Time for Ireland to play hardball in Europe - Ireland's referendum on the European Fiscal Stability Treaty


But there are also reasons why a no vote makes sense.  For a start, this whole process we are in is a disgrace.   Part of the blame for the Irish financial crisis goes right back to the way the Eurozone was set up and the failure to complete the kind of fiscal structures that would have made the whole thing work.

Right through the boom here, when we should have been raising interest rates to calm things down, we were tied to the lower interest rates that suited Germany and so were imposed on the rest of Europe.

Then there's the culpability of the German and French banks that took a gamble on the Irish property boom by lending billions to the Irish banks and now want all their money back even though the property deals have collapsed -- and the EU and the ECB have made it a condition of us getting the bailout that none of our banks defaults on its debts to these bondholders.

As you may know, most of these bank bondholders, foolishly guaranteed by the Irish state in the autumn of 2008, have now been paid.  But to do so the Irish state has had to borrow billions and billions, and that debt is now being carried by the Irish taxpayer.   A big chunk of what we get in bailout funds goes right back again in debt repayments.

It's absolutely crazy when you think about it.  It's also unfair and unjust.  Why should the Irish taxpayer have to carry this enormous burden?

You can't get a straight answer from anyone in Europe because there isn't one.  What this referendum does is give the Irish voter the chance to protest against this terrible injustice.

An example of the injustice is the situation with the former Anglo Irish Bank, the small bank that became a big player by stoking the property boom here, acting illegally and recklessly, and was one of the main reasons the country is now bust.  The bank is now closed down, but the ECB is making us pay back all the money owed to its unguaranteed bondholders.

This has become a big issue here, with around 30 billion in promissory notes (IOUs signed by the government) involved.  We are due to pay this back at the rate of just over 3 billion a year for the next 10 years (and coincidentally 3 billion is roughly equivalent to the amount of painful cutbacks we have had to make here this year).

We are also paying a penal rate of interest on this debt (up to 8%), even though hundreds of billions in new money is now being pumped into banks across Europe by the ECB at a rate of around 1%.   This is so outrageous that it's beyond comment.

Read more: 
The CEO who insults the Irish and laughs all the way to the bank 

Irish man who admits he was married to 19 women is convicted of bigamy

One government minister here broke ranks last week and suggested that we should let Europe know that unless we get a deal on the 30 billion in promissory notes the Irish people are likely to vote no, no matter what the consequences.

That deal should include a big interest rate cut and/or a big capital write down.  All of which is a strong reason for voting no.

So far the Irish government are still being the good boys in Europe.   Taoiseach (Prime Minister) Enda Kenny has said that the two issues (the treaty and the promissory notes) must not be linked.

He says that the votes of the Irish people "cannot be bought" and that separate negotiations are taking place with the ECB about the promissory notes.  He's either a fool or else he's smarter than we think and he's playing a subtle game with Europe.

So what's likely to happen? It's too early to say.

An opinion poll last week showed that more people here are inclined to vote yes, but there is a very big number of people who have yet to decide.  If they don't see the EU playing fair and offering Ireland a deal in the coming weeks, they may well vote no in a couple of months when the referendum is held.

Does Europe care or will they just let us swing in the wind? Of course they care.  Any state falling out of the Eurozone will put the whole European integration project at risk.

Look at the lengths they have gone to in a probably futile attempt to keep Greece in the Eurozone.  They are even more desperate to keep Ireland in, which is why they altered the wording of the treaty a few weeks back in an attempt to avoid the necessity for a referendum here.

What happened 10 days ago was that the attorney general advised the government that a referendum was necessary anyway, because the proposed changes had a constitutional impact (we seem to be the only country in Europe where something like this cannot be implemented without a referendum).