Year ahead could be as politically dramatic as last

Sat, Dec 31, 2011, 00:00

OPINION:IN THE past year the Irish people voted to change the shape of party politics. In the year ahead they may be asked to vote in a referendum the outcome of which will have profound effects on the wellbeing of every citizen for the foreseeable future.

The future of the euro, and our place inside or outside it, is likely to be decided by this time next year with the treaty designed to put the currency on a stable footing firmly in place. The details of the draft treaty are being haggled over in Brussels and that process will continue for the next three months. The determination of Germany and France to get it through means a treaty is inevitable if the euro is to survive. The process represents a huge challenge for the Irish Government, which is rightly focused on doing everything possible to ensure the country stays in the euro. Ideally from the Coalition’s point of view the treaty should be worded in such a way that it will not require a referendum.

Taoiseach Enda Kenny has said a referendum will not be held unless the clear advice from Attorney General Máire Whelan is that one is required by the Constitution.

If the Government deems a referendum is not necessary, the anti-EU campaigners are almost certain to take their case to the courts. The outcome of that process is anybody’s guess. Whether through a referendum or a vote of the Oireachtas, the country will be asked to ratify the terms of the treaty.

It has been suggested that the treaty negotiations will present this country with a great opportunity to negotiate better terms on the debt from the bank bailout. This is true but subtle diplomacy rather than blunt threats of a No vote will be required to get the bank debt eased as part of an overall package.

After all, the greatest losers from an Irish exit from the euro would be the Irish people who would find suddenly that the value of the money in their pockets or bank accounts had plummeted. Threats about not ratifying the treaty won’t carry much weight with our partners, particularly as other countries in the euro zone will be able to press on regardless of an Irish decision.

If a referendum is necessary and the Irish people are persuaded to vote No the country will face a real dilemma. The logic of a No vote would be to exit the euro but the devastating economic consequences of such a move might prompt a rethink. Legally Ireland could remain in the euro, even if the treaty is rejected here but, as its terms would apply to us, such a course of action would make a mockery of democracy.

The reason the outcome of a referendum on the euro is in doubt is the widespread perception that we are victims rather than beneficiaries of the EU-IMF bailout. “You are behaving as if the surgeon carrying out a life-saving operation is the enemy rather than the disease itself,” said one outside observer. All of the political parties in the Dáil share some responsibility for fostering this view.

The current Government parties while in opposition propagated the myth of victimhood; Fianna Fáil now that it is in Opposition is doing the same while Sinn Féin and the Independents of various hues have claimed there is some unspecified easier option to the bailout.

The simple fact of the matter is that without the bailout the country would have suffered far greater hardship over the past year than has been the case. Instead of cuts of about €3.8 billion in 2012 we would be facing cuts of €17 billion or more. The scale of that adjustment is almost incomprehensible.

Some idea of it can be gleaned from the trials and tribulations of Greece, which is hanging on to the euro by its fingertips. Not only have there been mass redundancies in the public service, and severe cuts in salaries that were much lower than their Irish equivalents, but basic health services for the less well off have been slashed.

Insulin for diabetics is no longer being supplied to poor people and neither are cancer drugs. Lack of international confidence in the ability of the Greek state to continue paying for these vital medicines, because of the partial default on the county’s debt, has seen the supply of essential drugs become scarce and only those who can pay for them are now sure of treatment. Those in Ireland who airily advocate an exit from the euro or a default on our debt need to look at the consequences of those actions a bit more closely.

The treaty designed to save the euro and, more importantly, whether or not the currency survives, will be the biggest issue facing this country in the coming year.

Even if a referendum is not required, the treaty voters are expected to go to the polls in two other referendums promised by the Government in 2012. One relates to children’s rights and the other is the abolition of the Seanad. Neither of those referendum campaigns may be as straightforward as the Government thinks. Greater protection of children’s rights is something the vast majority of people can agree on in principle but in practice there are many views about how to proceed and that is why the process of holding a referendum has taken so long.

The abolition of the Seanad looks easier but there are complications. The Seanad features prominently in the Constitution and abolishing it could create difficulties. Already a campaign to save the Upper House is beginning and there are powerful arguments on its side, one of them being that a Government with a record Dáil majority is seeking to reduce democratic accountability.

One way or another the year ahead in Irish politics could be every bit as dramatic as the year now passing.