Irish vote, German court add euro zone uncertainty

Tue Feb 28, 2012 6:35pm EST
 
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By Padraic Halpin and Eva Kuehnen

DUBLIN/KARLSRUHE, Germany (Reuters) - A planned referendum in Ireland and a German court ruling cast new uncertainty on Tuesday over efforts to overcome the euro zone's debt crisis, just when a flood of central bank money appeared to be calming financial markets.

Ireland's prickly electorate, which has twice voted "No" to European Union treaties before reversing itself, will get another chance to keep Europe on tenterhooks with a referendum on a fiscal compact on budget discipline agreed last month.

"The Irish people will be asked for their authorization in a referendum to ratify the European stability treaty," Prime Minister Enda Kenny told parliament after the state's top lawyer advised that on balance a plebiscite was necessary.

Kenny set no date for the vote in a country that received an EU/International Monetary Fund bailout in 2010 after suffering a

banking crisis. Public support for the EU has since fallen due to the unpopularity of harsh austerity measures.

EU diplomats tried to frame the treaty to avoid the need for a referendum, which Ireland has to hold on any major transfer of power to Brussels.

Given the Irish record of anti-establishment votes on European issues, the campaign could unsettle markets even if the main establishment parties back the pact. However, unlike full EU treaties this inter-governmental accord does not require unanimity. It enters into force once 12 states have ratified it.

Germany's top court earlier overruled government efforts to push decisions on disbursing euro zone bailout funds through a special fast-track parliamentary panel meeting in secret.   Continued...

 
Italy's Prime Minister and Finance Minister Mario Monti (L) talks with Dutch Finance Minister Jan Kees de Jager (R) at the start of a European Union (EU) finance ministers meeting in Brussels November 30, 2011.                      REUTERS/Yves Herman