Backing fiscal treaty crucial for Ireland's place in EU, says Kenny

Sat, Mar 3, 2012, 00:00

TAOISEACH ENDA Kenny has fired the first shots in the Government’s referendum campaign, saying support for the fiscal treaty is crucial for Ireland’s place in the EU and the single currency.

After signing the treaty in Brussels yesterday, subject to its ratification by the electorate, Mr Kenny said his EU counterparts received news of the referendum in a “really understanding way” and recognised that the choice was for the Irish people to make.

The treaty requires member states to keep their budget deficits and public debts within tight limits.

“Ireland is a member of the European Union, we’re a member of the euro zone, the euro is our currency. This now will become a matter for the Irish people to decide themselves,” Mr Kenny said.

His comments came as the Government received encouraging signs that a deal might be available on the terms of the promissory notes it issued to bail out Anglo Irish Bank and Irish Nationwide Building Society.

The International Monetary Fund said much consensus existed among Ireland’s bailout troika and the Government on lessening the burden of the promissory notes.

Mr Kenny and Tánaiste Eamon Gilmore have both emphasised in recent days that there is no link between the referendum and the Government’s drive to ease the terms of the Anglo bailout.

However, Minister for Social Protection Joan Burton yesterday repeated her belief that a renegotiation of Ireland’s debt burden would boost support for a Yes vote in the referendum.

The comments by the IMF, made by the fund’s team leader on Ireland, Craig Beaumont, were the strongest indication yet from a member of the troika that a restructuring of the bonds would happen.

He said easing the promissory note burden would make Ireland’s overall debt position more sustainable.

Mr Beaumont gave no indication of when a deal would be reached, but said the first repayment on the notes, due at the end of the month, was not a “hard deadline”. The promissory notes, with a face value of just under €31 billion, account for just under one-fifth of total gross public debt (€164 billion).

The IMF estimates that the running of large though shrinking budget deficits in the coming years will push public debt to €206 billion by 2015. A deal on the promissory notes could keep public debt significantly below that level.

Speaking after the meeting in Brussels at which he and 24 other EU leaders signed the fiscal stability treaty, Mr Kenny said he expected the Irish people were going to give “a very strong endorsement” to the pact “because they recognise that it is about the future, it is about jobs, it is about a growth agenda and therefore it is about our people as being part of the European Union.”

Asked whether a rejection of the treaty would threaten Ireland’s place in the single currency, he said he never contemplated defeat.

Speaking in Irish, however, he said voters would be asked on the ballot paper whether they wished to continue Ireland’s membership of the euro into the future.

Mr Kenny’s official spokesman said later that the actual wording had yet to be decided.

Separately, Government sources said the wording of the referendum would involve a simple Yes or No to the ratification of the treaty.The more complex details of the fiscal compact will be included in a Government Bill, which will be presented to the Dáil if the treaty is approved.

No date has been set for the referendum but it is expected to take place in early June.