Wall Street Journal
Fear and Loathing in Dublin
Ireland has no reason to fear the consequences of a No vote on Lisbon.
Irish voters are due to vote again on the European Union’s Lisbon Treaty in two weeks, and the campaigns for and against the accord have only just begun in earnest.
It is a measure of the desperation of the supporters of the treaty that they have resorted to patent absurdities in their efforts to secure a Yes vote from the Irish people the second time around. Last Friday, Irish Finance Minister Brian Lenihan told a press conference that “a ‘No’ vote will signal to the rest of the world that Ireland has retreated into economic isolation.” This in turn would lead to capital flight from Ireland and higher interest rates and borrowing costs for the Irish economy.
It should hardly need stating that Mr. Lenihan is peddling phantom terrors to scare the Irish people into voting Yes. But in a world made skittish by last year’s global credit panic, it’s just possible that someone might, at least in the absence of thought, take them seriously. Preying on those fears, in fact, seems to be the chief strategy of the Yes campaign.
The truth about the Irish economy, however, is closer to the opposite of what Mr. Lenihan pretends. It is popular in Brussels to attribute Ireland’s remarkable decade-long growth spurt to EU largesse. The Irish themselves know better, or ought to. Ireland sucked on the teat of EU regional aid for two and a half decades without discernible effect. By the mid-1980s, it was still a poor country by European standards, but it was also facing a budgetary and debt crisis. It was only when it started on a campaign of supply-side tax cuts slashing marginal rates along with capital gains and corporate income-tax rates that the economy took off.
The financial crisis has certainly taken its toll on Ireland, which has returned to sizable deficits and double-digit unemployment. But it faces its current difficulties from a position of economic strength that is the result of those sound decisions in the past.
none of these accomplishments would be jeopardized by voting down the Lisbon Treaty. Ireland cannot and will not be kicked out of Euroland for voting down a treaty that, for all practical purposes, has already been rejected by the voters of France and the Netherlands, and would likely have met the same fate elsewhere if voters had been given a say.
The days of the Celtic Tiger are gone for the moment, but they have given Ireland an economic base on which to build that is in no way dependent on the benediction of Brussels bureaucrats. Quite the reverse: Brussels always treated Ireland’s fantastically successful tax policies with rank suspicion, accusing it throughout its boom years of “tax dumping” and “unfair tax competition.” There are plenty of governments on the Continent, not least France’s, that would love to rein in Ireland’s ability to attract investment through supply-side tax policy. Handing Brussels greater potential power to influence Irish tax policy would be tantamount to surrendering the keys to Irish prosperity to Brussels for all time.
As for Irish interest rates, those are now set in Frankfurt
no sane businessman is going to mistake a No vote on Lisbon with a decision to pull out of Europe or the euro. symptomatic of the great plague of what passes for European politics: the strident declarations that you are either with us or against us. In Europe today , it sometimes seems that no possibility of a loyal opposition is countenanced.
It is up to the people of Ireland to decide for themselves how to vote come Oct. 2. We will not join the chorus of those who claim to know what’s best for them. But it is regrettable that they are, once more, being forced to vote again, as if their first answer has been disallowed.
It should never have come to this at all. When they do vote in two weeks, however, we hope that vote is an informed one, and not based on unfounded fear-mongering or dark threats. To that end, we will be publishing excerpts from the Lisbon Treaty on these pages over the next two weeks. We apologize in advance if some of them are incomprehensible, but we urge you to direct any correspondence on that subject to the treaty’s authors.
MEP Exposes How The Treaty Was Made Unreadable: