Ireland to Hold Referendum On EU Fiscal Compact
The Irish government on Tuesday announced that a referendum will be organized on the European Union budget discipline treaty, a move that the government and the other 17 eurozone countries were hoping to avoid. Prime Minister Enda Kenny told the Irish parliament that he made this decision following the advise of the Irish attorney general Maire Whelan.
Even though the Irish referendum still reminds of the EU rejected referendum on the Nice and Lisbon treaties which were repeated until the result was the one the EU was expecting, in this case a possible rejection of the treaty would not put the European bloc in any difficulty, since the treaty needs only 12 countries to ratify it in order to come into force.
A possible rejection of the treaty would not entail the termination of the European pact, but would have as immediate impact cutting Ireland off from access to financial help from EU’s new and permanent bailout.
Analysts consider that the government’s existing loans from the European Financial Stability Facility would not be affected by the rejection of the compact. The government insists it would be able to meet the borrowing needs from the bond market.
The rejection would also have broader implications for the Irish membership of the eurozone. Irish ministers have emphasized that a rejection of the fiscal compact would in fact signify a rejection of the eurozone membership of Ireland.
Prime minister Kenny told members of the parliament that ratifying the treaty would be a step forward in the rebuilding of Irish economy and reputation, and would offer Ireland the possibility to reaffirm its steady commitment to the eurozone, which is the pillar of economic development and jobs strategy.
Irish authorities went to great lengths to avoid the vote on the fiscal compact, given that the austerity measures imposed by the European Union, European Central Bank and International Monetary Fund, which Ireland had to implement in order to receive bailout, made European institutions very unpopular in Ireland.
An opinion poll realized last month suggested that Irish wanted to vote in a referendum on the EU fiscal compact and that their vote would be against the pact by a large majority. Irish governmental sources say that the vote could be held before the summer.
The Irish vote comes as a new obstacle in the way of settling the European crisis, after a German top court overruled government’s efforts to push the euro zone bailout funds through a special fast-track parliamentary panel which would meet in secret.11