Ireland: Fiscal Treaty passed

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A Pyrrhic victory for the establishment that will blow up in their faces

The referendum on the Fiscal Treaty in Ireland was an important international issue. The Fiscal Compact Treaty includes a series of budgetary rules including that countries must reduce their structural deficits to 0.5% of GDP and their overall debt to 60% of GDP. It constitutes the institutionalisation of austerity and a very significant attack on democratic rights as it gives significantly increased powers to the European Commission.

In the referendum big business interests and EU "leaders" demanded a "Yes" vote. Working class people in Greece and many other countries, who increasingly see the need for a united struggle against austerity and capitalism throughout Europe, hoped a "No" vote would give an impetus to such a struggle.

In the end the Fiscal Treaty (successfully dubbed as The Austerity Treaty by us and others) was passed by a 60 to 40 margin on the basis of a turnout of 50.6% on Thursday 31 May. However, the result cannot be taken by the government as a major victory or as an endorsement of austerity. There was no enthusiasm for this Yes vote, as one government Minister admitted, those who voted Yes did so with “extreme reluctance” or as the editorial in the Sunday Independent commented, "Far from being a vote of confidence in Europe, or the Government for that matter, the sullen Yes this referendum secured from a grudging citizenry was an act of despair."

The Socialist Party and its most prominent public representatives, TDs, Clare Daly and Joe Higgins and our MEP Paul Murphy, fought a strong and effective campaign and this was commented on by many.

Unprecedented intimidation and blackmail

The yes campaign was based on threats and blackmail. The text for the Fiscal Treaty was agreed last summer but in February an addition was made to the preamble which said that only countries who accepted the Fiscal Treaty would be able to access funds from the soon to be established European Stability Mechanism (ESM). The ESM is the new fund of €700 billion to bailout bankers and speculators and create a stable €uro, at the expense of working class people throughout Europe

This blackmail clause, which was supported by the Irish government, was specially designed and subsequently used to make the issue of access to funding in event of future insolvency or bankruptcy the dominant issue in the campaign. In effect it was a gun to the head of people to vote Yes, or face a ruinous financial collapse. So much for the democratic credentials of the EU or Ireland.

In setting up this threat, the establishment displayed its ruthless determination to get the Treaty passed. This intimidation had a major impact, tapping into the real fears that exist that the economic situation could get much worse. However, they will reap a bitter reward for using of such brutal intimidation in the months and years ahead.

During the campaign people were threatened that without sources of funding/credit there would be immediate catastrophic austerity in 2014, much worse than anything up until now; that the Budget due this December would also be much worse if there was a No vote; that a Yes would result in stability, investment and jobs but a No would cause the opposite etc etc. Agency after agency came out with this kind of stuff. The establishment were also backed up in their line by the supposedly independent Referendum Commission.

A legal challenge from 1994 forces equity and balance in broadcast media (TV and radio) in Referendum campaigns. So in a formal sense the media has to be seen to give equal coverage to both sides. Notwithstanding this, the bias of the media in this debate reached unprecedented levels.

Many commentators did the bidding for the establishment and helped focus the whole debate on the funding issue and avoid a real discussion of the actual contents of the Fiscal Treaty and the effects of austerity.

The blackmail clause on funding and the media were central factors in the result. On top of these, the result is also a comment on the current mood and general consciousness. There is a near universal understanding that austerity is bad for the economy and there is a broad mood against it, as seen in the recent opposition to the household tax. That mood is strongest among the working class and those most affected by the huge cuts, new taxes and austerity of the last years.

Real fear of financial collapse

However, for significant layers, including the middle class and some better off sections of the working class, the fear of austerity was trumped by the greater fear of potential financial collapse when the current EU/IMF programme finishes. While many didn’t fully believe the threat that the EU would withhold funds if there was a no vote, they plumped for what they thought was the least risky option.

The reality that austerity is destroying the economy in Ireland and Europe was drowned out somewhat by the intense propaganda that poured out that the Treaty was part of a plan for recovery. The government even tried to incorporate Hollande’s victory into their campaign peddling the idea that austerity can go hand in hand with growth, claiming that significant growth packages were in the offing, once the Treaty was passed.

On the other hand they pointed to the economic collapse and instability in Greece as a consequence of struggling against austerity and non observance of the bailout conditions. In the main it was intimidation, combined with promises of recovery, that pushed many people, holding their noses, to vote Yes.

The absence of an understanding that there is an alternative to the diktats of the markets and capitalism, or of the possibility and plausibility of socialist policies, also tended to corral consciousness and stunt peoples confidence to vote No.

Hardening opposition to the austerity and the EU

Taking all of these factors into account, the fact that 40% voted No is significant. It’s a positive statement about the resolve of large sections of the working class in particular and indicates that the No campaign, which was dominated by left or left leaning forces, had an impact.

While significant numbers of working class people did vote yes, it is also correct that a major class polarisation is indicated in the vote. Only five of the forty three constituencies recorded No majorities but it is clear that overall a majority of the working class voted No. The Yes vote was based on strong Yes majorities in middle class areas, including large votes in rural/farming areas. In contrast tallies indicate that in many towns and in many working class districts in the cities, the No votes were as high as 70%, 80% or even 85%.

We correctly forecast after the general election in February 2011, that it would be downhill from then on for the Fine Gael and Labour government. Similarly, the referendum result will be undermined by events. They got their Yes vote but on the basis of intimidation, blackmail and false promises. In fact that the government based their whole campaign on the need to be able to access funds in the event of the need for a new bailout is itself proof of the failure of austerity. But Enda Kenny and others once again promised that there would be an economic recovery during the campaign. The economic and debt crises in the Eurozone are getting worse and will expose the governments false promises.

Kenny has also stated definitively that there will be a deal with the EU to reduce the unsustainable and crippling bank debt. As it becomes clear that there isn’t a recovery, that there isn’t a reduction in unemployment, that any changes in the bank debt will be dependent on new vicious austerity attacks, Ireland will be wracked by the kind of instability that the establishment say they are so desperate to avoid.

Bullying and intimidation are not sustainable policies and cannot contain this situation indefinitely. As Napoleon once said, "You can do anything with a bayonets except sit on them." The worsening of the crisis, combined with deeper austerity cuts and more attacks on democratic rights, will all prepare the ground for an explosion of anger, struggle and political radicalisation.

The funding issue

Some commentators have said that as the actual vote was similar to the polls before the campaign started, that the campaign itself had little impact, but that is incorrect. The whole establishment, the EU and the media prepared well and acted in a unified manner in attempting to strike heavy blows against the no campaign from the off using the threat to funding as its principle weapon.

Fundamentally they were using their capitalist control over the finance system as a lever to force people to agree to more capitalist austerity. In the same way that control of water and the water supply should be public domain, so too there is no reason why the supply of money/credit shouldn’t be viewed as an essential public function rather than organised to benefit private capitalists. In reality this control is being used, like loan sharks do, to force people to pay a heavy ransom. If unchallenged, it will lead to more and worse demands. This is another version of "the race to the bottom" and likewise it can only be challenged through struggle and ending private control of the financial system.

The media, playing on peoples fears, used its influence to concoct the scenario that all financiers would immediately withdraw all funding. Then they sit in judgement that unless you have an immediate solution that is acceptable to the markets and guarantees a doomsday scenario can be avoided, that you have no answer or no credibility. In the first week and a half of the campaign, the Yes side and the media narrowed the debate in this way and struck some blows against the No side and significantly boosted support for a Yes vote.

This is a more blunt version of the old argument against socialist policies "that’s all very well but where will the money come from?" This attack has more of an impact now than it did in the the 1970s and 1980s because at this point the problems and dangers seem more acute, and at the same time the idea of taking over the wealth and the levers of power seems more remote to people.

However, as it becomes apparent that with more austerity, the crisis will get worse in any case, there can be a dramatic change in terms of what people see as what is possible and necessary and a real answer. People will be less susceptible to diktats, intimidation and manipulation and much more open to hear real and radical solutions. We even saw an outline of this during the campaign, as we responded to the Yes campaign, turning the focus back onto austerity and successfully halting the early momentum of the Yes side.

While the No campaign was able to undermine the arguments of the establishment as the campaign wore on, it wasn’t able to really develop a strong momentum behind a No vote. So in the end we got a result that few people are really happy with or support, a case of the majority voting for the lesser of two evils, without enthusiasm.

The political fall-out

This isn’t a major boost for the Government and the result was received mainly with relief. On the other hand if they had lost the referendum, they would have been dramatically weakened. They made promises to get the Treaty passed that they will not be able to fulfill, and so the undermining of the government will speed up as the crisis persists and worsens.

The Labour Party in particular is experiencing a crisis decline in its support. Just over a year in power they have already lost nearly 50% of their vote in an opinion poll taken just over a week ago. There have been many reports of Labour getting a rough and hostile ride in working class areas during the campaign. This pressure on and inside Labour is likely to get much worse.

Sinn Fein and United Left Alliance benefit

Even though on the losing side, the main beneficiaries from this campaign will be Sinn Fein and the United Left Alliance, the two main forces on the No side. Sinn Fein and the Socialist Party both had the benefit of getting financial backing from the GUE/NGL group in the European Parliament. However, with its massive financial assets, its 14 TDs and 54 county councillors, Sinn Fein already had huge reserves and resources with which to fight the campaign.

Sinn Fein got a lot of media coverage on the no side and their campaign had an impact. They based themselves on opposition to austerity and chose to emphasise that more than turning the attacks on democratic rights into a sovereignty or national rights issue. They limited their overall criticisms of the EU and capitalism, implying that a better deal could be wrung from the EU.

The Labour Party ironically tried to expose that while Sinn Fein are supposedly trenchantly opposing austerity in the south, they are imposing vicious austerity in the north. However, the truth of their hypocrisy was lost as Labour, of all people, had no credibility in making this attack and it had no impact.

Need for a new mass party for the working class

Sinn Fein’s support has been steadily increasing since last year’s general election, where they got 10%. The latest opinion poll gave them 24% of the popular vote, up 3% from the last time, more than twice that for Labour.

It is still the case that there are working class people who will not in any circumstances vote for Sinn Fein. However, at the same time it seems that Sinn Fein is likely to be the main beneficiary of the political crisis embracing all the traditional government parties, unless a real, genuinely left and working class alternative can be built. On current trends, it is likely that Sinn Fein can become the biggest party in the polls.

The issue is, can the conditions develop for the launching of such a left/socialist force in advance of the social and political explosion that is inherent in the situation? In this, how the struggle against the household tax will unfold can be of crucial importance.

The Socialist Party’s campaign

The Socialist Party went into this campaign in a stronger position than previous European referendums. In 2008, in the first Lisbon Referendum campaign, Joe Higgins played a crucial role even though Joe wasn’t a TD at that point, he had a real impact in that vote. This time not only did we have Joe, who made many vital appearances, we also had Clare Daly TD and Paul Murphy MEP, who replaced Joe in the European Parliament.

This was Clare’s first referendum campaign as a TD and it is universally accepted that Clare performed very strongly in a whole series of appearances and debates, which included prominent Government spokespersons and Ministers, and had a real impact in the campaign as she has had since entering the Dail last year.

This referendum was particularly important for Paul. Unlike Joe and Clare, Paul never stood for election to his position and in that sense didn’t have the same record or profile as the other comrades. Numerous commentators have referred to Paul as one of the most capable and articulate representatives of the No side, and indicating that on the basis of his performance and new profile that he had massively improved his chances of getting reelected as an MEP in 2014.

In March, and then again during the campaign in May, the party arranged for A4 leaflets to be dropped into every household in Dublin, well in excess of 400,000 homes. On top of that, we organised the mass distribution of more than 50,000 leaflets, including mass leafleting in key working class communities in Cork. Members worked in counties Meath, Kildare, Wicklow, Wexford, Waterford, Kerry, Tipperary, Clare, Laois, Offaly and in the cities of Galway, Limerick Kilkenny and Carlow and Drogheda.

Party members helped put up posters from the household tax campaign and from the United Left Alliance. However, it was the Socialist Party’s own posters and billboards that had a real impact in the campaign and provoked much comment. Saturday’s round up of the campaign in the Irish Times referred to the Socialist Party’s "ubiquitous referendum posters". The dictionary says "ubiquitous" means "omnipresence, being everywhere or in an indefinite number of places at once."

We produced thousands of four different versions of large corriboard posters to kick start the campaign. These were followed up in mid campaign by four versions of very large billboards, mainly for city centre areas. Finally we finished the postering campaign with thousands of three new small posters with our final messages in the last days of the campaign.

Our posters combined content with strong graphics and compared favourably with the others, particularly with the lack of any content in the Yes posters. They were featured in many papers, TV reports and blogs in both Ireland and abroad as well as social networking sites. Posters a very important mechanism of getting a message out in a mass way very quickly and have a real impact.

Our poster that linked austerity to the household and water taxes got up the noses of the establishment and the media who attacked it for trivialising the issues; our 8 ft by 4 ft billboards with a photo of Angela Merkel and the quote "The debt brakes will be binding and valid forever. Never will you be able to change them through a parliamentary majority" and also saying the "Treaty destroys democracy" was stark and hit home; our billboard that utilised the famous graphic from Jaws (where the shark comes up from the deep) to get across the cuts that the Treaty would bring, provoked a lot of comments and featured on blogs; a music and current affairs magazine in Ireland and the Guardian commented at the impact that one of our small posters had on social networks. The poster said "EU super rich stash €3 trillion in cash – Yet 25 million are unemployed – public need not capitalist greed Vote No" and included a graphic of Mr Montgomery Burns hugging masses of money.

Household tax – now for round two

This campaign is a very good platform from which the Socialist Party and the United Left Alliance can grow and move forward in the immediate months ahead. In those months too the struggle against the household tax is likely to reignite as it is likely that the Government and the councils will try to bring people to court. 50% of houses still haven’t been registered, making up significantly more than 50% of households and the population. Then we will have a huge opportunity to fully put this vote to the side and to build a movement that can really fight this Government, the EU and their austerity.

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