Securing a 'yes' vote is crucial to our future

As is very often the case with EU-related referendums here, claim and counter-claim by both sides of the argument has left people scratching their heads as they contemplate how to vote on 31st May. With a huge rump of over 30 per cent of people apparently undecided as to how they will cast their ballot, there is much to play for on both sides of the debate. Claims of dishonesty and lies have been thrown about by the various protagonists as the temperature rises in the closing week of the campaign and, as a result, it has been difficult for voters to see a way through the haze of what is a complex issue to get to the nub of what is at stake here for this country. Essentially, what the Fiscal Stability Treaty boils down to is a series of rules to keep government budget deficits and public debts within tight limits and to allow Ireland to have access to the EU's emergency bailout fund, the European Stability Mechanism (ESM), which is a permanent backstop comprising about €700 billion to assist countries which get into financial difficulties. The 'yes' side argues that passing the treaty referendum will guarantee Ireland access to cheap money from the ESM, should the country need another bailout after 2013 when the current EU/ECB/IMF programme runs out. A 'yes' vote will also help to ensure stability and create confidence among international investors in Ireland. Those advocating a 'no' vote say the treaty will simply reinforce austerity in a bid to drive down deficits. They further believe that Ireland will still have access to emergency funding even if the Irish public rejects the fiscal treaty, although no-one is clear on where this money would come from and at what cost. The reality is that we face austerity one way or the other. The key issue is whether this country will be able to regain access to international funding markets after the current bailout programme runs out. Given the uncertainty currently swirling around Greece and Spain, Irish bond yields have shot up to 7.5 per cent in the past couple of weeks, making it unsustainable to borrow. Were market interest rates to remain that high at the end of 2013, the government would need another bailout in order to run the country and pay the salaries of nurses, gardai and teachers. Those on the hard left like anti-treaty campaign Richard Boyd Barrett claim Europe will continue to provide money to us even if we say 'no', citing the belief that the EU will do all in its powers to ensure Greece does not leave the euro because of the risk this would pose to the single currency and the contagion effect that would spread throughout the continent and beyond. Therefore, he argues, Ireland should call Europe's bluff and reject its new rulebook - it will still give us money because it cannot risk further instability for the shared currency. Mr Barrett could possibly be right, but the Irish electorate must ask itself: is it worth the risk? Do we really want to play a game of Russian roulette with Brussels and, at the very least, risk a major crisis of confidence in Ireland, or at the very worst, a catastrophe that could ultimately see the country unable to access funding, defaulting on its debts and exiting the eurozone? Looking at Greece right now should be enough to make people realise the kind of dangerous territory we are in. In looking at the treaty referendum as dispassionately as it is possible to do, its most important aspect is the ESM and access to it. As we emerge from the current EU and IMF programme next year, Ireland will still have a funding gap of €36 billion for the years 2014 and 2015. While it is the government's intention to return to the international capital markets by then, circumstances may dictate that we cannot. Thus, the importance of access to the ESM funding to run the country becomes critical. The Irish people now find themselves at a crossroads: either we vote 'yes' to the treaty, aiding economic progress and financial stability, but also accepting that additional austerity measures will be needed, or we vote 'no' and face into an uncertain financial and economic future with likely major consequences for employment, investment and access to financial markets. In these circumstances, the only sensible outcome is to secure a 'yes' vote.