EUROPEAN Affairs Minister Lucinda Creighton has warned that if voters say no to the new fiscal treaty, Ireland would probably have to leave the eurozone.
She said a decision on whether a referendum is necessary will be decided within week after EU leaders agree the terms of the fiscal compact designed to introduce tighter fiscal discipline through stricter budget rules today.
“If we somehow decided to opt out of that and allowed the other 16 member of the eurozone to progress and try to find a solution without us, I think it would make it almost impossible for us to continue as part of the currency union,” she told RTE.
Taoiseach Enda Kenny will hold talks with European counterparts today on the proposals.
The informal meeting of the European Council in Brussels will also focus on economic growth and jobs.
The Government said it is hoped the summit meeting will help secure agreement on the final text of the Intergovernmental Treaty to try and bring stability to the eurozone.
Leaders will also hold talks on immediate action needed to tackle youth unemployment, the single market and small and medium enterprises.
Meanwhile, Greece faces "the spectre of bankruptcy and all the dire consequences that entails", the Greek prime minister warned last night.
Lucas Papademos said that unless the country’s international backers agreed to a new bail-out, Greece would be unable to pay off its loans and be forced out of the eurozone.
EU leaders will meet in Brussels tonight amid growing concern that Greece will fail to implement the austerity measures its international backers are demanding as a condition of the latest package of financial support. Without that bail-out, Greece will be unable to repay billions of loans due in March.
Amid doubts about Greek willingness to cut spending and raise taxes, Germany has suggested that a European commissioner should take effective control of Greek fiscal policy to ensure the country accepts austerity. Evangelos Venizelos, the Greek finance minister, rejected that plan, saying it would undermine Greece’s “national identity and dignity”.
Philipp Rösler, the German economy minister, insisted that some external control over Greek policies had to be considered. “If the Greeks fail to do this themselves, the leadership and monitoring must come in a stronger way from outside, for example via the EU,” he said.