Brussels, 01/06/2012 (Agence Europe) - On Friday 1 June, the Irish people gave the go-ahead for their government to ratify the fiscal compact (see EUROPE 10566). The turnout was low, at just over half of the electorate, some 60% of whom voted in favour of ratification. This will make Ireland the eighth member state to approve the fiscal compact (along with Denmark, Greece, Latvia, Poland, Portugal, Romania and Slovenia). The interest rate on Ireland's long-term debt fell on Friday on the news.
The fiscal compact was signed by 25 EU member states (all bar the UK and the Czech Republic), and will come into force in January 2013 as long as it has been ratified by then by at least 12 eurozone nations. Ratification of the fiscal compact has been made a precondition for any bailout from the European Stability Mechanism, the eurozone bailout fund due to come on-stream next month.
The positive outcome of the Irish referendum came as a relief to European leaders, who had feared that rejection of the fiscal compact would have been followed by calls for an abandonment of austerity in the country (and elsewhere). A no vote would have sent a strong political message as Greece prepares for its new general elections on 17 June.
Reactions were pouring before the final results had been announced. The president of the European Council, Herman Van Rompuy, said: “With this vote, the Irish people have given their endorsement and commitment to European integration. This result is an important step towards recovery and stability.” EU Research Commissioner, Màire Geoghegan-Quinn, said “International investors will now see Ireland as a safe and secure bet.” Welcoming the result, the president of the European Parliament, Martin Schulz, said: “The Fiscal Treaty is one element in the global strategy for the eurozone. Clear rules bring stability, but they must be accompanied by significant growth measures.”
“The citizens of Ireland have reaffirmed their commitment to a strong, unified Europe. With a majority voting in favour of ratifying the Treaty, they have said Yes to stability, Yes to debt reduction and Yes to economic growth”, said Joseph Daul of France, head of the EPP Group at the European Parliament. Guy Verhofstadt (ALDE, Belgium) said Ireland's austerity package was particularly painful, but would have been needed with or without the fiscal compact and voting Yes in the referendum was the only way that Ireland could receive any benefits when the full treaty comes into force. This was echoed by the Social Democrats at the EP, whose head, Hannes Swoboda of Austria, said: “The S&D Group and our sister party in Ireland have made it clear that the fiscal treaty should be strengthened by a growth pact. In our view, austerity has led the EU on the wrong path and we expect European leaders during their June summit to change the direction of Europe towards more growth and employment.” (MB/transl.fl)