Category: Asset 4Editorial

On a limb

May 16, 2012

By Staff Reporter

Taoiseach Enda Kenny is gamely sticking to the schedule for the May 31 referendum on the fiscal compact treaty even as Europe shudders and shakes amid uproar and voter backlashes against bailouts and the austerity regimes that are their consequence.

The latest voter riposte to austerity came in Germany, the inner keep of the euro. Chancellor Angela Merkel’s ruling conservatives suffered what has been widely reported as a humiliating defeat last weekend in elections which were held in Germany’s most populous state, North Rhine Westphalia.

Voters roundly rejected the austerity policies being championed by Merkel and her Christian Democrats and delivered a resounding victory to her pro-growth Social Democratic Party opponents.

The result, though it is not a national one and Merkel remains in place as head of government, mirrors the direction taken by French voters just days before when they voted in a new president, the socialist Francois Hollande, a strong critic of unbridled austerity.

With Greece again teetering on the brink of chaos, Kenny might well congratulate himself on his leading of a country that looks like a rock of stability in a eurozone that is looking uncomfortably like a deck of cards straddling a geological fault.

But Kenny’s steely determination to stick to the agreed script does not disguise the fact that the fiscal treaty is coming under increasing pressure in other eurozone member states and that the other participants at the end of the process might not necessarily be the ones who were on hand at the beginning.

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Still, holding the referendum regardless of what is happening elsewhere is probably the right thing to do, if only to allow Irish voters express their view on current fiscal policy and future fiscal direction.

An ironic twist to all this is that Ireland, so the government line went, risked being out on a limb if voters rejected the fiscal compact and its continuing doses of austerity. Now it looks as if the Republic might be out on a limb and at odds with their European neighbors, if voters actually approve it.



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