GERMANY IS pulling back from its demand for constitutional limits on debt and deficits in Europe’s new fiscal treaty, a move that will make it easier for the Government to avoid a referendum on the pact.
EU leaders hope to sign off on the treaty at a summit in Brussels next Monday but a number of prickly issues remain to be settled.
On the question most relevant to Ireland, the negotiation is moving in the Government’s favour.
Chancellor Angela Merkel pushed strongly since the outset of talks on the treaty for signatories to adopt a “golden rule” on debt and deficits in “constitutional or equivalent law”. Dr Merkel’s stance faced resistance from Ireland and other member states, who sought leeway to introduce the rule in secondary legislation.
Any constitutional change would necessitate another European referendum in Ireland, a path the Government is reluctant to take because it fears default.
Ireland and its allies succeeded in changing drafts of the treaty to ensure they referred to a new legal requirement for a “preferably constitutional” limit on debt and deficits. Although that formulation left ample scope for governments to adopt the measures in secondary legislation, Germany spent two weeks trying to strengthen that part of the text again to reinstate a constitutional requirement.
This was not achieved, and Berlin made a point of saying one week ago that it was unhappy with the latest treaty draft, which retained the “preferably constitutional” formulation.
Dr Merkel’s government has moved in recent days to change that stance. Referring to the current draft of the treaty, a senior German diplomat said: “We had a formula in December and this has now been translated into a legal definition.” The diplomat’s remarks were taken in political circles as a signal that Germany is now willing to consent to the current text.
This has fanned expectation that the the “preferably constitutional” clause will remain untouched in a new treaty draft due today. This would make it less likely that an Irish referendum would be required.
The Government has insisted for weeks that it has no way of forming a view on a the requirement for a referendum until the attorney general examines the final text of the treaty. On the basis of the current draft, the question is held to be finely balanced.
Even if the Government opted not to go to the people, Irish and European officials expect a legal challenge in the Supreme Court against any such decision.
Talks on the treaty resume today when ministers for Europe gather in Brussels for a pre-summit meeting and top advisers to heads of state and government gather separately in the city.
Among the questions that remain to be settled are a campaign by the non-euro Poland to be invited to all summits of euro zone leaders, something other countries find unacceptable.
In a debate yesterday at the constitutional affairs committee of the European Parliament, Polish centre-right MEP Rafal Trzaskowski said the current draft was “too good to be rejected, too bad to be praised”. Also at issue is the ratification threshold for the pact to take legal effect. EU leaders have agreed unanimity will not be required, meaning no euro country will have a veto.