Second time lucky?

Troubled Taoiseach: Brian Cowen’s government would be unlikely to survive a second rejection of the treaty. Photograph: Reuters

Sixteen months after stunning Europe by rejecting the Lisbon Treaty, Irish voters get a second chance to vote on the Union’s blueprint for reform when they go to the polls on October 2.

The stakes couldn’t be higher for Europe – or for Ireland.

A second No vote would plunge the EU into an immediate institutional crisis and prompt many observers to conclude that the 27 member club simply cannot be reformed.

In Ireland it would probably spell the end of Taoiseach Brian Cowen’s fragile coalition government between Fianna Fail and the Green Party. It would also seriously damage the country’s international reputation and possibly even raise doubts about its future membership of the Union.

“The European Union is central to our future. It is the platform for much of our prosperity. And it is essential for very many of our jobs. Ireland’s place is at its heart: that is where we plan to remain,” said Cowen in June when he announced plans in Brussels to hold a second referendum on Lisbon.

Maybe so. But the public mood in Ireland is bleak and volatile given the spectacular economic collapse that has seen Ireland’s “Celtic Tiger” economy fall off a cliff over the past 12 months. Unemployment has already hit 12 percent and is forecast to rise to 15 or 16 percent next year, while mandatory wage cuts are being proposed across almost all sectors of the economy.

The housing boom and bust has created a generation of first-time buyers saddled with negative equity from which they could take a decade to recover. And more bad news is set to follow in the coming weeks when the government reveals what elements of the “An Bord Snip” report (the nickname given to a state cost-cutting board appointed this year to advise on radically cutting back public spending) it intends to implement in the upcoming budget. People are already feeling the pain but the new cuts proposed will be even tougher.

“If you had a referendum in the morning on going to heaven there’d be 20-25 percent against,” noted Fianna Fail MEP Pat “the Cope” Gallagher wryly when he was asked about the prospects for the campaign for a Yes vote.

Conventional wisdom suggests unpopular governments cannot win referendums. And in Ireland there has never been a more unpopular government than the one led by Cowen, who garnered a personal approval rating of just 21 percent in an opinion poll published earlier this year.

Many Yes campaigners privately fear voters will use the referendum on Lisbon to punish the government for its mishandling of the economy. In an attempt to counteract this threat, Foreign Minister Micheal Martin has insisted that the government will not resign if the referendum on October 2 is lost.

“This is about the future of the Irish people, and the future of Irish society within the EU, and it transcends the government, it transcends every political party,” he told journalists when announcing the referendum date.

In reality, few observers believe the coalition could survive a second No.

Yet the poor state of the economy could end up being the trump card for the Yes campaign. During two decades of rapid growth and full employment, many people became complacent about the importance of EU membership and the euro to Ireland. However, the near collapse of the Irish banking system last October at the height of the financial crisis has concentrated minds on the benefits of the single currency and particularly the European Central Bank (ECB).

“We’re not Norway with huge oil and gas reserves. If it wasn’t for the support of the ECB, which is effectively funding this country, we’d be in even bigger trouble,” Alan McQuaid, chief economist with Dublin-based Bloxham Stockbrokers told The Wall Street Journal recently.

He has a point. In June, Irish banks had borrowings of €130 billion from the ECB, which accounts for almost 15 percent of all €900 billion of loans to the EU banking sector. This means they are borrowing the equivalent of 77 percent of Irish GDP from the Frankfurt-based bank.

Whether the general public grasps the detail of how the ECB is keeping Ireland afloat is not entirely clear. But there are certainly enough people out there burdened with sky-high mortgages and scared by job insecurity to provide a very different context to the second referendum on Lisbon.

Opinion polls, which must be treated with care due to the volatile nature of public views, also suggest the mood has shifted in favour of Lisbon.

A recent Irish Times poll showed 54 percent would vote Yes, 28 percent would vote No and 18 percent were undecided. Polls conducted a few months before the first referendum also showed a lead for the Yes campaign, but there was never a clear majority in favour of the treaty at any time before the first campaign due to the large number of undecided voters.

Several other factors also suggest that momentum is with the Yes campaign this time around. The Green Party voted by a two-thirds majority in July to support the treaty, something the party leadership failed to achieve before the first Lisbon vote last year.

There have also been a host of new civil society groups set up to campaign for a Yes vote. These include: Lawyers for Europe, We Belong and Ireland for Europe, which is headed by former President of the European Parliament Pat Cox and includes prominent celebrities such as Nobel prize-winning poet Seamus Heaney, U2 guitarist The Edge and football star Robbie Keane.

But perhaps more importantly, the No campaign has so far failed to gain any traction after losing its most vocal advocate, Libertas’ Declan Ganley. The controversial businessman unleashed a slick and populist campaign against the treaty in the run up to last June’s vote, which resonated with many Irish voters. But his attempts to turn Libertas into a pan-European political party in this year’s European elections failed spectacularly when the party picked up just one seat, in France. Ganley subsequently announced his retirement from politics and said he would not play a role in the second referendum. Two of his former lieutenants at Libertas, David Cochrane and Naoise Nunn, have also publicly recanted and say they will now support Lisbon come October.

Two other prominent No campaigners, Sinn Fein’s Mary Lou McDonald and the independent Kathy Sinnott lost their seats in the European elections. This leaves just one sitting Irish MEP, the newly elected Socialist Joe Higgins, and a handful of Sinn Fein members sitting in the Irish parliament, with a popular mandate to lead the campaign against Lisbon this time around.

Yes campaigners can also point to the important concession on the size of the European Commission that EU leaders have agreed in order to pave the way for a second Irish referendum. At their summit last December, all 27 heads of government said they would invoke a clause in the Lisbon Treaty that enables all states to continue to nominate members to the EU executive.

Research conducted after last year’s referendum showed that Irish voters were concerned that not having a member of the Commission for five out of every 15 years would leave small member states at a disadvantage. By addressing this concern, EU leaders have demonstrated their willingness to compromise to save Lisbon.

Yes campaigners can also highlight that a No vote would leave the Union governed by the Nice Treaty, which mandates a smaller Commission without spelling out how this should be achieved. By October 2, few voters should be left in any doubt that a second No vote would lead to a new EU executive appointed without an Irish commissioner.

EU leaders have also agreed a series of guarantees to assuage voters’ concerns about the treaty’s impact on Ireland’s policy of neutrality, its tax and education systems and the traditional role of the family in daily life.

These guarantees will be enshrined in EU law via a legally binding protocol when member states ratify the next accession treaty to admit a new member. In short, the Yes campaign can argue that Europe responded to Irish concerns and it is now up to voters to enable the EU to reform itself to make the Union work more efficiently and effectively in all its citizens’ interests.

Of course, winning referenda in a recession is no easy task and there is no room for complacency on the part of the government or the main opposition parties that will all (except Sinn Fein) campaign for a Yes vote.

As the referendum campaign gets going in earnest, expect the No side to mount a fight back emphasising that not a word or comma has been changed in the treaty. They will hope for a repeat of some of the distractions that hurt the last Yes campaign when former Taoiseach Bertie Ahern unexpectedly announced his resignation and the government and opposition squabbled incessantly about who wasn’t working hard enough.

But with Ireland’s and Europe’s political future on the line on October 2, the political establishment will be praying that the Yes campaign prevails.

The awkward squad

The second Irish referendum on October 2 may be the biggest single hurdle for ratification of the Lisbon Treaty. But Czech President Vaclav Klaus also remains a formidable obstacle to reforming the Union and is gearing up to cause further mischief in the autumn even after the Irish vote.

Klaus has said he will not sign the treaty into law in the Czech Republic until the country’s constitutional court has ruled on its compatibility with the Czech constitution. The court has already ruled that certain aspects of the treaty are compatible, but allies of Klaus in the Czech senate are now asking the court to rule on the compatibility of the entire treaty.

Klaus, a trenchant opponent of further EU integration, hopes to cause a further delay in ratification to enable a newly elected Conservative government in Britain next year to scrap its own ratification.

EU leaders are aware of the danger and are likely to pile the pressure on Klaus if the Irish vote Yes on October 2.

But the final say will probably lie with the judges of the Czech constitutional court, who could throw out the challenge if they feel that their earlier judgment on aspects of the Lisbon Treaty was sufficient.

Polish President Lech Kaczynski has also refused to sign the treaty until the Irish vote in order to prevent them being isolated. But a Yes vote on October 2 should lead to quick Polish ratification. And concerns raised by the German constitutional court look set to be addressed before the referendum, enabling German President Horst Köhler to sign the treaty and complete the ratification process.