Irish Finance Minister Michael Noonan said he’s confident voters will back the European fiscal pact and that the country is the only euro-area member that could secure public support for such a referendum.
“I am confident that we will win, but not complacent; we’ll keep campaigning till the end,” Noonan said at Bloomberg Link’s Ireland Economic Summit in Dublin today. “There isn’t a country of the 17 euro countries at present who could carry this in a referendum, there isn’t a single country bar Ireland. If we can carry this that will send a signal out to Europe.”
Ireland, which is three-quarters of the way through 33.4 billion euros ($42 billion) of budget cuts, is holding the referendum to enshrine planned European fiscal rules in national law. Noonan said a rejection of the referendum would force Ireland to enter “a new kind of an arrangement” rather than be a full member of the currency union and that’s “always a precarious position to be in.”
Support among Irish voters for the fiscal pact increased to 63 percent from 58 percent at the end of April, the Sunday Business Post reported on May 13, citing a poll carried out by Dublin-based market research company Red C. The referendum is due to be held on May 31.
Prime Minister Enda Kenny, speaking at the same event, said Ireland aims to return to markets next year as planned, and will stick to the terms of its 67.5 billion-euro bailout program agreed in 2010.
The yield on Ireland’s 2020 bonds, regarded as the benchmark, has fallen by more than half from a euro-era record of 15.5 percent in July. While Noonan said backing the treaty would further boost investor confidence in Ireland, Greece’s situation remains “very difficult.”
“There’s no pressure on them to leave,” he said. “If Greece sorts itself out democratically, there’s no question whatsoever of Greece leaving the euro.”
Still, the European Central Bank and the European Commission are planning for “all eventualities,” according to Noonan. Ireland has received assurances during the crisis from European authorities that it will be supported if there is further contagion from Greece, he said.
Greece will hold new elections that may threaten spending cuts required to secure 240 billion euros in bailouts. German Chancellor Angela Merkel and French President Francois Hollande have both said they would consider measures to spur Greece’seconomy as long as voters commit to austerity.
Noonan also said he would like to see a “stronger relationship” between the euro area’s future permanent rescue fund and the ECB in solving the crisis in the region.
The Irish economy, which has contracted about 15 percent since a real-estate collapse in 2008, is in a much better position than it was this time last year, Noonan said.
The finance minister also said it’s difficult to predict if Ireland will get a deal on it banking debt. Alternatives exist to a re-engineering of the promissory notes used to bail out the former Anglo Irish Bank Corp. if the ECB doesn’t agree to an accord, he said.