The humbled country needs a "yes" vote and a pinch of good luck to keep fighting its way out of a deep recession
DUBLIN -- It is St. Paddy's Day, and Irish Prime Minister Enda Kenny is far from lucky.
Ireland's economy still lingers deep in recession. Unemployment runs at 14%, and house prices are down by half. The prime minister's Fine Gael-Labour government now faces a referendum on the German-backed EU fiscal compact. There is no clear path forward. The opposition is gaining steam, branding Kenny's party as "Angela's Asses." Meanwhile, Irish voters are a prickly lot. They rejected EU treaty changes in 2001 and 2008.
What if they say no, again? The worst-case scenario is that Ireland will have no access to funding after next year (either in the bond market, or from the new European Stability Mechanism bail-out kitty), and will need to contemplate debt restructure and eventual exit from the euro. The best-case scenario is that, as in 2002 and 2009, we will keep voting until we get it right. Or the EU alters the proviso making accession essential for borrowing pennies from the stabilization mechanism.
To be fair, the fiscal pact is an unlovable document: drafted in a rush by Merkel and Sarkozy, equally unsatisfying to the left and the right, and creating budgetary conditions unmet even by Germany and France (or hardly any other nations apart from Luxembourg and Finland). It learns the worst lessons from the streamlined politically- and centrally-driven processes, which bore us the Common Monetary Policy and the euro.