TDs say fiscal treaty watertight as EU leaders agree text not to be altered

Fri, May 25, 2012, 01:00

GOVERNMENT TDs have claimed the fiscal treaty is watertight after EU leaders agreed at an informal summit there would be no changes to the text of the treaty Ireland will vote on next Thursday.

Taoiseach Enda Kenny and Tánaiste Eamon Gilmore highlighted the decision of the summit that any growth measures agreed next month would be incorporated into parallel initiatives, rather than modification of the treaty.

Speaking in Brussels, Mr Kenny said it was clear from the meeting that the treaty Irish people will vote on was not going to be changed and that anything agreed in respect of the growth agenda would be additional.

Mr Gilmore said it brought clarity to the question raised by some opponents of the fiscal treaty who were claiming there would be alterations to it. “It is clear there will be no change,” he said.

The clarification that the growth measures championed by new French president François Hollande would not necessitate a reopening of the treaty was seized upon by Government backbenchers campaigning yesterday.

Labour TD for Cork South West Michael McCarthy said the treaty was now “watertight”, and that the outcome “blows apart” the argument by its opponents for a No vote on the basis that EU leaders would change the text. “They won’t and they can’t,” he said.

Another Labour TD, Dominic Hannigan, said it categorically confirmed there would be no changes and cleared up confusion created by No campaigners.

Irish EU commissioner Máire Geoghegan-Quinn warned that a No vote would leave Ireland in a “financial no man’s land”, unnecessarily exposed to uncertainty on future funding.

The only sure way for Ireland to guarantee future emergency funding was to ratify its provisions, she said. Irish people could help to maintain employment and secure more foreign investment by sending a clear signal they supported responsible budgetary discipline. “Families all over Ireland manage their weekly and monthly budgets carefully – it is very important that countries do the same.”

The Irish referendum was one of the main reasons for holding the summit, said sources in Brussels. The meeting was originally scheduled for next week but the date was changed because it clashed with next week’s vote.

Although the meeting failed to reach a consensus on key growth proposals, Mr Kenny described it as very positive and upbeat.

There was strong support in some quarters for the proposal to use the European Stability Mechanism to recapitalise the banks, he added. However, others disagreed.

There was also disagreement about the possible use of the European Investment Bank to fund infrastructural projects, he said, but the meeting agreed to ask the board of the bank to consider increasing its lending capacity.

In relation to Eurobonds, “people were clear that this would be a very long process indeed”, he cautioned. Mr Kenny described proposals for the creation of project bonds as fine, but warned they needed to be flexible for smaller countries and should not just be confined to trans-continental projects.

A pilot scheme for project bonds, which use private sector capital to help finance infrastructural projects, is under way, but does not involve Ireland. As a result, it may be some years before Ireland could benefit from any initiatives in this area.

Mr Kenny said there was now a palpable momentum from European leaders to focus on a growth agenda, on which decisions would be made at a summit in June. EU leaders had sent a message to the Greek people that Greece should remain a member of the euro, but that they should also live up to their commitments.

He said there was general consensus there should not be an “over-hyping of expectations” of the outcomes of summits. Growth could be difficult to implement in a short time in any country.