Warnings that a key government strategy to win the 26-County referendum on the EU Austerity Treaty would be to “put the frighteners on the electorate” were quickly borne out this week after Fine Gael’s Minister for Finance Michael Noonan threatened to punish a No vote with much tougher budget cuts and taxes next year.
Last week, the Fine Gael referendum director, Simon Coveney, that “the government would prefer to win the referendum by being nice but if necessary we will change tack”.
If passed on May 31, the Austerity Treaty is set to impose dramatic and irreversible cuts on the 26 County state to force it to reduce its structural budget deficit to 0.5 percent. It will be enforceable by European law.
After years of home-grown austerity, firstly by the Fianna Fail-Green Party coalition and latterly by Fine Gael and Labour, Irish voters appear reluctant to sign up to any new cutbacks agenda -- particularly one dictated by Germany.
But the government’s decision to use threats to impose its will has amazed even its own senior members.
One Fine Gael official said: “We couldn’t believe it when Simon said if the campaign is not going well after the first week we [Fine Gael] are going to have to put the frighteners on the public and really spell it out.”
‘YES. OR ELSE.’
Minister Noonan launched the so-called ‘frighteners’ campaign on Tuesday.
“If there’s a No vote, the budget I’ll be planning for later in the year will be dramatically more difficult than if there’s a Yes vote,” he said.
“If people think that by voting No they’ll avoid further tax cuts and increases, actually a No vote will do the opposite,” he added.
He also claimed that only those countries that ratify the treaty will have access to European Stability Mechanism (ESM) funding “and there are no other funds” -- suggesting Ireland could run dry of cash unless the treaty is passed.
A report that the International Monetary Fund would, if called upon, extend its lending program drew heated denials from government and EU officials on Sunday.
But the ‘no alternative’ argument was also challenged by Sinn Féin, who pointed out that the agreement linking the Austerity Treaty to the ESM has yet to pass into EU law, and can be still be renegotiated or vetoed by the Dublin government -- a point controversially ignored this week by the supposedly neutral Referendum Commission.
And Noonan’s repeated claim that ‘there is no alternative’ to fund the 26-County State other than through an ESM bailout, have been condemned as untrue.
Sinn Féin finance spokesman Pearse Doherty condemned the “scaremongering” of senior Government Ministers over the consequences of a No vote. They were trying to scare the Irish people into voting for a treaty that was “bad for them and for Europe as a whole”, he said.
He said that emergency funding, if required, would be available from European sources.
And he called on the government, and its supporters to spell out where they would get the additional 6 to 8 billion euro of cuts and taxes to comply with the treaty’s austerity regime.
The government needed to make clear “where they intend to impose the cuts, which taxes they propose to increase to bridge that gap,” he said.
Minister for European Affairs Lucinda Creighton described these figures as having been “drawn up on the back of an envelope” -- without saying what the correct figures for the austerity treaty were.
Sinn Féin president Gerry Adams called on the government today to make the position clear.
“I’ve always thought of Lucinda Creighton as being one of the more intelligent, thoughtful members of this Government,” he said.
“And if she doesn’t know what the figure is, the that’s deeply shocking.
“The easy way to sort this out of for the Government to present its figures.”
Mr Adams went on to say: “I want to welcome the recent interest in jobs and growth from the Yes side in the referendum campaign. But talking about jobs doesn’t get people off the dole. To create jobs you have to invest.
“You cannot create jobs by cutting 8.6bn euro from the domestic economy. Yet this is what Fine Gael and Labour have signed up to. And if we vote yes to the Austerity Treaty on May 31 we will be signing up to a further 6bn euro in cuts and tax hikes post 2015.
“The impact of all of these cuts and tax increases will be to further damage the domestic economy resulting in further jobs losses.
“The Government is talking jobs while implementing austerity. It simply makes no sense.
“On May 31 people have a clear choice between more austerity or investment in jobs and growth.”
Other parties have been launching their campaigns against the Treaty this week.
People Before Profit leader Richard Boyd Barrett said the government was trying to bully and intimidate people into a Yes vote. He said there was a recognised need for growth, not austerity.
Asked about how external funding could be found in the event of a No vote, Mr Boyd Barrett said funding would be maintained, as had happened in Greece.
He said forty per cent of Ireland’s debt was bank debt and ordinary people should not be asked to pay “the gambling debts” of private financial institutions.
Opening its campaign this week, eirigi’s Daithi Mac An Mhaistir warned that the new treaty is designed to further reduce the economic sovereignty of each of its signatories.
“Smaller states, like the 26 Counties, will find their interests subservient to the interests of the larger states, like France and Germany. But even those larger states are moving down a path that will see their national sovereignty further surrendered to the whims of the markets, the rating agencies and the global multi-nationals.”
The treaty was bad for not just Ireland, but all of Europe, he said.
“At the very core of Irish republicanism is a belief that the people are sovereign and that that sovereignty is indefeasible. Unlike many in the political establishment we don’t suffer from a post-colonial inferiority complex. We don’t feel the need to tip the cap to London, Berlin or New York.
“We know that the people of this country have the skills, the confidence and the integrity to create an Ireland which is both economically vibrant and socially just.”
At the launch of the Socialist Party’s campaign, party leader Higgins said that many of the “lavish phrases” being used by the government in the campaign echoed similar promises made during the second Lisbon Treaty referendum.
“Bitter experience has shown that those promises were absolutely worthless and false. Lisbon II did not provide the jobs that were promised and private investment has utterly collapsed. The new promises of stability are equally worthless,” he said.
Socialist MEP Paul Murphy described Mr Noonan’s threats as an attempt to put a gun to the heads of the public.
He said that instead of offering more stability, the Austerity Treaty would bring about “more instability, both here and across the euro zone”.
He said that while the Yes side would massively outspend the No side he was still optimistic that it would do well because of “the increasing confidence of people to fight back”.
His party pointed to the need to stand with the other peoples around Europe who have been denied a say on the treaty -- as well as to the protesting workers at the Vita Cortex in Cork who voted on Wednesday to accept a proposal from the company’s owner. Their move ended one of Ireland’s longest labour disputes of recent years and was seen as a victory for the workers.
The sit-in, which started four-and-a-half months ago, will conclude shortly when long-awaited redundancy payments are finally paid into the workers’ accounts.
The workers tweeted the successful outcome from inside the plant.
“Day 141. Our long journey is slowly coming to an end. We will soon be back with our families enjoying normal, everyday life. We cannot wait,” they said.
“We will never forget that you all walked with us every step of the way. We did this to ensure that it doesn’t happen to anybody else.”