Ireland to conduct referendum on the Eurozone fiscal compact

Irish Prime Minister Enda Kenny has told the Irish parliament today that the government has decided to subject the Eurozone fiscal compact to a popular vote. Although the government was clearly tempted to bypass a popular vote, and there were indications that the wording of the compact had been designed to facilitate this, the calculation clearly was that if they were forced into a referendum by legal action they would definitely lose it, whereas a pro-active campaign can avoid the distractions of legalities and move directly to the big Yes/No question on the compact itself.  In fact, various comments ranging from David Cameron’s initial opposition to the compact to Mario Draghi’s interview with the Wall Street Journal last week had made it clear that many people outside Ireland see sovereignty issues with the compact, and these views would have inevitably informed the debate in Ireland. Having now upped the ante, the government will find it hard to resist the temptation to say the vote is essentially in/out of the Euro and indeed in/out on EFSF support — but the mentality of an already under-water investment banker (go even deeper!) is not necessarily good politics. [Note: the fiscal compact does not need Irish ratification to take effect].  Nevertheless, as with Greece, parties outside the EU consensus will relish the opportunity of the debate.  One thing still to be seen is whether the government has lined up some sweeteners from the troika especially as regards the debt burden from support to the insolvent banks.

6 thoughts on “Ireland to conduct referendum on the Eurozone fiscal compact

  1. This is good news. Finally, the citizens will have their say on Merkozys pact. The trouble is that future bailouts are linked to the pact. This means that a “no” vote could drive Ireland straight out of the Euro – unless the rules are changed, once again. But with the new euro group president Van Rompuy, I do not think that reforms are soon to ccome – he is too much depending on Merkel. http://lostineurope.posterous.com/van-merkel-meldet-vollzug

  2. Although the government was clearly tempted to bypass a popular vote, and there were indications that the wording of the compact had been designed to facilitate this, the calculation clearly was that if they were forced into a referendum by legal action they would definitely lose it, whereas a pro-active campaign can avoid the distractions of legalities and move directly to the big Yes/No question on the compact itself.

    I think that’s being rather kind, P.

    At the weekend, the line being fed to compliant journalists was critical of the current President for even raising the possibility of putting the treaty to a referendum.

  3. Paddy, assuming Collins is reporting accurately what he heard, it wasn’t reluctance to hold a referendum per se:

    The primary concern is that Mr Higgins chose to comment publicly on his options relating to the fiscal compact treaty before the Government had even received the opinion of the Attorney General on the issue.

    Which is pretty reasonable. What’s the point in getting an AG opinion if the President was already committed to convening CoS if a referendum wasn’t called?

  4. Bounced or not, I don’t see how any other decision was sustainable. With no referendum, the government would have been hostage to any quote from Europe along the lines of “of course it’s a new transfer of sovereignty, we just tweaked the wording to keep the Irish happy.” The same way that the Germans are leaking our budget documents to Reuters as has now happened twice even though they know the trouble it causes in Ireland.

    I also think it’s hilarious that Micheal Martin managed to get the Irish Times to report on his view that the government was unprepared for a referendum, given subsequent events.

  5. Bounced or not, I don’t see how any other decision was sustainable. With no referendum, the government would have been hostage to any quote from Europe along the lines of “of course it’s a new transfer of sovereignty, we just tweaked the wording to keep the Irish happy.”

    It mightn’t have been sustainable once either Michael D. or Pearse Doherty directed it towards the courts, but I don’t think that would have prevented the government from trying to brazen it out in the hope that Denham & Co would spare their blushes. But, to paraphrase an ex-Taoiseach, that’s women attorney-generals for ya.

    The same way that the Germans are leaking our budget documents to Reuters as has now happened twice even though they know the trouble it causes in Ireland.

    “Once is happenstance. Twice is coincidence. The third time it’s enemy action.”
    I think the attitude towards us from Germany and its hangers-on is quite clear at this stage.

    I also think it’s hilarious that Micheal Martin managed to get the Irish Times to report on his view that the government was unprepared for a referendum, given subsequent events.

    I think it’s even more hilarious that the Irish Times thinks that it’s a boost for the FF leadership when the deputy leader jumps ship. But then the Irish Times is increasingly divorced from reality.

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