Coalition intends to ratify fiscal pact in 2012 even if vote needed


THE GOVERNMENT wants to ratify Europe’s fiscal treaty this year even if a referendum is required to endorse the pact.

The Cabinet will not determine whether a public vote is required until the final text is settled. But European Central Bank chief Mario Draghi said yesterday that the pact will result in a diminution of sovereignty over budgetary policy in participating countries.

European Union leaders intend to strike agreement on the treaty at a summit next Monday. The pact will toughen the enforcement of EU fiscal rules through the adoption of new legal restrictions over budget deficits and debt.

Such moves will reduce governments’ scope for manoeuvre in budgetary matters, Mr Draghi told the World Economic Forum in Davos.

In Brussels, Minister of State for Europe Lucinda Creighton said early ratification by Ireland was essential for investor confidence and the confidence of the State’s bailout sponsors.

While it remained to be seen whether a referendum would be needed, she indicated that the Government would seek early ratification no matter what was required to achieve that.

“I don’t think that there would be any interest for Ireland in dragging heels when it comes to ratification. I would be very much of the view that we need to ratify as quickly as possible so that we can move forward,” she said.

Meanwhile, the Government sought to dampen the controversy ignited by Taoiseach Enda Kenny’s remarks at Davos that Irish people “went mad borrowing” in the boom times.

As Opposition politicians stepped up their onslaught, Mr Kenny insisted that he had made it “perfectly clear” in his state of the nation address before Christmas that the economic crash was not the fault of the people.

The Taoiseach declined to elaborate on his remarks to Irish media, but in an interview with CNN he claimed they set in context what had happened in Ireland.

“You had poor regulation, you had incompetent government and you had a system in our banking regime that paid big bonuses on volume lending, which meant that developers by proposing schemes that could never be paid for by people brought our country over the edge. I said that very clearly.”

Fianna Fáil had forced the Government on to the back foot by contrasting Mr Kenny’s remarks at Davos about “mad” borrowing with his state of the nation address, when he told viewers “you are not to blame” for the crisis.

Fianna Fáil TD John McGuinness renewed the attack by claiming the Taoiseach’s credibility had been damaged by delivering two different messages. Sinn Féin’s Mary Lou McDonald said Mr Kenny clearly had one message for home consumption and another for an international audience, while Fr Seán Healy of Social Justice Ireland described the remarks as “amazing and extraordinarily lopsided”.

The controversy provoked embarrassment in Government circles when it erupted, but Fine Gael subsequently rallied and party colleagues fell into line in defence of the Taoiseach.

Minister for the Environment Phil Hogan and Ms Creighton said the affair had been blown out of all proportion, while Minister for Enterprise Richard Bruton claimed Mr Kenny had outlined exactly where blame for the crisis lay.

Minister for Health James Reilly said there was no doubt that people were encouraged by reckless banks to borrow, while Minister for Transport Leo Varadkar acknowledged that not everyone had been greedy and “a lot of people just got by on what they had”.

Fellow Davos invitee Denis O’Brien defended the Taoiseach’s remarks and said other businessmen at the forum had congratulated him on Mr Kenny’s straight talking.

“He should be applauded, not in any way criticised,” said Mr O’Brien. “The problem is everyone talks in riddles about Europe but at least our Taoiseach came to Europe and was frank.