Gianfranco Baldini - 04/06/2012

     This time the Irish have said Yes. In 2008 they had opposed the Treaty of Lisbon, in 2001 that of Nice. Ireland is the only EU country where each new European treaty must be ratified by means of a referendum. This time the vote in favour has been a clear-cut winner (60% to 40%), even if the turnout was just 50%. The stakes were different: if the No had won the stability treaty would have still gone ahead and the consequences would have been “domestic.” As compared with the two No votes that slowed down the integration process, today’s Yes is consent to aid and to the austerity policy that the country is still in great need of to emerge from the economic crisis, triggered off in that context above all by the repercussion of the property bubble in the property sector.

     The forecast on the eve of the vote have been respected. Actually, the margin of victory is wider than forecast, seeing that until a few days before it was feared, in spite of the prevalence of votes in favour, that the many undecided voters might lead up to a victory by a hair’s breadth. The parties supporting the No, that is Sinn Fein and the Socialists, have stressed the slogans that had worked in the previous two negative referendum results. As in 2008, this time as well the millionaire Declan Ganley took sides with the No. Formally withdrawing from politics after Libertas, the party he had founded, did not manage to get to Strasbourg in spite of a 13% vote at the European elections in 2009, Ganley has taken an active part in the campaign, but has clearly not been successful in replicating his result of 4 years ago.

     The three main parties, Fine Gael and Labour on the one hand (which were in office in the coalition led by Enda Kenny) and Fianna Fail on the other, were solidly behind the Yes vote. These days in many European countries this would have led to a coalition of the widespread anti-establishment sentiments. Not in today’s Ireland, which has granted a resigned Yes rather than its enthusiastic consent to the fiscal compact. And that according to many can hold some important lesions for the countries in greatest difficulty, namely Greece and Spain.

     If just one year ago the crisis appeared to be very serious, the Irish governments, paying the price in terms of popularity, have been courageous, daring to give the banks respect, more than what the Spanish government seems willing to do today. The nationalisation of the banks in great difficulty has indeed brought about a striking surge in the deficit, reaching astronomical levels, but has reassured the investors and the multinationals that had settled in this country in the nineteen eighties and nineteen nineties, thanks to what even today is the lowest corporate tax system in Europe. The country has been rocked, the previous government was pushed out of office (also because of many scandals) in the February 2011 elections, but the businesses have not left. And the arguments put forward by the No, which also rested on the recent Socialist victory in France as an element of strength against the fiscal compact wanted by Merkel, have not managed to have an impact.

     The geography of the vote has revealed some interesting data. Out of 43 constituencies, the No won in just five, rather narrowly at that: three of the 11 of Dublin and two of Donegal, in the northernmost point of the island. These same constituencies had voted No even in the two referendums cited at the beginning. In general, the Yes has won as much in the cities as in the many rural districts, even if in the most working class constituencies the No got most votes.

     As the early comments have highlighted, this time the Irish vote chiefly had a domestic character. That it, it is true that it would not have undermined the progress of the budget underwritten a few months ago, but the political signal in the case of a prevalence of No votes would have nonetheless been very heavy. In these troubled times the Greek spectre has certainly played a major role, and it is on this fear that the Yes vote supporters based a part of their election campaign.

     This is, however, just a small important step for the country’s recovery. After the vote, Kenny immediately asked Merkel to take less binding decisions on the recapitalisation of the banks. And on this aspect as well the Chancellor seems determined to concede very little. So June starts with a positive political signal, as we await the double vote for the French Parliament, from which it will be possible to understand what type of majority supports Hollande and, above all, the new Greek elections.

Gianfranco Baldini
(University of Bologna)