Ireland’s Left Benefits from Growing Austerity Fatigue
Sinn Féin is on the rise as the Irish prepare for a referendum on what it calls Europe’s “austerity treaty.”
Sinn Féin‘s campaign to reject the European Union’s new fiscal treaty appears set to fail but it has managed to boost support for the left-wing party which is emerging as Ireland’s main opposition platform to austerity.
Currently the fourth largest faction in parliament, behind the ruling center-right Fine Gael and Labor Party as well as centrist republicans, Sinn Féin has become the second largest party in opinion polls largely thanks to its campaign against what it calls Europe’s “austerity treaty.”
The Irish head to the polls on Thursday to vote in a referendum on the fiscal treaty that was signed by European leaders in March. The accord requires member states to write a balanced budget requirement into their national laws and introduces a financial penalty of up to .1 percent of gross domestic product for countries that violate the debt and deficit rules.
Surveys suggest that up to 40 percent of Irish voters are in favor of the treaty with 36 opposed and 24 percent undecided.
Sinn Féin, led by Gerry Adams, is the only major Irish political party that has rejected the fiscal treaty. It also campaign against the austerity measures that were imposed on Ireland in exchange for international financial support.
Ireland had to tap into Europe’s temporary rescue mechanism for a €85 billion bailout in 2010. Through public spending cuts, pay freezes for government workers and an income tax hike, the Irish government hopes to bring its deficit under 3 percent of GDP in 2015.
The policies have been painful. The Irish today consume 12 percent less than they did before the bank crisis. Even so, the national debt is expected to peak at 120 percent of GDP next year.
As fears mount that Greece could leave the eurozone unless the parliamentary elections next month return a government that honors the conditions of the country’s bailout agreements, Ireland’ borrowing costs are rising, raising the possibility of deeper cuts.
Labor has suffered the most from the austerity measures in terms of popularity. The Social Democrats’ support has halved to 10 percent since last year’s election. Sinn Féin appeals to traditional Labor Party constituencies with its anti-austerity rhetoric and now gets 24 percent support in the polls. Prime Minister Enda Kenny Fine Gael has remained stable.
The government has pledged to maintain the corporate tax rate at 12.5 percent, the lowest in the eurozone, which has helped to lure companies as Google, Intel, Microsoft and Pfizer to set up operations in the country.
Investment from multinationals, whose employees account for almost 10 percent of Ireland’s workforce, should enable the Irish economy to grow modestly this year and add jobs.
Sinn Féin is the former political wing of the Irish Republican Army which for decades waged a violent campaign against the British to reunite both parts of Ireland. It played a key role in the Good Friday peace accords that were brokered with American mediation fourteen years ago. Sinn Féin is now the second largest party in the Northern Ireland Assembly and in coalition there with the Protestant Unionists.