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From The Socialist newspaper, 6 June 2012

Ireland: Austerity Treaty

Pyrrhic victory for the political establishment will rebound

The 31 May referendum on the Fiscal Treaty in Ireland was passed by a 60/40 margin on the basis of a turnout of 51%. The Fiscal Compact Treaty includes a series of budgetary rules which institutionalises austerity and further erodes democratic rights by significantly increasing the powers of the European Commission. Socialist Party in Ireland reporters examine the vote and future perspectives.

In the referendum big business interests and EU 'leaders' demanded a 'Yes' vote. Working class people in Greece and many other countries, who increasingly see the need for a united struggle against austerity and capitalism throughout Europe, hoped a 'No' vote would give an impetus to such a struggle.

However, the result cannot be taken by the government as a major victory or as an endorsement of austerity. As one government minister admitted, those who voted Yes did so with "extreme reluctance" or as the editorial in the Sunday Independent commented: "Far from being a vote of confidence in Europe, or the government for that matter, the sullen Yes this referendum secured from a grudging citizenry was an act of despair."

The Socialist Party and its most prominent public representatives, TDs (MPs), Clare Daly and Joe Higgins and MEP Paul Murphy, fought a strong and effective campaign and this was commented on by many.


The Yes campaign was based on threats and blackmail. The text for the Fiscal Treaty was agreed last summer but in February an addition was made which said that only countries who accepted the Fiscal Treaty would be able to access funds from the soon to be established European Stability Mechanism (ESM). The ESM is the new fund of €700 billion to bailout bankers and speculators and create a stable euro.

This blackmail clause, which was supported by the Irish government, was a gun to people's heads to vote Yes, or face a ruinous financial collapse.

People were threatened that without sources of funding/credit there would be immediate catastrophic austerity in 2014, much worse than anything up until now; that the Budget due this December would also be much worse if there was a No vote; that a Yes vote would result in stability, investment and jobs but a No vote would cause the opposite etc.

Many media commentators did the bidding of the establishment and helped focus the whole debate on the funding issue, avoiding a real discussion on the actual contents of the Fiscal Treaty and the effects of austerity.

The result is also a comment on the current mood and general political consciousness. There is a near universal understanding that austerity is bad for the economy and there is a broad mood against it, as seen in the recent organised and active opposition to the household tax. That mood is strongest among the working class and those most affected by the huge cuts, new taxes and austerity of the last years.


However, for significant layers, including the middle class and some better off sections of the working class, the fear of austerity was trumped by the greater fear of potential financial collapse when the current EU/IMF bailout programme finishes. While many didn't fully believe the threat that the EU would withhold funds if there was a No vote, they plumped for what they thought was the least risky option.

The Fine Gael/Labour coalition government even tried to incorporate François Hollande's presidential victory into their campaign, peddling the idea that austerity can go hand in hand with growth and claiming that significant growth packages were in the offing, once the Treaty was passed.

On the other hand they pointed to the economic collapse and instability in Greece as a consequence of struggling against austerity and non-observance of the bailout conditions.

The absence of an understanding that there is an alternative to the diktats of the markets and capitalism, or the possibility and plausibility of socialist policies, also affected people's confidence to vote No. This was made much worse by the acquiescence of the trade union leaders for the last 25 years but in particular their refusal to launch any struggle against austerity.

Hardening opposition

Taking all of these factors into account, the fact that 40% voted No is significant. The Yes vote was based on strong majorities in middle class areas, including large votes in rural/farming areas. In contrast tallies indicate that in many towns and in many working class districts in the cities, the No votes were as high as 70%, 80% or even 85%.

Fine Gael Taoiseach (prime minister) Enda Kenny and others once again promised that there would be an economic recovery during the campaign. However, the economic and debt crises in the eurozone are getting worse and will expose the government's false promises.

Kenny has also stated definitively that there will be a deal with the EU to reduce the unsustainable and crippling bank debt.

As it becomes clear that there isn't a recovery, that there isn't a reduction in unemployment and that any changes in the bank debt will be dependent on new vicious austerity attacks, Ireland will be wracked by the kind of instability that the establishment say they are so desperate to avoid.

With more austerity and a deepening capitalist crisis, there can be a dramatic change in terms of what people see as what is possible and necessary and a real answer. People will be less susceptible to diktats, intimidation and manipulation and much more open to hear real and radical solutions, including socialist policies.

Political fall-out

This isn't a major boost for the government. On the other hand if they had lost the referendum, they would have been dramatically weakened. To get the Treaty passed it made promises that it will not be able to fulfil, and so the undermining of the government will speed up as the crisis persists and worsens.

The Labour Party in particular is experiencing a decline in its support. After just over a year in power it has already lost nearly 50% of its vote in a recent opinion poll. There have been many reports of Labour getting a rough and hostile ride in working class areas during the campaign. This pressure on and inside Labour is likely to get much worse.

Even though on the losing side, the main beneficiaries from this campaign will be Sinn Féin and the United Left Alliance, the two main forces on the No side.

Sinn Féin got a lot of media coverage on the No side and their campaign had an impact. They based themselves on opposition to austerity and chose to emphasise that more than turning the attacks on democratic rights into a sovereignty or national rights issue. They implied that a better deal could be wrung from the EU and limited their overall criticisms of the EU and the system.

The Labour Party ironically tried to expose that while Sinn Féin are supposedly trenchantly opposing austerity in the south, they are imposing vicious austerity in the north. However, the truth of Sinn Féin's hypocrisy was lost as Labour, of all people, had no credibility in making this attack and it had no impact.

It is still the case that there are working class people who will not in any circumstances vote for Sinn Féin. However, at the same time it seems that Sinn Féin is likely to be the main beneficiary of the political crisis embracing all the traditional government parties, unless a real, genuinely left and working class alternative can be built.

The issue is, can the conditions develop for the launching of such a left/socialist force in advance of the impending social and political explosion? In this, how the struggle against the household tax will unfold can be of crucial importance.

Socialist Party

The Socialist Party went into this campaign in a stronger position than previous European referendums. TD Clare Daly performed very strongly in a whole series of appearances and debates, which included prominent government spokespersons and ministers.

This referendum was particularly important for MEP Paul Murphy. Numerous commentators have referred to Paul as one of the most capable and articulate representatives of the No side.

In March, and then again during the campaign in May, the party arranged for leaflets to be dropped into every household in Dublin, well in excess of 400,000 homes. The Socialist Party also organised mass leafleting in key working class communities in Cork and in many other towns and cities.

Party members put up posters from the household tax campaign and from the United Left Alliance. However, it was the Socialist Party's own posters and billboards that had a real impact in the campaign and provoked much comment. Saturday's round-up of the campaign in the Irish Times referred to the Socialist Party's "ubiquitous referendum posters".

The campaign provided a very good platform from which the Socialist Party and the United Left Alliance can grow.

The struggle against the household tax is likely to develop as it appears that the government and the councils will try to bring people to court. 50% of households have not registered. Then we will have a huge opportunity to fully put this vote to the side and to build a movement that can really fight this government, the EU and their austerity.

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In The Socialist 6 June 2012:

Fight the cuts!

NHS cuts... Pension cuts... RESIST CUTS!

National Shops Stewards Network

Liverpool TUSC: Standing against Labour's cuts

Tory leader chauffeur driven while slashing services

Children still getting raw deal

Socialist Party news and analysis

Energy bill puts profits before the planet

Andy Coulson charged with lying

Youth unemployment sky-rocketing

Them & Us

International socialist news and analysis

Syria: Is there a way to avoid a bloody civil war?

Ireland: Austerity Treaty

Socialist Party reports and campaigns

Fighting cuts and sexism at Newcastle's Slutwalk

Heathrow protest against warmonger Rajapaksa

We won't be a lost generation - Fight for jobs and education!

Campaigning for EMA and youth services

Disabled people's organisations condemn views of Tory minister IDS

A royal debate in Lincoln

Socialist Party workplace news

DVLA workers strike to defend services

Solid strikes show that Veolia privatisation is rubbish

Support Churchill cleaners on Tyne & Wear Metro

Leeds university Unison - Save our pensions!

Privateers not welcome at Sussex University

Workplace news in brief

Reviews and comments

Britain's hidden homeless

Why I joined the Socialist Party


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