Black Days for the Irish Economy
TULLYCROSS, IRELAND—Ten days after Irish citizens voted to ratify the proposed European Union fiscal austerity treaty, the sense of resignation about the gloomy economic situation seems heightened, especially in light of recent news that the vote will not mean an imminent re-entry to bond markets. Meanwhile, some expect Spain's bailout will make Ireland's prospects even worse.
In a May 31 referendum, voters approved the treaty 60 to 40 percent, with voter turnout at about 50 percent. For the treaty to take effect, 12 Eurozone ccountries need to ratify it—a condition still in doubt given opposition in Greece, France and other countries.
The treaty says a country's deficit cannot exceed 0.5 percent of its GDP; in 2011, Ireland's deficit equaled 9.4 percent of its GDP. Still Ireland has been considered the “poster child” or “good boy” for compliance with austerity measures previously mandated in order to receive bailouts—measures that treaty opponents blame for Ireland's 14 percent unemployment rate and ongoing economic stress.
Opponents—most notably the nationalist party Sinn Fein—had accused proponents of using fear to push for a yes vote, and they said that, contrary to treaty proponents' rhetoric, loans and bailout funds would still be available had voters refused the treaty.