Ireland starts counting votes in a referendum on an EU financial treaty that could undermine one of Europe’s key initiatives as problems mount in Spain and Greece.
With Greece, Portugal and Spain on the brink, Ireland begins counting ballots on Friday in a referendum widely viewed as a vote on government austerity measures.
“What is at stake is the future of the country,” said Maire Geoghegan-Quinn, Ireland’s most senior official at the European Commission.
The Irish debate centres around a clause in an EU treaty stating that only those countries who sign up to the treaty can access future European bailout money.
Dublin has been largely successful in implementing its 85 billion euro bailout from the International Monetary Fund and European Union, but voters with austerity burn-out are angry at 14.5 per cent unemployment, falling property prices and the government’s handling of the economy.
A “yes” vote means financial stability but at the cost of additional cost-cutting. A “no” votes means an uncertain future for Ireland, which depends on the multinational companies that employ one-third of its workers and financial assistance from the IMF and EU.
“There was a time when Irish citizens could play games with issues of enormous moment and get away with it. This time has gone,” the Irish Independent newspaper, said in an editorial urging a “yes” vote.
The referendum is Ireland’s third on Europe in four years. Polling stations closed at 9pm GMT (10pm BST) on Thursday and vote counting was to begin at 8am GMT (9am BST) on Friday with results expected late Friday afternoon.
“At the end of the day, we will accept the outcome and one single action isn’t going to straighten out this mess,” said Sinn Fein leader Gerry Adams, whose party endorsed a “no” vote.
“But a strong ‘no’ vote, or indeed a victory for the ‘no’ vote, will set a different direction for this government and will send a very, very clear signal that this state joins with people in France and Germany and Greece – and right across the European Union – demanding an end to austerity.”
The vote was still too close to call on Thursday with polls showing 30 per cent of Ireland’s residents were undecided. It is unclear whether Ireland, like Greece, would consider leaving the Eurozone and opt to go it alone if there is a resounding “no” vote in the referendum.
“If there’s a club and (Ireland) want to be a part of that, well .. you join the army, you wear the boots. We would be rejecting that, and I think while that would be attractive from a national pride prospective is it a pride we can afford?” said Irish economist and Trinity University Professor Brian Lucey.
Financial markets eagerly await the outcome.
“We would expect there would be a sharp sell-off of Irish government bonds if there’s a ‘no’ vote,” Owen Callan, senior economist at Dublin-based Danske Markets told Channel 4 News.
Mr Callan is banking on a “yes”, however, noting Ireland’s reputation among market traders as the “austerity poster boy” for hitting all of its IMF deadlines and targets. He expects two-year Irish bonds at 6.25 will fall to 4 per cent as economic confidence rises.
While the German-led plan for stricter budget rules needs the approval of only 12 of the 17 euro-zone countries to be ratified, an Irish rejection would ignite an already fraught situation with problems mounting in Spain and Greece.
Some Irish “no” campaigners reject the doom-and-gloom scenario the Irish government has painted if “yes” campaigners lose the referendum.
“A disorderly default by Ireland would be extraordinarily expensive,” Terrence McDonough, a National University of Ireland, Galway economist, said, “It is completely unthinkable that Europe would shoot itself in the foot in this way in order to discipline or make an example of the Irish electorate.”