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Minister for Finance Brian Lenihan predicted Irish voters will back a second referendum on the Lisbon Treaty, as a worsening economic crisis builds support for Ireland’s position within the European Union.
The Government is due to hold a new poll on the treaty on a date yet to be set later this year following its rejection last June.
Mr Lenihan said voters will embrace the EU and reject a go-alone policy after the collapse of Iceland’s economy.
“A lot of political pundits say the choice next time for Ireland will be Rome or Reykjavik,” Mr Lenihan said in an interview with Bloomberg Television today. “Most people will vote for Rome.”
The rerun will take place against a backdrop of the one of the worst recessions in Irish history. Unemployment claims may climb almost 30 per cent this year as jobs are cut and the economy shrinks 6.5 per cent, according to Government forecasts.
“There’s growing support for a Yes vote,” Mr Lenihan said. “As the economic crisis has deepened, the population realizes how important Europe is to Ireland.”
Mr Lenihan said Ireland’s membership of the euro zone helped the economy withstand the global financial crisis even as its banks grapple with rising bad debts. “The ECB stands behind the entire Irish banking system, just as the Bank of England will stand behind the banks in the UK,” he said. “So there’s no default issue in relation to the banking system.”
Ireland last year became the first country in Europe to guarantee the deposits and borrowings of its largest lenders. Coupled with a sluggish economy and widening deficit, the guarantee raised concerns that the government may struggle to repay its debt.
Mr Lenihan, who is due to deliver an emergency budget on April 7th, said today the government will tackle the deficit and would not need outside aid. “We’ll be in a position to fund ourselves as a state this year and the European Central Bank stands behind our banking system,” he said “So we’re a solvent state and we’re well able to do our business.”
