Coalition expects EU summit growth focus will boost Yes side

Wed, May 23, 2012, 01:00

THE GOVERNMENT is confident that the focus on growth at today’s EU summit in Brussels will boost the prospects of a Yes vote in the referendum on the fiscal treaty on May 31st.

Following the election of François Hollande as French president there were fears he might seek to have the existing treaty provisions reopened with damaging consequences for the Government’s referendum campaign.

However, Irish officials are confident Mr Hollande’s strategy now is to get agreement on a growth package to go hand-in-hand with the treaty provisions. “The need for an emphasis on growth at EU level is something the Taoiseach has been advocating since he took office and today’s summit could be a decisive step in that direction,” said one Government source.

Separately yesterday, Minister of State for European Affairs Lucinda Creighton accepted that Ireland may need a second bailout and she said the country’s 12.5 per cent corporation tax could be threatened by a No vote.

She said if Ireland excluded itself from the European Stability Mechanism by voting No, other European countries that might contribute to a fund on which Ireland could draw might put other issues into the mix.

“Corporation tax could very well be put on the table and we may not be in a very strong position to say no, so I think we have to be alive to that reality,” said the Minister.

In Brussels, Irish Ministers are hoping that positive noises from tonight’s dinner in Brussels will help the referendum campaign as it enters its final week although agreement on the details of a growth package is not expected until the next major two-day EU summit at the end of June.

While Mr Hollande campaigned in the French presidential election to have specific growth measures inserted into the fiscal treaty, officials involved in the summit expect he will not push tonight for a deal to reopen the pact. It means Mr Kenny will be facing into the final phase of the referendum campaign with the treaty intact.

The proposed growth initiative includes a big expansion of lending powers for the European Investment Bank and a new effort to free up unspent EU structural funds.

It emerged last night that the Taoiseach will deliver a television address to the nation on the referendum issue next Sunday before the 6pm news on RTÉ.

The station has offered the slot to Mr Kenny in view of the fact that Sinn Féin leader Gerry Adams will be given half an hour of television time between 5.30pm and 6pm on Saturday to deliver the keynote address at his party’s ardfheis.

A Government spokesman said the Taoiseach’s address did not impact on the issue of whether he would be involved in a television debate on the treaty. Formal discussions had not yet begun on that issue, he said.

Mr Kenny will travel to Brussels for pre-summit talks this afternoon with centre-right leaders from the European People’s Party, Fine Gael’s affiliate in EU affairs. Tánaiste Eamon Gilmore will also be in the city to meet Socialist group leaders.

The summit is overshadowed by the uncertain outlook for Greece and Spain and divisions over demands from Mr Hollande to step up the battle against the debt crisis by introducing jointly-issued eurobonds.

German chancellor Angela Merkel remains steadfastly opposed to this notion until Europe embraces greater fiscal discipline and she is supported by the leaders of the Netherlands, Finland and Austria. “We are not going to mutualise anything until we have guarantees,” said a close Merkel adviser, citing Ireland as a reason why pooled sovereign debt was not a runner for Berlin.

“If Ireland were to build up its banking sector again to a level where Ireland alone cannot support it, we would have no input over the support. That’s not going to happen.”

EU governments, the European Commission and MEPs reached a deal yesterday to introduce a pilot “project bond” scheme. The aim is to deploy some €230 million from the EU budget to “unlock” up to €4.6 billion in private investment for infrastructure and innovation.