FISCAL TREATY: Enda Kenny says he has nothing to fear from any vote, but rejection of the treaty would be a huge setback for the Taoiseach, writes ARTHUR BEESLEY
THE AGREEMENT of Europe’s new fiscal treaty raises the prospect that the Government might have to ask the people to endorse the pact, something it would rather not do given the risk of a defeat.
In Government circles, well-placed sources say there is a growing sense the treaty, on balance, will not necessitate a referendum. However, Ministers are braced for the likelihood of a Supreme Court challenge to any move to ratify the pact without a plebiscite.
Throughout the two-month treaty negotiation, great emphasis has been placed on the legal examination of the final text by Attorney General Máire Whelan. Even though the Cabinet will take guidance from her assessment, it will not be making the final decision. If it decides against a referendum, the matter is likely to be decided by the court. If there is a referendum, the decision will fall to the public.
Arriving in Brussels for yesterday’s summit, Taoiseach Enda Kenny insisted he had nothing to fear from any vote.
Seen in the light of Ireland’s rejection of the Nice and Lisbon treaties, that is a brave statement. Any rejection of the treaty would mark a huge political setback for the Taoiseach at a domestic and a European level.
There is no escaping the anxiety in Dublin that any referendum would be presented by the Opposition as an opportunity to beat up the Government and its European sponsors over the austerity and banking policies set down in Ireland’s bailout.
To counter that, all signs suggest the Government is likely to present the case for a Yes decision as a proxy vote on Ireland’s membership of the euro and the State’s willingness to adopt measures needed to ensure the currency’s long-term survival.
In addition, countries that fail to enact the treaty by March next year will be prohibited from receiving aid from the future European Stability Mechanism permanent rescue fund.
Even though the Government insists it will have no need to petition that fund for a second bailout, it might be argued that it would be better to have that option in reserve.
The expectation now is that Ms Whelan will take three or four weeks to finalise her assessment. While she is considered likely to adopt a cautious approach, in some respects the negotiation in Brussels is believed to have gone the Government’s way.
In essence, the treaty is designed to reinforce the writ of Europe’s economic rules by establishing legal limits on national debt and budget deficits. Such measures, in shorthand, are commonly known as the “debt brake” or the “golden rule”.
There were two strands to the Government’s negotiating strategy. The first was to ensure the brake could be introduced in secondary legislation, as distinct from Germany’s push for constitutional measures, which would automatically necessitate a referendum.
Berlin ultimately relented on that front, agreeing to measures of a “preferably constitutional” character, which left scope to deploy legislation. That dealt with the Government’s primary concern in the talks.
The second core issue in the talks was to ensure the treaty package contained provisions already set down in the EU to the greatest possible extent.
In the main, most of the measures fall within the ambit of the “six-pack” legislation enacted last year to strengthen the discredited Stability and Growth Pact.
The new elements are the golden rule itself and the requirement for an automatic correction mechanism to reverse any deviation from an EU-approved recovery plan, in the event that debt or deficits are higher than allowed under the treaty.
The debate here is considered very nuanced. At one level, the argument can be made that the automatic correction mechanism will tie the hands of future governments, removing their discretion over fiscal policy.
At another, the mechanism might be presented as a measure necessary to ensure compliance with pre-existing legal obligations that were flouted at will by many European countries.
Overhanging this debate are issues related to the nature of the treaty itself, which is an international agreement operating outside the framework of EU law. This follows Britain’s veto over a new EU treaty last month. The result is that European leaders now find themselves in the strange situation of agreeing to an intergovernmental non-EU pact whose specific objective is to strengthen the writ of EU law.
For Ireland, this raises a question of principle over the appropriateness of bypassing the people to adopt a treaty that will impose binding obligations on the Oireachtas.
Again, this is considered to be a finely balanced argument and one that is considered likely to feature heavily in any Supreme Court challenge, should that arise.
The debate on these matters has only begun.