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Ireland to put new European Union fiscal treaty to popular vote

February 28, 2012 | 12:05 pm

Enda Kenny and Mario Monti

REPORTING FROM LONDON -- Ireland will put the European Union's new treaty on fiscal discipline to a referendum, giving voters a chance to shoot down a controversial agreement that the Irish government says is crucial to the country's future.

Prime Minister Enda Kenny told lawmakers Tuesday that the Irish constitution demanded a popular vote on the pact, which will oblige signatories to run low government deficits and maintain low levels of public debt. The agreement is the linchpin of a German-led plan to impose budget discipline across the EU, especially in the 17-nation Eurozone, which is dealing with a stubborn debt crisis that has rocked the region's economy.

Kenny said he would sign the treaty anyway at a meeting of EU leaders later this week, at which 25 of the 27 EU countries are expected to join the pact (Britain and the Czech Republic are opting out). But the people of Ireland would be able to pass judgment on the agreement sometime in the "coming weeks," Kenny said, without specifying a date for the vote.

"In this referendum, the Irish people can confirm our commitment to responsible budgeting and, in doing so, ensure that the reckless economic mismanagement that drove our country to the brink of bankruptcy will not be repeated by any future government," he told the Irish parliament.

Ireland is one of three countries to have accepted international bailouts. Dublin was forced to accept a rescue in December 2010 because of a gigantic hole in its budget brought on by the previous government's pledge to bail out Irish banks saddled with billions of dollars in bad loans.

But the bailout and the austerity cuts that went with it have proved extremely unpopular, with many Irish inveighing against a loss of sovereignty for a nation that fought a bloody battle for full independence less than a century ago.

Twice in the last 11 years, Irish voters have struck down EU treaties in referendums, which postponed their implementation because of a requirement for unanimous agreement across the EU. But the Irish government held follow-up referendums in each case that then reversed the outcome of the original plebiscites.

If voters were to reject the new fiscal treaty, it would still come into effect for the other countries that sign it because unanimity is not required this time, and there would probably be no immediate adverse consequences for Dublin. However, its access to emergency loans beyond 2013 from the EU's rescue fund, if it needs them, could be jeopardized.

"I am very confident that, when the importance and merits of this treaty are communicated to the Irish people, they will endorse it emphatically by voting yes to continued economic stability and recovery," Kenny told lawmakers.


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Photo: Irish Prime Minister Enda Kenny, left, meets his Italian counterpart Mario Monti in Rome last week. Credit: Alessandro Di Meo / EPA