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When Irish eyes aren’t smiling

With the Irish going to vote on the fiscal treaty, could the eurozone face a backlash from a bitter nation that has been battered by German-imposed hardships?

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Sinking or rising?
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Simon Miller
On 29 February 2012 10:24

Well that will set the cat amongst the pigeons.

The Irish Taoiseach Enda Kenny told the Dail that after legal advice the fiscal stability treaty will be put to a referendum as it had constitutional issues.

First things first, this will not stop the treaty. The pact only needs a quorum of 12 for the pact to exist. Politically embarrassing? Undoubtedly and it will be interesting to see how the Bundestag will react as Merkel was trumping up the stricter rules to assure German politicians that German money would not be wasted this time.

Although Germany is resisting attempts for it to increase its funding of the bailouts, it will make Merkel’s task even harder if she decides to get agreement from politicians to do so when there is one country not willing to play ball with German-imposed fiscal discipline.

Secondly, Ireland’s current bailout will continue but any further monies would have to come from the International Monetary Fund (IMF) as further eurozone bailouts are dependent on treaty participation. Granted it makes things harder for Ireland but not insurmountable.

Ireland has gone through the ringer to satisfy the demands of the Eurocrats and IMF. It has cut hard and fast and has seen unemployment rise, house prices take a 57 percent hit and emigration rising as the diaspora does what the diaspora always did and leave to find better prospects around the world.

   

But, and it is a cautious but, it appears to have worked. Ireland is seeing growth again, albeit from a lower base, and is on track to pull itself out of the bog.

And yet, there is a bitterness in the country that would have made for colourful language in the halls of Berlin and Brussels following yesterday’s announcement.

Ireland is paying through the hoop for its bailout money and has paid a heavy price to get itself on the right track. And yet it looks at the efforts to bring Greece back on board and wonders why the special treatment?

In addition, with many in negative equity, with no job prospects and a distrust of their own politicians - all main parties support the treaty - it is highly likely that the eurosceptics and Sinn Fein may find willing listeners for a no vote.

Like the UK, the Irish people were sold a pup with EEC entrance. Unlike the UK, the Irish constitution allows them to have a say, although this is on the whims of the “experts” in Dublin.

When the Irish go to vote, they will be bombarded with pro-treaty sentiment - if you think the BBC is bad, just watch RTE in vote time - and yet even if they agree with the treaty, they must pause and think about what the treaty means to Ireland.

Do the Irish want some bureaucrat to run their budgets for them? Do they want ever-increasing encroachment on their sovereignty? Because that is what will happen in the long run.

France and German have announced that they will converge their corporation tax, do you honestly think that they will allow Ireland to continue its highly competitive and successful low corporation tax policy? Of course they won’t.

And the effects could be dramatic. When the Irish government stopped tax credits in the early eighties, companies that had enjoyed the Dublin air simply packed up and moved to London, it was nigh-catastrophic for the economy and presided over a mass emigration not seen since the 1950s.

That may have been good for London but it was terrible for our brothers over the Irish Sea.

And despite our troubles over the years, they are our brothers. We all have links, be it friends or family, with Ireland and we should support them as the Chancellor pointed out last year.

The Irish government claims that this time round, the people will not have to vote again if they say no to the treaty. This is a time for the Irish to put a spanner in the works of an increasing Eurocratic system where the will of the people is simply ignored.

What effect this will have on the eurozone and Ireland is too early to tell, but when the Irish Premier signs the Treaty on Friday - that’s right, he will sign the treaty even though there has to be a referendum - I hope that the Irish eyes will not be smiling come voting time because it is time that Brussels finally listens to the people.

Simon Miller is the Editor of Financial Risks Today. He tweets at @simontm71

Read more on: Simon Miller, financial risks today, Ireland, Irish vote on Fiscal Union Treaty, FU Treaty, Enda Kenny, the Dail, Germany and Ireland, Ireland and the eurozone, IMF bailouts, eurosceptics in Ireland, Sinn Fein, and BBC pro Europe
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