Do the govt need a No vote in #euref…

..and, to provide similar political cover, does the No side need a Yes vote?

The only thing that is clear from the lead-up to the referendum on Thursday is that neither the changing political and economic context of the Austerity/Stabilitytreaty nor it’s relatively bland content has really generated much energy, despite the ramifications of ratification.

The value of referenda has been disputed on here before. Indeed, Minister of State Leo Varadkar suggested that referenda were not democratic at the start of the campaign, as he: 

… would be concerned that it would turn into a referendum on extraneous issues such as septic tanks, bondholders, banking crisis or decisions being made by the Government, such as cutbacks.

Ironically, given that state budgeting and finance underscores social policy and structural and strategic decision-making, there are few issues which could not be potentially linked in to the central theme of achieving the required levels of structural deficit and budgetary discipline.

But a campaign which began with contradictory messages (see Vincent Browne’s piece in the Irish Times) doesn’t appear to have enlightened people very much as to what they are voting for or against. Overall this may retrospectively be viewed as simply more displacement activity around the various crises which are afflicting the eurozone. A certain amount of local apathy will probably be reflected in a relatively low turnout on Thursday: with a narrowing of the margin in some polls, this could still mean that it will be decided by the side which has managed to mobilise it’s vote better.

(Personally, I think the changing context alone is sufficient to warrant a No vote since, despite all the claims being made by proponents of a Yes vote, there are no guarantees that the Treaty will not be amended by the time it comes into force on 1st January 2013, which would then require another referendum. Not many other states appear to be in a particular hurry to ratify it, with only 3 of 25 having done so thus far. The latter factor should have set off alarm bells by now.)

In that regard, with the end of the troika’s programme in 2014, the state will either have to return to the bond markets, massively cut government spending, or, seek a second ‘bailout’ programme. While the Yes side have claimed otherwise, any other eurozone state can veto an application to the ESM, so even a Yes vote will not resolve the funding problem that will be caused by the debt overhang toppling back onto the state’s day-to-day finances. No-one is making a public pretence that the state will have a balanced budget by 2014 (again, despite the vote taking place in a couple of days, there is still no detail or small print on when and how the penalty mechanisms in the Treaty would operate or kick in if it doesn’t). 

In reality, though, much of this referendum is superfluous. The Treaty and the problems it sought to address are now historical, as the problems in Spain and the Spanish banks are begining to manifest themselves and the quantum of resourcing required to ‘resolve’ a Spanish funding crisis are only talked about in billions because it still seems politer to refer to them in terms such as 700 billion than 0.7 trillion. And ultimately, the ‘Republic’ of Ireland is not large enough to be a central focus of any actual resolution of the financial crisis in the eurozone. If it is lucky, it may eventually benefit from a solution. 

In the meantime, Yes or No, the wider monetary context is liable to be unchanged, and any of the negative consequences being forecast by both camps could come to pass. In that regard, losing this referendum might even be preferable to both sides in the medium term as it would conveniently shift the blame for the further cuts, declines in growth or even contractions that will happen as the scale of the Spanish banking crisis (or another Italian or Greek problem) unfolds. Politically, Fine Gael have already an insurance policy of sorts as they have let Fianna Fáil’s leader take more of a role promoting a yes vote, although the distinction between the parties has blurred further. Beyond some liberal social policy, there is less and less leftist mark-up language in the Labour script and party strategists cannot be overly comfortable with the limited oxygen that was available on the yes side, or, the future political damage it might sustain if a successful Yes campaign’s claims are subsequently exposed as flawed. Sinn Féin have gained about as much as it can from this campaign: not just in opinion polls (which have only a limited currency) but also in more high-exposure field-testing of its front bench. At the same time, it needs to consider how to position itself if it has designs on a place in the next coalition and find issues with more common ground for confidence-building with some of the other parties (watch for this as the next local government election campaigns unfold).

The most likely change that will occur in eurozone policy won’t come from a Yes or No vote in Ireland: it will come from electoral change in Germany. In the meantime, the referendum will simply fill the vacuum created by the political and economic inertia.

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  • Mick Fealty

    I agree in principle that it is being overtaken by events… Whether its history or not remains to be seen. I’m also not sure we have the luxury of waiting for a change in the German government.

    Agree re SF’s profile building for the front bench, despite the fact that I’d judge it a poor campaign overall. Confirms my top three: Mary Lou, Pearse, and Eoin O’Broin.

    Didn’t see much of David Cullinane, and Peadar Toibin and Pádraig MacLochlainn both found themselves stuck the mud for various reasons. Toibin because I think he genuinely struggled with delivering poor arguments and Pádraig for blowing up spectacularly on #TWIP.

    That said and done, given the Yes side actually took the campaign seriously this time I think a No would be of some limited renegotiation value. But I don’t doubt they want a Yes.

    At the very least
    , even a temporary disruption of FDI investment, which is so critical to Irelands current inflow of jobs, would screw Government’s timetable for recovery. For that reason, I don’t think they want the ‘cover’. The No side on the other hand…

  • John Ó Néill

    The HPs and Dells of this world suggest that FDI will go anyway if the balance sheet suggests it.

    I thought Toibin did alright in debates, as did Cullinane (MacLochlainn was a late sub for Doherty on TWIP but I’m not convinced by him yet anyway). Oddly, a no would force an apparently inert government to consider a new deal to try and get a yes second time around. If Hollande gets a deal on a Tobin tax and Corporation Tax, the Yes side could look daft.

  • Take a look at Zizek’s comment in the London Review of Books. He puts the logic of a ‘No’ vote in an interesting context, given his reading of the Greek dilemma.

  • Mick Fealty

    Well, that’s more or less what Micheal Martin’s been arguing…

  • I think both sides want a Yes vote.
    And both sides want it to be close.
    If I had a vote….and I dont, I would vote No… the expectation (if not quite “hope”) that the result will be Yes.

    Yes is Pragmatism.
    No is making a (futile) stand against…..Something.
    Hobsons Choice. Over a barrel. Gun to our head. Put it in any way but politics is always a choice between Self Interest and Principle.
    We can afford a “normal” (Id claim) Left/Right split over self interest and principle in “normal” times. These are not “normal” times.
    The self-interest here is that a Yes vote is probably in the economic interests of the nation.
    The principle is telling Merkel, the Germans, the eurocrats, the bankers where to get off.
    And the pragmatism is that even with a No vote, the Government and its European “partners” will find a way to turn No into Yes.

  • Mick Fealty

    SActually I agree on your first but the priniciple only becomes clear if you look the problem unambiguously in the eye. Are you in favour of the European project or are you not?

  • John Ó Néill

    Mick – is there a European project anymore?

    It looks more and more like a Germano-centric economic zone where state-level public policy is subordinate to German fiscal health, even if that is to the detriment of the state. Cheap lending to Spain propped up another property bubble creating a pipeline of mortgage lifetime payments to the lenders (ultimately German). No risk to the lenders as the EU will force Spain to underwrite the banks and re-organise Spains economic and social policies to do so (does this sound familiar).

    Culturally, in governance, judicially and socially, there may be, but there is no European project in a fiscal sense.

  • Mick Fealty

    There is indeed.

    It is a severely flawed one for sure, not least because of a democratic deficit people seem either unable or unwilling to deal with…

    But despite all the jokes about Germans the EU does still exist… How do you think Ireland got all that debt in the first place… And where does the cash in your pocket spring from?

  • Me?
    I am absolutely 100% against the European “project”.

  • Greenflag

    ‘But despite all the jokes about Germans the EU does still exist’

    And will continue to exist despite the inherent mismatch and contradictions between peripheral and core countries .

    ‘ does this sound familiar’

    It looks more and more like a London-centric economic zone where state-level public policy is subordinate to London’s financial centre’s fiscal health, even if that is to the detriment of the peripheral regions of the North of England , Scotland , Wales and Northern Ireland . Cheap lending to colonial suppliers of raw materials propped up the world financial centre of London from the mid 19th century creating a centuries long revenue stream to the city to the bankers , insurance companies etc etc (ultimately British). No risk to the lenders as the Empire would force supplier countries to keep the city supplied with finance and re-organise colonial economic and social policies to do so (does this sound familiar) if necessary -think China opium trade, Indian textiles etc etc

    So the Germans are aping the former Brits while the Chinese are aping American red toothed capitalism of the gilded age .

    Meanwhile the free market continues to emisserate the western middle classes as North America more and more resembles the South American pattern of almost all of the wealth being channelled into the hands of a small minority .

    It won’t last and can’t . The system will break sooner or later from within or without and ditto for the EU countries. Democracy has become plutocracy and economic policies are pursued solely to benefit the plutocrats and their political puppets 🙁

  • Greenflag

    Meanwhile at the LSE Paul Krugman critics the EU and the UK for their fiscal cutbacks . It’s the fallacy of composition time again folks .What’s good and sensible practice for individuals is not good for the economy as a whole in recessionary times .
    He has a point -With interest rates at an all time low in theory at least business should be investing and expanding in the USA and UK .While there are some signs of a weak recovery in the USA the UK is facing into a double dip recession .

  • wee buns

    John – it’s conceivable that Enda, not having the courage to even ASK for the debt write down, would be rather relieved if the people vote No, as he could retain his goody-goody leader image in Europe, who is saddled with a pesky upstart population…

    I’ll be voting NO today.

    A No vote does not prevent us from living sensibly.

    My primary reasons for a NO vote = because of articles 25 -36 – which contain the assertion that the ESM shall enjoy ‘immunity from legal process’ and ‘inviolability in respect of their official papers and documents.’

    No accountability on the part of ESM, in other words.

    Yet it requires ratifying states us to pay up unlimited assets within 7 days.

    The enlightened county of Tir Conaill shall reject this proposal outright.

    Unfortunately the rest are suckers for notions of ‘certainty’ where none exists.