threats ranging from military conscription to euthanasia and abortion. But the No side has struggled to find a coherent point of reference and seems to have none of the dynamism and vigor that it projected last time.

The main reason for this is that Ireland has been traumatized by economic misfortune over the past year. The hubris of the Celtic Tiger years is a distant memory, owing to the worst recession in Ireland’s history as an independent state. This year economists expect growth to contract by up to 8 percent, with a further steep decline likely next year.

The budget deficit is now the largest in the EU, and public debt has ballooned, as the government has struggled to compensate for the steep drop in revenues. The Irish banking system approached total collapse last September, and was only saved by a 400 billion euro (US$584 million) government guarantee of all bank deposits. More recently, the state assumed the liabilities of rogue property developers by setting up a “bad bank” which could potentially saddle Irish taxpayers with a mountain of debt for decades to come.

The depth of the economy’s plunge has helped the Irish government in its effort to secure a Yes vote. The European Central Bank has provided a monetary lifeline that has provided much needed liquidity within the financial system and helped the government to stem the crisis of confidence created by the banking collapse. Government ministers and EU representatives repeatedly cite the example of Iceland in pointing out what might have happened to Ireland if it had been outside the EU.

Thus, the second referendum campaign has brought back into play the economic dimension of Ireland’s EU membership, which was largely absent from last year’s debate on the treaty. Ireland has benefited disproportionately from EU largesse during its 35 years of membership, and, last year, was still receiving a net sum of 500 million euros from the EU budget. When voters are reminded of the potentially catastrophic cost of being excluded, not just from the Single Market area, but from the decision-making structures in the Council of Ministers and the European Central Bank, what is at stake in the referendum becomes clear.

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