Saturday, April 28, 2012

Will the Fiscal Compact self-destruct?

The Irish referendum on the European Stability treaty aka Fiscal Compact is scheduled to take place on Thursday 31st May. But given the dynamics that have emerged in the Eurozone and the EU in the last 2-3 weeks, against the "growth via austerity" dogma and the potential election of F, Hollande in France on May 6. which may cause seismic effects to the Fiscal Compact (as well as the decision of the SPD whether to vote in favour of the ratification of the Pact in Germany,which may come in May or later), is it a good idea for Ireland to vote on May 31sr instead of waiting to see what happens. In other words there is a good chance the Fiscal Compact may self-destruct. A No in Ireland, unlike EU Treaties, would not block the adoption and coming into effect of the Fiscal Pact by other Euro or Europlus members. 

By the way, let's note the following No votes in EU history:

Denmark voted No to the 1992 Maastricht Treaty and Yes in a second referendum. It rejected the Euro in 2000. 

The Netherlands voted No to the Constitutional Treaty in June 2005. 

Ireland has voted No and later Yes to a) The Treaty of Nice (2001) b) The Lisbon Treaty (2008). In both cases later referendums said Yes.

France rejected the Constitutional Treaty in May 2005, It had voted for the Maastricht Treaty with the narrowest of margins (51.05%). But France has also, caused the empty chair crisis and the veto to UK's EEC entry (DeGaulle) as well a killing off the European Defense Community after a vote of it Asssembly in 1954 (which also caused the abortion of the European Political Community)!  

Sweden rejected the Euro in 2003 (n spite not having an opt-out from the EMU, since it was not a member of the EU in 1992 when the Maastricht Treaty was signed).

Now, back to the Fiscal Pact (not an EU treaty). Although Merkel has said that the Fiscal Pact will not be set aside, there is a good chance it may or at least be revised. or at least a growth pact added. Which of the three? The French election seems super crucial. As well as SPD's stance.

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