Referendum on Lisbon change 'highly unlikely'

Fri, Dec 17, 2010, 00:00

TAOISEACH'S BRIEFING:TAOISEACH BRIAN Cowen said it was “highly unlikely” that the Government would have to call a referendum over a revision to the Lisbon Treaty to facilitate the creation of a permanent euro zone bailout scheme.

As he prepared for last night’s European summit, Mr Cowen expressed confidence to reporters that any decision not to call a referendum would withstand legal challenge.

He also urged caution on the question of compelling unguaranteed senior bank bondholders to bear bailout costs and defended the interest rate on emergency EU-IMF loans.

After a lunchtime meeting in Brussels with senior figures in the group of European Liberal parties, Mr Cowen said the treaty amendment on the table did not involve “a shift or a change of competence” in the EU, so a referendum was not required.

“Obviously we’ll examine the final wording when the decision is taken. Based on the drafts that we’ve been seeing thus far I think it’s unlikely that we would have to have a referendum because it’s a limited treaty change under an existing revision procedure in the treaty,” he said.

Asked if he was confident such a stance would survive a challenge in the Supreme Court, he said: “Yes. Obviously we will take the advice of the Attorney General and the Government will take its decisions based on what the constitutional requirements dictate.” There was no question of personal preference in this matter, the Taoiseach said.

“The question is what is our constitutional requirement . . . and whatever those are they will be abided by and pursued. It would appear to us as things stand that it’s highly unlikely a referendum would be required for the very limited treaty change that’s envisaged in the decision that’s expected today.”

Without giving any details, Mr Cowen said euro zone finance ministers were examining a “comprehensive approach” to ensure stability in the single currency area in the medium and long term.

While officials are known to be examining whether to enlarge the €440 billion European Financial Stability Facility or widen its remits, Mr Cowen indicated that immediate decisions were unlikely. “To address turbulence in the markets there is no one day or one initiative that will bring about the stability and the normality that we need to see. There has to be a consistent strategic approach taken which is being undertaken by finance ministers presently,” he said.

“A series of decisions over coming months, it seems to me, will provide the background against which the markets can look at the determination and political will of the community of the European Union – at both institutional and government level – to deal with the problems that have arisen.”

He rejected the suggestion by Fine Gael leader Enda Kenny that up to €17 billion could be discounted from €25 billion of unguaranteed senior bank bonds.

“If we want to have people who talk in such a way, that then complain about perhaps the erosion of capital in our banks or flight of capital elsewhere, you know, we need to be responsible about what it is we’re saying whether at home or abroad.”

On the question of compelling debt holders generally to take a haircut on their receivables, he said it was neither possible nor credible for Ireland to act unilaterally in that area. “I think that the rates at which [funds] have been made available are comparable to the IMF rates, which is the cheapest lender of international credit that there is,” he said.