Europe Debt Crisis

This week as seen two major European elections that have raised serious questions about the future of the Union. The votes, in France and Greece, both resulted in the election of politicians that are asking questions about the future of the European Union and its single currency the Euro. A treaty between the governments of Europe known as the Fiscal Compact, designed to limit spending and balance budgets in the member states, needs to be ratified by the 1st of January if it is to come into effect.

Ireland is the only country that requires a referendum in order to allow ratification. The country will vote on the measures on the 31st of May but since the election of Francois Hollande as the president of France the entire project has been thrown into disarray. He made it clear during his campaign that he would renegotiate the treaty if elected. That stance is not one that sits well with Germany’s Chancellor Angela Merkel.

On Sunday Greece voted on its new government. The country’s previous rulers already ratified the fiscal compact but that isn’t the only problem created by the election. The first attempt to build a coalition of parties in the country failed leaving no government in control there. Paralysis in the state may not be any worse than the alternative. Many of the deputies elected are anti Europe or at the very least anti austerity. The country is still struggling under economic depression as it remains hard hit by mismanagement and austerity. Unemployment is rife and the feeling on the street is not optimistic.

With the vote in Ireland coming on the 31st, in what was supposed to be the biggest challenge facing the treaty, it now seems that vote won’t matter at all. If Francois Hollande’s demands to have the agreement changed are listened to another vote will have to be held on the new legislation. Alternatively if a Greek government attempts to renege on its contracts with the Union, the IMF and the European Central Bank on austerity measures there may not be an opportunity for the compact to be put into place before disaster hits.

Europe is currently walking a tightrope though most of the efforts to maintain stability are coming from Germany. Attempts to changes the compact, as recommended by Hollande, will take months of negotiation and may wear the economic giant’s patience. The only reason the Euro is still in existence is Germany’s allowance that it be so. If Germany decides there is no future in it the rest of Europe has no choice but to follow.

That leaves a bleak mood in Dublin, Ireland’s capital, as the vote approached. The latest opinion polls suggest that 42% of people intend to vote Yes, but one third of voters were as of yet undecided. The poll also revealed that a shocking 32% of people said they did not understand what they are being asked to vote on. Ireland has a history of voting No to European Treaties that are not properly explained to voters including the European Constitution which was remodeled as the Lisbon Treaty and rejected in 2008. It was put up for consideration again in 2009 and passed.

The European project is in dire circumstance. Ireland’s vote is the most important event in the near future but it is certainly not important in the scheme of things. Ireland is unique in the European Union as its constitution demands referendums much more regularly on European treaties than any other nation. As with all of Ireland’s European votes Yes means practically nothing while No means everything. A No vote would add pressure to mounting calls for a change in the way Europe has handled the financial and debt crises.

As Ireland goes to the polls later this month thoughts of a French President or a Greek hung parliament will be far from voters minds. People are concerned with their own economic well being and the well being of their children. The people will probably vote Yes on May 31 but that won’t be a vote of confidence in the European Union. It will be a vote for fearing the unknown in uncertain times.