A person walks by a sign urging a 'no' vote in the referendum on the EU fiscal pact in Clones, Ireland on May 30, 2012.
A person walks by a sign urging a 'no' vote in the referendum on the EU fiscal pact in Clones, Ireland on May 30, 2012. - 
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Stacey Vanek Smith: Another big vote in Europe today on the issue of austerity. In recent elections in Greece and France voters showed a lack of support for the deep spending cuts tied to bailout loans from Europe. Now Ireland is holding a referendum on whether to ratify Europe's new fiscal discipline pact.

Joining us now from the streets of Cork on the southern tip of Ireland is Marketplace's Stephen Beard. Good morning, Stephen.

Stephen Beard: Good morning, Stacey.

Vanek Smith: Stephen, how much is at stake in today's vote?

Beard: Not as much as next month's rerun of the Greek elections. If Greek voters vote again against austerity that really could lead to Greece defaulting and the country crashing out of the euro. But what the Irish are voting on today is whether or not to accept the new fiscal discipline treaty. If they vote 'no' today, that won't lead to default, certainly not in the short term, but it would be a vote against austerity and further undermine a tactic for dealing with the debt crisis.

Vanek Smith: Do we have a sense of how the Irish are going to vote?

Beard: I think the majority are likely to back it. I've just been walking down the streets of Cork, and it is absolutely bristling with posters and billboards saying things like, 'vote yes for stability,' 'yes for investment', 'yes to secure Ireland's future.' But you know, the Irish have a habit of voting 'no.' They initially rejected two European Union banking treaties in previous referendums. There's no doubt that the Irish are heartily sick of austerity, so they could vote 'no.'

Vanek Smith: So Stephen, Ireland got its own bailout of about $100 billion U.S. dollars -- what happens if voters reject the fiscal discipline treaty?

Beard: Well as I say, it won't endanger the bailout, it won't lead to an immediate default. In fact the fiscal discipline treaty would go ahead without the Irish, but it could have wider repercussions. It would strengthen the hand of the new French president, who says that Europe needs to put more emphasis on growth and do less budget cutting. And it would put more pressure on the Germans to soften their hardline on austerity. But it would be a further sign of rebellion and disarray in the eurozone -- not what the global economy needs right now.

Vanek Smith: Marketplace's Stephen Beard in Cork, Ireland.


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