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Ireland will hold a referendum on whether to accept the EU fiscal compact treaty which imposes strict new budgetary discipline on each state, Prime Minister Enda Kenny said Tuesday.
Ireland is to hold a referendum on whether it will accept the European Union fiscal compact treaty which tightens controls on member states’ budgetary decisions, Prime Minister Enda Kenny said Tuesday.
Twenty-five of the EU’s 27 members have signed up to the new compact, which imposes strict new budgetary discipline on each state, including near-zero public deficits.
Kenny told the Dáil (lower house) yesterday he had been informed by the government’s attorney-general that “on balance” a referendum was required to ratify the treaty, adding “it is in Ireland’s national interest that this treaty be approved,” according to The Irish Times.
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The treaty, which is designed to protect the euro currency from collapse and prevent a repeat of the Greek debt crisis, was agreed at a special EU summit in January. It includes several firewalls to protect individual countries from contagion from states close to defaulting on their debts, Sky News reports.
Only Britain and the Czech Republic have opposed the compact, which must be ratified by January 2013. Ireland initially rejected two previous EU treaties, and will have to hold its referendum on the fiscal compact by June. All three major political parties back the compact.
Kenny said he intends to sign the treaty at a special EU summit in Brussels later this week, and indicated that the government will set up a referendum commission in the coming weeks to advise the public on what the vote is about.
"I am very confident that when the importance and merit are communicated to the Irish people that they will endorse it emphatically by voting yes to continuing economic stability and recovery,” the prime minister said.
Kenny is now expected to try to extract concessions from Europe on the terms of Ireland’s EU/IMF bailout package, in order to avert a potentially embarrassing voter rejection of the treaty, according to The Guardian.
A no result in the referendum would probably not scupper the compact as only 12 euro zone states have to ratify before it can come into force. But a negative vote would be politically explosive, damage Ireland’s long-term funding prospects, and cast doubts on its commitment to the euro.
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