All of Europe is looking to Ireland as the country prepares to vote on Thursday in a referendum on the unpopular fiscal compact for greater budgetary discipline. If the Irish reject the new treaty, it won’t just be a major blow to its main advocate Angela Merkel. It could also spark panic on the financial markets. Though past referendums on European Union issues in Ireland have proven to be problematic, this time things are expected to go off without a hitch. When the Irish vote on the EU “fiscal compact” treaty on Thursday, their clear approval is expected. Polls predict that some 60 percent of the voters will tick the Yes box on the controversial treaty, which commits all ratifying members to fiscal responsibility.
But as certain as a majority vote may appear, German Chancellor Angela Merkel will nevertheless be anxiously focused on the activity in Dublin on Thursday. In the past, the Irish have repeatedly proven to be both unpredictable and resistant to being told what to do. Should they reject Merkel’s fiscal pact, it would be a further setback for the German chancellor following the election of Socialist François Hollande in France.
Though the fiscal pact can still go into effect without Irish approval — it only requires ratification from 12 of the 17 euro-zone countries — a vote against it would be highly symbolic. After all, the Irish are the only Europeans allowed to vote on the treaty. On top of that, it would once again make investors on the financial markets question whether the euro zone has a future.