Jason OMahony - Irish political blogger, Irish politics, EU politics
 
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A No vote could bring change, but not necessarily the change you think.

Posted by Jason O on Apr 24, 2012 in European Union, Fiscal Treaty Referendum 2012, Irish Politics

There’s a repetitive nature to every Irish referendum on the EU. The Yes side, normally a centrist establishment, will make the usual “Yes to Jobs/Heart of Europe/Seat at the table/Send the right signal” arguments. The No side will run their standard “Vote No to change things you don’t like” position. But will a No vote change anything?

Quite possibly, but perhaps not in the way many on the No side suggest. Will a No vote mean that we will have no access to funds to plug our spending gap from the end of 2013? Again, possibly. The treaty says yes, but you can’t rule out the acrobatic legal suppleness of EU politicians. But let us suppose that it does rule out those funds. Then what?

Well, some months ago, I wrote that many former Yes campaigners were telling me privately that they were almost hoping for a No vote, because it would finally call the No side’s bluff in terms of cold hard cash to fund welfare and pensions. A No vote would lead to an emergency budget in 2013 that would be forced to finally implement the surgical amputation of a large part of our post World War Two social safety net and our public sector as a major employer in the state. This prospect has some on the economic far right rubbing their hands with glee, because not only will it be seen as not ideological but a fact of mathematics, but it will be irreversible. Think about it: We will be forced to close the spending gap through a mixture of massive spending cuts and to a lesser degree, through taxation. That means that in the future, if a left wing government wishes to reverse those cuts, it will have little choice but to raise taxation which is politically poisonous in what is essentially an economically libertarian country.

I am amazed that the hard left don’t see this. They will argue that the treaty will force cuts and tax rises by limiting borrowing anyway, which is true. But the difference is that EU funding will allow us to do it at our own pace, and make more pragmatic choices as the economy recovers. There will still be pain, but there will also be a controlled return to the bond markets and not the short, sharp heart attack of an instant balanced budget brought on through hubris on the hard left and to the secret delight of the economic far right.   

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