Ireland's austerity D-Day: How much pain can it take?

After years of savage cuts, the Irish now face a stark choice: do they hand over control of their economy to Europe – or go it alone without the safety net of future bailouts? In Cork, David McKittrick meets the people preparing to vote


The opinion of Niall Daly, who runs the Chocolate Shop in Cork's English Market, sums up why Ireland looks set to vote in favour of the new EU fiscal treaty in its referendum tomorrow. "I'm leaning towards voting Yes, but definitely with a heavy heart," he said. "The No campaign haven't convinced me that we'll have access to money at a reasonable rate should a second bailout be necessary."

Ireland is the only nation to hold a referendum on the treaty, which was drawn up in March in response to the eurozone debt crisis. If Ireland votes Yes to the fiscal pact, it would have to abide by strict new budget rules, allowing Europe more power over its economy. If it votes No, it would be denied another bailout if needed.

Although the pro-treaty people are out ahead, there will also be a substantial No vote fuelled by a general wave of anger and disenchantment. In Ireland, strict austerity, which has caused much pain in cuts and taxes, has been the order of the day since its €85bn (£68bn) bailout in 2010.

That anger has been of huge political benefit to Sinn Fein, whose anti-austerity and anti-European stance has tripled its opinion poll support in five years. But most traders in the bustling Cork market, which is experiencing a surge of tourism since the Queen's visit a year ago, support the fiscal treaty.

"I'll be voting Yes," Joe Hegarty, of Heaven's Cakes, said. "We've no other option, have we? People have taken the hardship, piece by piece, and they're just getting on with it."

A third trader, Tom Durcan, said: "A Yes vote will assure us we'll get through the mess we're in at the moment. The No voters are voting No just as a stance against the current climate."

Just two businessmen, neither of whom wished to be named, said they will vote No. "The government told us we don't need a bailout but now they're saying that if we vote No we won't get another bailout," one of them said. "I've absolutely lost faith in them. I don't think they're capable." A colleague agreed: "The way it's being presented by the Yes people is virtually insulting. The idea that there would be absolutely no other alternative source of funds is facile, it's simply not true."

The government hopes a second bailout will not prove necessary, but claims a No vote would endanger that possibility. Prime Minister Enda Kenny said: "I understand the pain that people have endured and the daily desperate anxiety that is being faced by people whose household budgets have become an enormously difficult balancing act. But the treaty offers us a vital insurance policy and the fact is that there is no other certain source of those funds."

The Justice Minister, Alan Shatter, made the same case, adding with a whiff of the apocalyptic: "Remember – it wasn't raining when Noah built the Ark."

All the opinion polls during the campaign have put the Yes vote ahead, in the most recent survey by 57 to 43 per cent. Under the terms of the existing bailout the government has committed itself to continuing austerity, while also stressing the need for growth. It is determined that Ireland should not become a disruptive nuisance that might get blamed for adding to the existing European crisis. The authorities are keen to project that they are dedicated to rigorous financial rectitude.

But, as in recent votes in France and, especially, Greece, a substantial minority feels alienated and sore. Many of these have turned to Sinn Fein on a scale that other parties view as alarming. Ireland is not experiencing any lurch to the right. Sinn Fein, especially south of the Irish border, is a party of the left. From this position, it is increasingly striking a chord with the unemployed, the low-paid who are hard-hit by new taxes and charges, and the families whose young are emigrating to Australia and America.

The Sinn Fein message is: "The austerity juggernaut is steam-rolling its way over the peoples and countries of Europe with apparent ease. Not only has the government no plan, but its policies of austerity are making things worse. Ireland's political elite are now engaged in a full frontal and sustained campaign to frighten the life out of people. If you want to support your country then stand up for Ireland and say no to this bad deal."

The polls show how much Sinn Fein is benefiting from the politics of alienation. Its poll performance, which five years ago stood at 7 per cent, has now more than tripled to 24 per cent, while Gerry Adams has the highest satisfaction rating of any party leader.

Support for the largest party in the ruling coalition, Fine Gael, has held up reasonably well, its naturally conservative voters instinctively inclined towards voting Yes.

But much of the Sinn Fein advance has been at the expense of its junior coalition partner, Labour, which, as is common in coalitions, has suffered due to unpopular government policies.

Since the universal expectation is that even more austerity is ahead, many observers predict Labour will continue to decline as its traditional support becomes ever more disgruntled.

A Yes vote in tomorrow's referendum would come as a huge relief for the government and other parties that favour European co-operation.

This was summed up by Pat O'Connell, the fishmonger who hit it off with the Queen when she toured the Cork market. "Voting No to me would be suicidal," he said flatly. "I would assume we would need a second bailout. If we do vote No and we need money, where would we get it? We should vote Yes and get on with it, and try to get this little country out of the mess that it's in."

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