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As Ireland votes on EU treaty, many ask if it's worth cost of membership (+video)

The strict rules of the EU fiscal treaty Ireland votes on today essentially block stimulus spending, and many Irish worry the country is stuck in an austerity-driven slump.

Ireland votes on EU treaty
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Standing in his field outside the village of Redcross in mid-May, an hour south of capital city Dublin, farmer David Johnson is clearly enjoying the unusually warm, dry weather that is allowing him to literally make hay.

"You still get a quality of life. Even when things aren't going right," says the County Wicklow beef farmer. 

But despite tourist images of Irish pastoral bucolia, quality of life isn't the reason farms exist. They are businesses, and in Ireland, the European Union is central to the industry. Agri-food is one of the few success stories in post-crash Ireland, worth 9 billion euros ($11.2 billion), with 83 percent of the sector's exports going to EU countries.

As Ireland goes to the polls today in a referendum on the European Unity fiscal unity treaty, much of the vote will be driven by voters' assessment of how much they benefit from the full support of the EU, and whether those benefits outweigh the costs of austerity. 

"I'm probably going to be voting yes. As farmers we are, more than most, committed to the European Union," says Mr. Johnson.

The European Fiscal Compact creates a 780 billion euro ($967.5 billion) permanent bailout fund called the European Stability Mechanism (ESM) for member countries to draw on in return for running a structural deficit of no more than 0.5 percent. If a country breaks the rules, it will be subject to penalties issued by the European Court of Justice

But the low deficit threshold makes desperately needed government stimulus difficult to implement. If Ireland signs on to the treaty, it is rejecting growth driven by government spending.


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