Irish Yes vote on fiscal pact welcomed across eurozone

IRELAND’S voters have given resounding backing to tough new budget control under the European fiscal treaty.

• Irish voters have backed EU fiscal treaty

• 60.3% in favour of tough new budget controls

• Taoiseach Enda Kenny hails the result as a ‘foundation stone’

The controversial pact was backed by a margin of 326,003 votes, or 60.3 per cent in favour, in Thursday’s referendum. Its approval relieves some pressure on European Union finance chiefs as they battle to contain the eurozone debt crisis.

But critics said the tougher deficit rules would do nothing to stimulate desperately needed growth.

Irish prime minister Enda Kenny said the treaty “will not solve all economic problems but it is a foundation stone to make sure the economy stands on firm ground”.

He added: “The Irish people have sent a powerful signal around the world that this is a country serious about overcoming our economic challenges.

“I have consistently argued that budget rules alone will not be enough to overcome the economic crisis that faces Europe. They must go hand in hand with a real and concrete growth programme for Europe.”

Mr Kenny said the result would help bring stability and credibility and ensure Ireland has access to funding under the European Stability Mechanism (ESM) if needed.

Five of Ireland’s 43 constituencies rejected the plan, including both electoral regions of Donegal and three others in Dublin, one of which is home to two ministers.

Sinn Fein president Gerry Adams – who became a key figure in the No campaign – warned that the Irish government will be tackled harder now on whether it can meet commitments to ease the pressure of austerity.

“The government has given firm commitments in terms of committing on a bank bailout, in terms of growth and jobs incentive initiatives so we will be holding it to those promises.

“The problems which are facing people today will be there tomorrow. Clearly an element of the Yes vote was ideologically committed to the Yes camp but others [voted yes] very, very reluctantly.”

The result was quickly welcomed in the corridors of power in Europe. The president of the European Parliament, Martin Schulz, said: “The Yes vote sends an important signal of Ireland’s commitment to the eurozone and to the EU more broadly. The vote clearly states that Ireland’s future is at the heart of the eurozone.

“But we must also listen to the concerns of those who voted No.”

Mr Schulz said the fiscal pact was one element in the global strategy for the eurozone.

He said: “Clear rules bring stability, but they must be accompanied by significant growth measures.

“I am delighted the focus in the EU is now moving to the vital issue of how to create jobs and sustainable growth. Fiscal discipline alone, although necessary, will not suffice to bring much-needed economic growth to the EU.”

Mr Kenny later spoke to German Chancellor Angela Merkel, who welcomed Ireland’s willingness to vote Yes to more cuts as an outcome that “deserves particular recognition and respect.” And she mirrored Mr Kenny’s call for new growth initiatives, saying debt and deficit reduction “must go hand in hand with the strengthening of forces for growth and competitiveness in the economies of the eurozone.”

German foreign minister Guido Westerwelle said all EU nations should follow Ireland’s example and ratify the treaty, which 25 nations signed in February and which is supposed to come in to force by early 2013. “The fiscal compact stands for long-term financial policy good sense. If all of Europe commits itself to this course, we will be rewarded with new confidence,” he said.