Irish referendum on fiscal pact

More than 3.1 million people in Ireland are entitled to vote today on whether to join the European Union's fiscal pact, in the only popular referendum to be held among the 17 members of the euro currency union that have signed the treaty.

A recent poll conducted by the daily Irish Times found that some 39 percent of voters supported the fiscal pact while 30 percent were against it. But some 22 percent of the electorate remains undecided while another 9 percent does not plan to vote. That leaves open the possibility that the pact could be rejected.

Bad weather was blamed for sluggish turnout during the day. By midday a number of polling stations in Dublin were reporting less than 10 percent turnout.

Under the German-led fiscal pact, eurozone states are to adopt a "golden rule" in which they commit to balance their budgets and - ideally - generate surpluses. Countries that have an annual public deficit that exceeds 3 percent of their gross domestic product (GDP) would face financial penalties.

Most importantly for Ireland, eurozone nations in a financial bind can gain access to emergency rescue funds in the European Stability Mechanism (ESM) only if they have adopted the fiscal pact. Dublin was forced to seek an 85-billion-euro ($105-billion) bailout from the EU and International Monetary Fund (IMF) in 2010 after its real estate market collapsed, threatening to take the country's baking sector down with it.

'Respect and credibility'

The Irish government, led by Prime Minister Enda Kennedy, campaigned to the last minute on Wednesday in favor of the fiscal pact, arguing that the country's reputation in Europe was at stake.

"This is about stability, bringing confidence to the euro," the premier said as he campaigned at a Dublin railway station.

"When we take over the EU presidency next year we want to be very effective," Kennedy told the news agency AFP. "A strong 'yes' vote adds to the respect and our credibility with our colleagues in Europe."

Tapping into public frustration with austerity, the opposition Sinn Fein party has argued that the pact would simply bring more tax hikes and spending cuts during a period of already high unemployment.

"We know that austerity doesn't work, and that's increasingly what people are saying in mainland Europe," Gerry Adams, leader of the Sinn Fein, told reporters outside the Irish parliament on Wednesday.

Outcome uncertain

Although support for the pact currently appears high in the polls, Ireland has a record of surprise outcomes when it comes to popular votes on EU accords.

On two separate occasions, Ireland has re-conducted referendums in order to pass key EU treaties. In 2001, Irish voters rejected the EU's Nice Treaty, which sought to reform European institutions. The Nice Treaty was then approved in a second referendum in 2002.

And in 2008 the Irish electorate rejected the Lisbon Treaty, which created new and controversial posts like the European presidency and foreign affairs chief. The Lisbon Treaty was subsequently backed by voters in a second popular ballot in 2009.

Even if Ireland did vote 'no' on the fiscal pact, it would not torpedo the agreement. The pact is set to go into effect when 12 of the 17 eurozone member states sign the treaty into law.

Polling stations close at 10pm local time tonight. Counting of votes will begin at 9am local time Friday and a result is expected by early evening.

slk/av/jm (AP, AFP, Reuters)