Irish Vote on Fiscal Treaty as Europe’s Debt Crisis Deepens

Irish Vote on European Fiscal Treaty as Debt Crisis Deepens
A woman walks past a sign for a polling station as she heads to vote in the European Union's fiscal treaty referendum in Dublin. Photographer: Aidan Crawley/Bloomberg

The Irish vote on the European Union’s latest treaty today, with polls indicating they will endorse measures designed to ease the euro region’s debt crisis.

Ballots can be cast until 10 p.m., with 3.1 million people eligible to vote. Early tallies may give an indication of the outcome by mid-morning in Dublin tomorrow, with a final result due in the evening.

Opinion polls indicate that supporters of the Fiscal Stability Treaty lead by about 18 percentage points even as doubts grow about the viability of the euro region. While opponents of European austerity such as Nobel laureate economist Paul Krugman are urging the Irish to reject it, the government’s argument that the treaty is needed to secure future bailout funds is carrying more weight.

“I voted ‘Yes’ because I want funding to be in the country for our future, for our children, and jobs,” said Martina McKenna, 51, a child care manager, after voting at a polling station in central Dublin. “Funding was the main issue.”

By about 1 p.m. local time, voter turnout was about 10 percent, Dublin-based broadcaster RTE said today.

‘Fairy Godmother’

A yes outcome is 1-33, meaning 33 euros ($41) would return 1 euro of profit, according to Dublin-based bookmaker Paddy Power Plc. A no vote is 10-1 which would mean a 10 euro profit on a 1 euro wager, with odds lengthening through the campaign as Greek and Spanish debt woes intensified.

Without access to European bailout funds, there is no “fairy godmother” willing to unconditionally fund Ireland when the current aid program ends in 2013, Deputy Prime Minister Eamon Gilmore told RTE yesterday.

The yield on Irish October 2020 bonds fell 3 basis points to 7.38 percent today after earlier climbing to the highest level since Jan. 23.

“It is overwhelmingly in Ireland’s interest to vote for the treaty” said Megan Greene, senior economist at Roubini Global Economics LLC in London. “Ireland voting down the fiscal compact would only serve to drive a wedge between itself and its European partners.”

Some Irish voters have grown weary of the cost cutting. The last two governments have introduced 24 billion euros of budget reductions since the economy went into recession in 2008.

In an interview with BBC Radio yesterday, Krugman said a rejection by the Irish, “who have been such good soldiers,” would send a message to Germany that austerity is damaging the European economy.

“I voted ‘No.’ You can take me for a fool once, you won’t take me for a fool twice,” said Tom Keon, 68, in Dublin. “The country is broke, and what are they doing with austerity? They are taking the money from the poor people that are struggling.”

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