THE DECISION of EU leaders to reopen the Lisbon Treaty to create a permanent rescue scheme for eurozone countries was adopted on the basis that the move would not lead to a referendum in Ireland or any other member state, The Irish Timeshas learned.
While Taoiseach Brian Cowen said yesterday that he could not anticipate whether a referendum would be needed, the Government hopes the use of a simplified procedure to make a very narrow revision to the treaty will avert any requirement for a vote.
The amendment procedure that EU leaders hope to deploy can only be invoked in cases where there is no transfer of new competences to the EU as a result of the change.
This is held to be crucial for the Government, as the legal test for a referendum rests on whether there is a significant transfer of power to Brussels. “The clear consensus last night was that this would not involve referend[ums],” said an EU diplomat who observed the negotiations.
The Taoiseach said treaty change would not automatically lead to a referral to the people.
“The treaty provides specifically for a lighter mechanism to be used when the change required does not involve a transfer of any competence,” he said.
European Commission chief José Manuel Barroso made it clear the talks centre on a minimal change. “This is a surgical amendment to the treaty, limited in scope and to be dealt with quickly,” he said.
The deal to reopen the Lisbon pact came early yesterday morning after EU leaders bowed to demands for treaty change from German chancellor Angela Merkel.
Fearful of an adverse ruling from Germany’s constitutional court against the existing temporary rescue scheme for euro-zone countries, she secured an agreement to explore treaty change to facilitate the creation of a permanent scheme.
Berlin wants the new mechanism to include procedures for euro-zone governments to enter an “orderly insolvency” process, enabling them to seek extensions on the maturity of their debt and, in extreme cases, debt writedowns.
Dr Merkel insisted it was wrong that only taxpayers should bear all the costs of a future crisis.
There was “a justified desire to see that it’s not just taxpayers who are on the hook, but also private investors”, she said.
However, the summit saw ECB chief Jean-Claude Trichet express concerns that difficult talks on the mechanism could disrupt markets.
European Council president Herman Van Rompuy, who faces a seven-week deadline to draw up his proposals, described the deal as a “solid pact” to strengthen the euro. “That’s one of the most important decisions that we have taken in the last months,” he said.