Cowen willing to support permanent rescue fund

IRELAND'S POSITION:TAOISEACH BRIAN Cowen said he was willing to discuss changes to the European treaties to create a permanent rescue mechanism for euro-zone countries but stressed that he opposes a German push to deprive countries which break EU budget rules of their voting rights.

As he arrived in Brussels for last night’s European summit, the Taoiseach left open the question as to whether a permanent rescue mechanism should include provisions for “orderly” national insolvencies.

Although some Irish officials believe a narrow change to the Lisbon Treaty on a permanent mechanism might not require a referendum, Mr Cowen said it was not possible yet to speculate as the wording of any change is not yet agreed. Asked if that meant he could not definitively rule out another EU referendum, he said: “It’s a very succinct summation of a very complex issue. It’s certainly a headline-grabber.”

The question of a rescue mechanism and voting right suspensions were raised by German chancellor Angela Merkel, who has concerns that the German constitutional court will rule against the EU rescue of Greece and a temporary fund for any other distressed member of the single currency.

Mr Cowen, who spoke by telephone with Dr Merkel on Wednesday, said he wanted to be as constructive as possible in relation to concerns in other countries.

Like many other EU leaders, however, he ruled out the prospect of any Irish support for treaty amendments which would empower the European authorities to suspend the EU voting rights of countries that infringe its budget rules.

“I’ve made my position clear on that, that I don’t regard that as a runner at all and it certainly wouldn’t have my support,” the Taoiseach told reporters. “On the permanent crisis mechanism we support the need for that.”

Mr Cowen offered no firm view when asked if such a mechanism should include insolvency procedures to enable countries to seek writedowns on their national debt.

On the question of whether a very narrow treaty amendment would necessitate a referendum, Mr Cowen said it was not possible to be definitive at this point.

“If it emerges that treaty change is being considered or is regarded as necessary . . . what I’m indicating is that we should do that in as narrow and as simplified a way as possible,” he said.

“It’s not an automatic situation that every time something happens there a referendum . . . You have to judge it when you see it; there’s no point in speculating.”