Friday's Yes vote by the people of Ireland to the terms of the European Union fiscal compact should not be taken as any kind of endorsement of the austerity programme being imposed on eurozone countries by the so called Troika – the EU, the European Central Bank and the IMF.
Ireland simply had nowhere else to go. Like Greece and Spain, they don't want to abandon the euro, even though the terms of remaining in it have become ruinous.
Strict budgetary discipline and deficit reduction is pointless in the midst of a recession. This is for the simple reason that unemployment reduces tax revenue and forces governments to borrow more. Imposing further cuts only creates a deflationary spiral, which is destroying not just Greece, Ireland and Spain, but the entire EU.
When even the head of the ECB, Mario Draghi, says the single currency has become "unsustainable" then it is surely time to listen. Sovereign debts must be secured with EU-wide collateral. The ECB must become a lender of last resort for European banks. Bank deposits must be insured as they already are in countries like Britain. This is the only way to stop capital flight, bank runs and sovereign debt events from destroying the integrity of the EU.
There is a very real possibility that, within weeks, monetary union could disintegrate as Greece, Portugal, Spain and Italy are forced to leave the eurozone to avoid unrest caused by mass unemployment.
The moment of truth for Europe has arrived. Political leaders of all nations must realise that they are all in this together.
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