Ireland’s Support for EU May Help Ease Its Bank Crisis

Although expected, passage of the Irish referendum on the European Union fiscal stability pact May 31 underscored his country’s commitment to putting its “economic house in order,” Paul Gleeson, Ireland’s consul general based in Atlanta, told GlobalAtlanta Monday, June 4.

He also said that it should help to attract more foreign investment and ease its banking crisis.

“We really weren’t surprised; the result was expected,” he said because polling data had been close to the eventual 60 percent of voters in favor of ratifying the pact with only a few gyrations in the months preceding the vote.

He acknowledged that the voter turnout at 50 percent of the 3.1 million registered voters was low, calling it a “self-fulfilling prophecy” because of the anticipated passage. “I understand it also was a wet day, which apparently had an effect,” he said.

Aside from the general recognition that Ireland “needed to balance its books,” Mr. Gleeson said there is widespread consciousness that the country should work to continue drawing the foreign direct investment that has bolstered its economy in recent years.

He also said that he is confident Ireland would be able to reduce its deficit to 3 percent of its gross domestic product by 2015 as required by the stability pact.

The passage also strengthened his government’s efforts to secure recapitalization of Irish banks to ease Irish bank debt at a time when the debt of the Spanish banks may receive additional support from the European Stability Mechanism.

Ireland is the only country to hold a national referendum on the stability pact, which has been signed by all members of the European Union except for the United Kingdom and the Czech Republic.

Ireland accepted a $105 billon bailout by the EU and the International Monetary Fund in 2010.

The unemployment rate in Ireland is declining slowly and currently stands at slightly more than 14 percent. It trailed only the Netherlands last year among EU members in terms of percentage growth of foreign direct investment, according to government reports.