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Ireland backs EU treaty with 60.3 pct 'yes' vote

By Shawn Pogatchnik

Associated Press

Published: Friday, June 1 2012 9:34 a.m. MDT

DUBLIN — Ireland's voters have agreed to ratify the European Union's deficit-fighting treaty with a resounding 60.3 percent "yes" vote, final referendum results Friday showed, but government leaders and pro-treaty campaigners alike expressed relief rather than joy.

The treaty's approval, after weeks of nervousness in Dublin and Brussels, relieves some pressure on EU financial chiefs as they battle to contain the eurozone's debt crisis. But critics said the tougher deficit rules would do nothing to stimulate desperately needed growth in bailed-out Ireland, Portugal and Greece, nor stop Spain or Italy from requiring aid too.

"The question now is where will the jobs and the stability they have promised come from, against the backdrop of a continuing and deepening capitalist crisis within Europe?" said Joe Higgins, leader of Ireland's Socialist Party, which opposed the treaty. "Their policies will only make the situation worse."

The result of Thursday's referendum represented a surprisingly strong victory for the government of Prime Minister Enda Kenny, which courted unpopularity by insisting that Ireland — already four years into a brutal austerity program that has slashed 15 percent from many workers' incomes — had no choice but to vote in support of yet more cuts and tax hikes.

And when the official result was announced in Dublin Castle, victorious campaign officials engaged in none of the cheers, shouts and hugs normally associated with the occasion. "There was nobody from the 'yes' camp jumping up and down," observed Gerry Adams, leader of the Irish nationalist Sinn Fein party, which campaigned against the deal.

Government ministers emphasized that voters' anxiety about the parlous state of the economy — with unemployment stuck on 14.3 percent and hundreds of thousands of households trapped in negative equity — colored their every step on the campaign trail.

"The astonishing thing about this campaign was that lots of people voted yes with a heavy heart, and many voted no with a heavy heart. Both sides were really concerned about growth and employment," said Ireland's minister for social protection, Joan Burton.

Overall, about half of Ireland's 3.13 million registered voters participated in Thursday's referendum, typical in an officially neutral country that is constitutionally required to hold a referendum on each European treaty.

Public rejection could have blocked Ireland from receiving new EU loans once its 2010 bailout money runs out next year. It also would have sent political shockwaves through other eurozone members, where anger against austerity and bank bailouts runs similarly high but citizens are denied the chance to vote on the treaty.

During the campaign, Kenny warned that rejection would mean even worse austerity, because Ireland would suffer more credit downgrades and lose its key EU source of funding.

The treaty, signed in February by leaders of 25 countries including Ireland, proposes that all members who ratify it should reduce their annual deficits to no more than 0.5 percent of gross domestic product. The current eurozone limit is 3 percent of GDP. Ireland is committed to cutting its way back to that level by 2015.

Opponents of the treaty argued that the new 0.5 percent deficit limit would force Ireland to keep cutting until perhaps 2020, when greater state investment to stimulate the economy was required. The government countered that much would depend on whether Ireland could keep growing its economy against the tide of austerity.

Ireland has recorded a faint pulse of growth over the past year thanks to strong exports by nearly 1,000 foreign high-tech companies based in Ireland. But the domestic economy, with unemployment stuck on 14.3 percent and hundreds of thousands of households mired in negative-equity mortgages, has shrunk for four straight years.

Ireland has posted the EU's worst deficits since 2009, including an EU-record 32.4 percent in 2010 and 13.1 percent last year. Both figures were greatly inflated by the exceptional costs of Ireland's decision to nationalize five of its six banks rather than see any collapse — a debt burden that pushed Ireland itself into the bailout zone in 2010. Repayments to international bondholders, central banks and interest on decades-long loans are expected to cost Ireland's taxpayers €68 billion ($85 billion), equivalent to €19,000 ($23,500) for every man, woman and child.

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