EU referendum in prospect

 

PRESIDENT SARKOZY’S decision to back German proposals for EU economic governance and a bailout/rescue mechanism, both requiring treaty changes, has placed Ireland in a deeply uncomfortable position. The prospect of a Lisbon III referendum looms.

Instead of confining itself next week to the uncontroversial tightening of member-state economic supervision under existing treaty provisions, the EU summit will now be asked to back a German timetable to draft treaty changes allowing the suspension of voting rights to states in breach of deficit rules, and to establish a permanent bailout/rescue fund akin to the current temporary one. “We have to move forward because in 2013 the rescue funds for the euro will end, so we need a more lasting rescue mechanism,” Chancellor Merkel told a press conference in Deauville. That probably means a referendum in Ireland in 2012.

Uncomfortable as the Government will be at the idea of such a new disciplinary mechanism, it is likely that Taoiseach Brian Cowen will feel unable to oppose the proposals next week. Merkel will insist that a permanent bailout fund cannot win endorsement from a sceptical German parliament without the corollary of the sort of disciplines suggested. Ireland, which has already been rescued by the EU, is not in a position to demur.

And by confining the changes to the euro zone the summit should be able to circumvent potential blocking by the UK whose new coalition government has pledged to oppose in principle any transfer of powers to Brussels.

“We are conscious of the reluctance to amend the treaties as a whole,” a French source told Reuters. “What we are proposing is a surgical revision. We don’t want it to open a debate on the constitution or the union.” That commendably limited aspiration may well be achievable within the European Council, or in the amendment-drafting “convention” it will convene, but any member-state engaged in ratification by referendum will not be able to confine the debate.

For Ireland’s political class the prospect of another treaty referendum is nightmarish. It had been hoped – indeed, promised – that Lisbon II would be the last for decades. There will be concerns at asking people to revote so soon, and at the reaction to a suggestion that voters should back the possibility of depriving delinquent members, Ireland included, of their vote.

The sovereignty issue would make for a difficult campaign, although a surprising number may well welcome the idea of the EU putting manners on a government whose economic management left so much to be desired. A growing public sense that the EU is crucial to the Irish economy was certainly critical to the passage of the second Lisbon referendum, but experience has also shown that voters can decide to use a poll to punish a government, irrespective of the issue on the ballot paper. But defeat of provisions for the fund would leave Ireland without a lifeline it may desperately need and plunge the EU into a potentially existential crisis. The responsibility on a government of whatever hue will be enormous.