THE AUTHORITIES in Brussels are working to avert the need for a referendum in Ireland or any other country if they grant Germany’s wish for changes to the European treaties to toughen the enforcement of EU budget rules.
Although Berlin’s push to reopen the Lisbon Treaty for a second time since its enactment only two years ago has not gone down well in Europe, officials involved in the campaign to save the single currency say it will be very difficult for other leaders to spurn German chancellor Angela Merkel.
There is no dispute that EU leaders will have to adopt an intrusive new system of fiscal oversight if they are to persuade the European Central Bank to step up its bond market interventions and, possibly, lend to the International Monetary Fund.
Quite how that is achieved is the subject of fevered debate as European Council president Herman Van Rompuy strives to achieve maximum change within the ambit of the treaties as they stand while yielding in some way to the chancellor’s requirement for treaty change.
At issue as Mr Van Rompuy prepares for a crucial European summit tomorrow are measures which would enable EU leaders to amend the treaties without having to invoke a national ratification procedure.
While that might provide a back door route to treaty change without going to the people in Ireland or elsewhere, it remains unclear whether such measures would be sufficient to execute the change Dr Merkel and her French ally Nicolas Sarkozy have in mind.
The German and French leaders will not table their formal proposal until today, leaving many talks participants with little to go on besides their remarks to a joint press conference in Paris two days ago. Talks have been ongoing in the background for months, however, so it must be assumed that Mr Van Rompuy has a fair idea of what Berlin and Paris are seeking.
While the fine grain of their plan remains under wraps, Mr Van Rompuy believes amendments can be achieved without referendum if leaders confine any changes to the operation of the “excessive deficit procedure” which is supposed to keep the national finances of even the most wayward governments within preordained limits.
The operation of the excessive deficit procedure is set out in article 126 of the Treaty on the Functioning of the EU, which gives effect to the measures set out in the Lisbon Treaty.
Article 126 is quite detailed and runs to 14 paragraphs.
However, some of the most crucial provisions in the excessive deficit procedure are not included in the article itself and are left instead to a protocol annexed to the treaty.
For example, it is the protocol, which has the same legal effect as the treaty, which sets out the obligation on governments to ensure their budget deficits remain within a limit of 3 per cent of gross domestic product and their national debt does not exceed 60 per cent of GDP.
Crucially, the final paragraph of article 126 gives prime ministers, presidents and chancellors the power to rewrite the protocol in its entirety if they so wish. To do that all they must do is to agree unanimously on a new text at a summit and consult with the European Central Bank and the European Parliament.
In as much as any new protocol can be designed only to implement the provisions set out in article 126, they have limited room for manoeuvre. However, the article itself is quite far-reaching. It gives EU governments the power to “give notice” to a recalcitrant member to take measures within a specified time limit to achieve the deficit reduction that its European partners deem necessary.
High-level European sources involved in preparations for the summit say this avenue may provide a convenient way out for everyone, appeasing Dr Merkel while ensuring that her new effort to spread Germanic fiscal rigour is embedded within the treaties.
From an Irish perspective, a referendum would be required if the change went beyond the essential scope or objectives of existing treaty provisions. Still, the fact that the protocol can be rewritten only to implement the terms of article 126 as they stand may mean the Government avoids what could be a referendum defeat.
