Ireland to hold referendum on EU fiscal treaty

Tue Feb 28, 2012 12:33pm EST
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By Conor Humphries and Lorraine Turner

DUBLIN (Reuters) - Ireland will hold a referendum on Europe's new fiscal treaty, Prime Minister Enda Kenny said on Tuesday, setting the stage for the first popular vote on the German-led plan for stricter budget discipline across the region.

Support for the European Union has cooled in Ireland after its financial crisis, meaning there is no guarantee a vote will succeed. A rejection would damage Dublin's long-term funding prospects and cast doubt on the country's commitment to the single currency.

After joining 24 other EU states last month in agreeing the pact for stricter budget discipline, Kenny sought advice from the state's lawyer on whether a vote was necessary and told parliament that on balance, a referendum would be required.

"The Irish people will be asked for their authorization in a referendum to ratify the European Stability Treaty," Kenny told parliament, adding that arrangements on the vote would be made in the coming weeks.

"I strongly believe that it is very much in Ireland's national interest that this treaty be approved."

Unlike most other European countries, Irish citizens are entitled to vote on any major transfer of powers to Brussels. They rejected the last two European referendums, most recently in 2008, before passing them once concessions were offered.

But with the new pact set to come into effect once 12 states have ratified it, the government is likely to have just one shot at winning approval for it. That prompted the country's European Affairs minister to warn last month that it would be hard for Ireland to remain in the euro zone in the event of a 'No' vote.

"It will be pretty hard and certainly won't be a walkover. The last number of referendums have got tighter and the EU is probably less popular now than before," said Eoin O'Malley, a politics lecturer at Dublin City University.   Continued...

Ireland's Prime Minister Enda Kenny looks during a meeting with his Italian counterpart Mario Monti at the Chigi Palace in Rome February 24, 2012.  REUTERS/Alessandro Bianchi