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European leaders meet to secure permanent bailout fund

Heads of government meet in Brussels to make a permanent bailout fund before Germany can rule the current one void.

Angela Merkel fears Germany's Constitutional Court will declare the current European bailout mechanisms invalid and wants a permanent one created quickly.
Angela Merkel fears Germany's Constitutional Court will declare the current European bailout mechanisms invalid and wants a permanent one created quickly.
Image: Yves Logghe/AP

THE TAOISEACH today travels to Brussels to meet with his European counterparts in a summit aimed at creating a permanent financial rescue fund for Europe’s struggling economies.

Brian Cowen, accompanied by European Affairs junior minister Dick Roche, will meet the heads of government from the other 26 EU member states in attempts to negotiate making the Eurpoean Financial Stability Fund – the EU’s current ad hoc financial rescue method – a permanent feature.

The moves come a day after Moody’s indicated it was considering downgrading the rating of Spain’s national bonds – a move that would likely see its own cost of borrowing drive upward and possibly lead the Spanish government to require emergency funding through the EFSF.

Europe faces a race against time to amend its founding treaties and create a permanent bailout fund, however; Angela Merkel is keen to have an official bailout put in place before Germany’s Constitutional Court can rule the current EFSF beyond the scope of the European treaties.

The Irish government remains adamant, however, that any amendment to the current European treaties will not require an Irish referendum – a move that would otherwise put the creation of the fund in genuine risk.

A spokesman for the Department of Foreign Affairs told TheJournal.ie that a referendum will probably not be required, but the opinion of the Attorney General would form the basis of whether a referendum would ultimately be held.

Although referenda are usually held when European treaties are proposed, the creation of a permanent fund would not result in the transfer of legal competencies from Ireland to Europe, and therefore would not require a vote under the terms of previous Supreme Court rulings.

About the author:

Gavan Reilly

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