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5/31/12

Ireland votes on Europe's deficit-fighting treaty - by SHAWN POGATCHNIK

 Irish voters were deciding Thursday whether their government can ratify the European Union's fiscal treaty, a deficit-fighting pact designed to bind Ireland and other debt-hit eurozone members to much tighter spending limits. 


The agreement, already signed by the leaders of Ireland and 24 other EU nations, is designed to promote greater confidence in the eurozone by creating new deficit limits for each ratifying nation. Automatic spending cuts would be imposed on those deemed guilty of violating them. Germany, the eurozone heavyweight facing most pressure to keep bailing out its weaker neighbors, is the treaty's key backer but almost all Irish political parties have campaigned for its passage too.

All opinion polls in the past month's campaigning suggest that a majority will vote for the tougher budget discipline, but similar polls were proved wrong when Ireland voted to reject the EU's last two treaties in 2001 and 2008. Ireland is the only nation among the 25 requiring a national vote for ratification, although the treaty does not require Irish approval to proceed elsewhere. Results come Friday.
A "yes" verdict would have no immediate impact on Irish austerity policies, because Ireland already is committed to a severe program of cuts, tax hikes and asset sell-offs as part of its 2010 EU-International Monetary Fund bailout.

A "no" could do most damage to Ireland itself, because its existing loans will run dry by the end of 2013—and the treaty restricts future access to the EU's rescue fund to those nations that accept the new budget rules. But analysts agree it also would send political shock waves across a eurozone already doubtful that it can confine its debt crisis to the three bailed-out countries of Ireland, Greece and Portugal. 


Read more: Ireland votes on Europe's deficit-fighting treaty - San Jose Mercury News

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