EU referendum not ruled out

TAOISEACH ENDA Kenny has not ruled out another EU referendum. He told the Dáil “if we proceed down the road of eventual fiscal union, clearly there will be implications in the context of new treaties”.

But he stressed “fiscal union is not going to be achieved in the shorter term”.

There was “vehement opposition on the part of many countries to elements of fiscal union”, he said.

Ireland would, he said, “support, in principle, a banking union. In my view such a union could be achieved in a relatively short time if the political will exists”.

But he said there were 17 different governments with one bank and they all had their own opinions.

He was responding to Fianna Fáil leader Micheál Martin, who called on the Taoiseach to set out a position paper outlining the Government’s position on a number of fundamental questions.

Mr Martin said the agenda for the next meeting of EU leaders was “how to save the euro” and he said the Government should publish a paper because “the questions are going to come our way sooner than the Taoiseach thinks”.

He said 15 months after coming into office it was “hard to discern the Government’s position on such fundamental issues, particularly on the creation of a fiscal union, which people are now identifying as essential to save the euro”.

Mr Kenny said, however, there was a difference between “what people might want to have in a European context and what is actually achievable”.

The Taoiseach’s view for some time, he said, had been that “giving the ESM [European Stability Mechanism] a licensed facility to inject money directly into the banking system is important. Equally important is the separation of the sovereign from the banking crisis”.

Pressed again by Mr Martin to put forward a paper with Ireland’s position on the EU, Mr Kenny said it was “not a case of publishing a paper”. There was a banking crisis within the euro zone and “what is required, therefore, is a European response at a political level”. He said the Fianna Fáil leader was “well aware” of the range of different views.

“Some analysts want the sovereign to be separated from the banking debt and we support that suggestion.”

Mr Kenny said Ireland wanted a “re-engineering of our promissory note”, because the note requires the Government to “produce or borrow €3 billion a year”. The Taoiseach also wanted adequate firewalls for the euro zone and for the structure of the ESM to be changed to inject money directly into the banking system.

Sovereign debt should be separated from banking debt “because the position in this regard is leading to economies being dragged down”, he said.

Mr Martin said a referendum would be required in order to alter the structure of the ESM but, rejecting this, Mr Kenny said “a referendum would not be needed in that regard”.

But if Ireland proceeded down the road of eventual fiscal union, “clearly there will be implications in the context of new treaties”, he said.