Ireland to Hold Referendum On EU Financial Treaty on May 31
Ireland, one of the European Union countries which benefited from the bailout of the European Union, European Central Bank and the International Monetary Fund, on Tuesday announced that a referendum is to be held on May 31, with the government backing the idea of voting in favor of the financial pact signed by the countries in the European Union.
Foreign minister Eamon Gilmore told lawmakers that the government is confident that it would win the support for the pact, which imposes a EU control on the financial situation of the member countries’ governments and a tighter spending and deficit rules that must apply to all the eurozone countries.
The financial pact is the best solution European countries came up with in order to avert the consequences of the economic crisis that swept across Europe, leaving economies of countries like Greece in ruins.
Gilmore said that the government would put in place a comprehensive information material and would initiate a campaign to ensure that voters are informed about the content of the treaty.
Ireland is the only European Union state to put the treaty to a referendum, after the Irish attorney general ruled that the constitution of the country demanded that the treaty be subjected to this test of opinion.
The European leaders made sure that Ireland does not stand in their way, so that they decided that in order for the treaty to be adopted it does not need unanimous vote, but only 12 votes out of 27.
Ireland opposed European Union treaties before, in 2001, and 2008, when it opposed the Treaty of Nice and the Treaty of Lisbon, respectively. Each referendum was held again net year, in spite of the protest of the Irish Eurosceptics, and this time the referendums passed, in a move considered by many across the continent a brutal infringement of the popular will of the Irish people by the European Union officials.
So far two countries outside the Eurozone, the United Kingdom and the Czech Republic, have refused to support the European treaty. Irish prime minister did sign but warned that the popular vote could render his vote null and void.
Ireland would have to suffer if the vote is negative, because the dissenting governments would be blocked from receiving EU funds as part of possible bailouts. Ireland benefits from a $90 billion EU-IMF credit line, which expired in 2013. In case it does not resolve its problems, it could not access a second line of credit if the referendum has a negative result.
According to the treaty, each ratifying country will deliver annual budgets with a deficit of no more than .5 percent versus gross domestic product. This would replace the 3 percent deficit that has been allowed so far, and which was systematically violated.
The treaty does allow more flexibility for the countries which have national debts below 60 percent of the GDP. These countries may have as much as 1 percent deficit. Ireland has a 107 debt-to-GDP ratio and it is expected to rise even further.
The European Commission is, by this treaty, empowered to sue deficit-breaching members at the European Court of Justice. The countries found guilty could be fine with the equivalent to .1 percent of their GDP, which would be added to their deficit.
EU and IMF expect the Irish deficit to fall below 3 percent by 2016, while the Irish government expects to hit this target a year sooner. In 2011, the deficit was 10 percent, and in 2012 it is expected to be 8.6 percent.11