| 18.8°C Dublin

Referendum offers prospect of austerity or more austerity

IT will be interesting to say the least if the people decide to vote against the fiscal compact in our unexpected referendum. Such a vote would undoubtedly be dismissed overseas as reckless, irresponsible but it would force the Government to finally make a real stab at austerity rather than just play-acting.

Opinion polls show a divided electorate at present but the thought of all those hospital closures will probably bring people round to the 'Yes' camp by polling day.

Almost everything in the fiscal compact will happen regardless of how we vote. We are already changing our budgetary system.

We have also committed to achieving the Maastricht criteria under the 'six pack' agreed in December and under the bailout agreement signed with the IMF and European institutions.

This means that a vote on the fiscal compact is effectively a vote on whether Ireland should be allowed to apply for a second bailout if the current one runs out next year.

Further austerity

Further austerity is on the cards regardless of what happens. Voting 'No' merely precludes us from accessing the new European Stability Mechanism and forces us to begin living within our means very quickly indeed. A sort of super austerity.

The previous and present governments clearly want access to the new bailout fund because politicians everywhere are still struggling to understand that the post-war system of borrowing money to buy votes is over.

It has proven close to impossible to wean politicians from their addiction to credit. The new referendum offers the tempting opportunity to do just that.

By voting 'No', the electorate could effectively force Ireland out of the bond markets for a few years and force Enda Kenny and Eamon Gilmore to go cold turkey.

Clearly the policy of extend and pretend makes sense for voters who are pensioners or those in the public sector, but it makes less sense for anybody else.

Those fortunate enough to be under the age of 30 have extra reasons to vote 'No'.

The young have borne the brunt of the crisis and will be expected to pay for the Government's inaction for decades to come.

Shocking statistics

Business Newsletter

Read the leading stories from the world of business.

This field is required

The shocking statistics for unemployment among the under-25s and anecdotal evidence about the age profile of our emigrants shows that the young are also paying for the crisis right now.

This is not a policy that will work indefinitely: the elderly and the middle aged can only sacrifice the young on the altar of austerity for so long.

The time will come when the last twentysomething loses their job or moves abroad, and we have to look elsewhere for blood sacrifices.

Past experience suggests the campaign will be as dishonest as most of our recent electoral outings.

The hard left will push for a 'No' vote because it wants to upset the apple cart and trigger wide-scale unrest.

The main political parties, the unions, IBEC and the other elements of the establishment will argue that a 'No' vote would be financially irresponsible.

That's open to debate. A 'No' vote would be the ultimate debt break but it would also be very, very painful for the disadvantaged as well as the establishment which would be forced to slash their fat salaries and make do with cheap printer cartridges.

Most Watched