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Final text of Fiscal Compact deal may allow Ireland to avoid referendum

The final text of the treaty agreed by 25 EU leaders last night says the debt brake will only ‘preferably’ be constitutional.

The final text of the European 'fiscal compact' deal means a referendum is not obviously needed.
The final text of the European 'fiscal compact' deal means a referendum is not obviously needed.
Image: Mark Stedman/Photocall Ireland

THE FINAL TEXT of the ‘fiscal compact’ deal struck by 25 European Union leaders last night may allow Ireland to ratify the deal without a referendum – after a crucial clause said a ‘debt brake’ did not need to be written into the constitution.

The deal – which is intended to stop participating countries from running up major budget deficits by limiting how much they can spend – provides that countries will not be able to run a deficit greater than 0.5 per cent of the size of their economy.

While earlier drafts of this deal specifically stated that this deal had to be adopted into each country’s constitution or equivalent, the final deal says the “balanced budget rule” should be transposed into each country’s laws on a “preferable constitutional” basis.

This means that Ireland is not strictly required to pass a constitutional amendment in order to ratify the deal – meaning that the most obvious trigger for a constitutional referendum has been taken out of play.

It is expected that this morning’s Cabinet meeting will agree to formally pass the treaty on to the Attorney General, Máire Whelan, for her examination on whether a referendum will still be needed to ratify the deal.

The language of the treaty would suggest, however, that leaders have made a conscious effort to minimise the difficulty with which Ireland can ratify the agreement.

The provisions of the deal allow the European Court of Justice to enforce a lump sum penalty on any member state who has not adopted the terms of the deal into law within 12 months of it taking effect.

Although Ireland is already subject to the jurisdiction of the ECJ from previous court rulings, the fact that it can now enforce fines on a new basis may mean that a referendum is still possible.

This would have been an unavoidable difficulty for the other EU leaders, particularly Germany, who had needed to ensure that the new treaty provided a toothy way of making sure that countries fully abided by its terms.

Another concern is that the deal’s final Article proposes that the “necessary steps shall be taken” within five years so that the treaty can be adopted into the legal framework of the EU as a whole.

The fact that the original EU treaties, which Ireland held referendums to endorse, may be amended by this deal could necessitate a further vote – though this remains unclear, as the legal ground has not been tested on that claim.

Political need

Both main opposition parties have called on the government to hold a referendum on the bill, irrespective of its constitutional need.

While Fianna Fáil and Sinn Féin both criticised the extent of the deal – with Fianna Fáil saying it did not solve the crisis, and Sinn Féin complaining that it would demand further austerity – both parties have asked that the deal be put to a public vote for formal approval, a demand endorsed by Labour backbencher Aodhán Ó Riordáin.

Both Sinn Féin and the Socialist Party said they would be seeking legal advice of their own on whether a referendum is needed, separate to the Attorney General’s formal legal advice.

Government ministers, however, have ruled out the prospect of holding a referendum simply to gauge public opinion, with Enda Kenny yesterday formally stating that a vote would not be held if there was no constitutional need to do so.

Michael Noonan had previously said there was no precedent in Ireland for holding a referendum on a non-constitutional measure simply to test public opinion.

A Red C opinion poll published in the Sunday Business Post showed that almost three-quarters of the public wanted to see the matter put to a public plebiscite.

Of the respondents in that poll, 40 per cent said they would vote Yes on any such deal, while 36 per cent said they would be voting No. Removing the 24 per cent of voters who were undecided, the current polls would show a Yes victory by 53 per cent to 47.

The deal is planned for adoption in 25 member states, after the Czech Republic joined the UK in opting out of the new deal.

It is understood that the Czech Republic’s difficulties are procedural, however, in that the prime minister cannot sign the deal to begin the ratification process without first having parliamentary approval.

In full: Treaty on Stability, Coordination and Governance in the Economic and Monetary Union (PDF) >

Read: Opposition parties disappointed in EU treaty >

More: Government has “nothing to fear” from an EU referendum >

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Gavan Reilly

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