- Associated Press - Thursday, May 31, 2012

DUBLIN — Saying “yes” could mean dooming Ireland to more long, hard years of austerity.

But saying “no” could mean national bankruptcy next year.

Ireland’s debt-burdened voters confronted an existential dilemma Thursday as they decided in a referendum whether to ratify the European Union’s deficit-fighting treaty - a measure backed by Germany as a confidence-building measure but criticized by many economists as exactly the wrong kind of medicine for countries drowning in red ink.

Pro-treaty forces led by Prime Minister Enda Kenny stress that Ireland could lose its access to European bailout loans next year unless the treaty passes, leaving Ireland no reasonable choice but to say yes.

Opponents say it would be better to pursue a showdown with EU partners now, and demand better debt-reduction terms at the risk of triggering a worse eurozone crisis, rather than commit to new rules requiring tougher deficit targets that Ireland simply can’t meet.

Outside Dublin polling stations in churches and elementary schools, the citizens expressed equal measures of rage, bewilderment and resignation at the colossal toxic debts of Ireland’s state-owned banks that brought their nation to its knees and will take decades to repay.

“The treaty will solve nothing, but we’re facing massive cutbacks and charges no matter what Europe says anyway. And voting ‘no’ would just create more problems for us,” said Bridget Connolly, 42, who had just voted “yes” with no enthusiasm inside a Catholic girls’ school transformed into a polling station for the day. “We’re going to need European money next year, plain and simple.”

But many voters said they were swayed to vote “no” by campaigners’ predictions that the treaty, if made law, would require Ireland to keep cutting spending and raising taxes until 2020 and beyond.

Ireland already has weathered four years of austerity, more than any other European nation; is struggling to maintain tepid growth against the tide; and is hoping to resume normal borrowing on bond markets next year if it can persuade analysts to raise its battered credit rating.

The “no” camp argued that throwing the fiscal treaty back in the EU’s face would send political shockwaves throughout the continent, isolate austerity champions like Germany and speed the growing calls for a eurozone-wide strategy for releasing debt pressure on its weakest members.

They said this must mean that the foreign banks and hedge funds that plowed money into Ireland, Greece and Portugal during good times now share the losses.

“Banks in Germany and Britain and elsewhere were just as responsible for the mess we’re in. We’re sick to the back teeth of being told it’s all our own fault,” said Gerard Cunningham, 50, who voted “no” inside a Catholic Church.

Sinn Fein, the Irish nationalist party that has seen its support surge over the past month because it is the only significant party opposing the treaty, said neither outcome - “yes” or “no” - would “straighten out this mess.”

“But a strong ‘no’ vote, or indeed a victory for the ‘no’ vote, will set a different direction for this government and will send a very, very clear signal that this state joins with people in France and Germany and Greece and right across the European Union in demanding an end to austerity,” Sinn Fein leader Gerry Adams told Associated Press Television as he cast his ballot in the border county of Louth nearest his home in the British territory of Northern Ireland.

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