Earlier this week, Irish Prime Minister Enda Kenny shocked Europe when he announced that Ireland will hold a referendum on the Fiscal Stability Treaty. This will make Ireland the only member of the European Union that will allow its citizens to vote on the controversial treaty.
There are many in Brussels who are disappointed by the Irish decision to offer its citizens a rightful say in what is an important part of Ireland’s future and economic well-being.
The Fiscal Stability Treaty that was agreed in December will, among other things, require EU member states to submit their national budgets to Brussels for approval and establish an EU bailout fund of €500 billion. It also requires a “balanced budget” rule to be placed into national legislation and gives the supranational European Court of Justice the right to impose sanctions on member states if this is not done properly.
Buried inside the treaty are rules regarding debt-to-GDP ratio requirements that will be impossible for most member states to meet—making this a self-destructing treaty from the start. The Czechs and the British have wisely decided that this treaty was too intrusive and undemocratic and decided not to sign up—for now. In particular, British Prime Minister David Cameron has shown bold leadership keeping Britain out of this deal.
The president of the European Central Bank, Mario Draghi, described the treaty as the first step towards fiscal union. If the treaty is anything like Draghi describes, then other European countries should be following the Irish example and giving their citizens a vote on the matter. Failing to do so ignores the democratic wishes of the people and proves that the EU is an undemocratic institution that is led by self-serving Brussels elites. It’s no wonder that a recent poll carried out by the EU found that only 31 percent of Europeans have a positive image of the EU.
Just 12 out of the 17 EU countries need to sign and ratify the treaty in order for it to become legally valid, so an Irish “no” vote will not kill the treaty but would essentially serve as an Irish veto on participating in the treaty—along the same lines as the U.K. and the Czech Republic. However, unlike the U.K. and the Czech Republic, which are not members of the Eurozone, Ireland does use the Euro. So a “no” vote in Ireland would cause uncertainty on the financial markets and even put the future of the common currency in doubt.
Ireland has a history of rejecting EU treaties through popular referenda, and the EU has a history of forcing subsequent referenda onto the Irish people until they get the answer that they want. Eurocracts did this when the Irish people voted against the Lisbon Treaty in 2008, and there is no reason to assume they would not do it again. German European Affairs Minister Michael Link has even admitted that the Fiscal Stability Treaty had been designed to avoid public referenda across Europe. This is a blatant disregard by the EU for democracy and the sovereignty of the nation-state.
In the long term, the Fiscal Stability Treaty is not likely to make a major difference to the current Eurozone crisis. This treaty is more of a stay of execution for the Eurozone than it is a solution to the crisis. In fact, the debt-to-GDP ratio requirement in the treaty is a time bomb waiting to go off.
An Irish “no” vote would be another nail in the Euro-coffin and may speed up the inevitable end of a project that was doomed to failure from the beginning. The undemocratic and desperate steps taken by Brussels to force this treaty onto the European people have hit a speed bump in Ireland. Sadly, it has not arrived at the end of the road.