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Debt Crisis: Opposition leaders call for referendum before new treaty can be introduced


Mr Kenny and
French President Nicolas
Sarkozy enjoy some
horseplay at yesterday's
European Council meeting
in Brussels

Mr Kenny and French President Nicolas Sarkozy enjoy some horseplay at yesterday's European Council meeting in Brussels

Mr Kenny and French President Nicolas Sarkozy enjoy some horseplay at yesterday's European Council meeting in Brussels

OPPOSITION parties have called for a referendum on the new European fiscal compact designed to rein in Government spending and reduce the budget deficits in the area’s countries.

Fianna Fail leader Micheal Martin said the people should be consulted on any changes and are “being kept in the dark.”

Sinn Fein’s Gerry Adams dubbed the agreement an “austerity treaty.”

He added: “The Treaty involves the surrender of important Irish fiscal and budgetary matters to un-elected and unaccountable EU officials and the imposition of drastic and destructive austerity.

The Government could face a major court battle if it refuses to put the new European treaty on budget rules to the people.

Opposition parties have warned they are seeking legal advice to ensure the public gets a say on whether tough fiscal rules agreed by European leaders are imposed on Ireland.

The Attorney General Maire Whelan will determine whether a referendum is required over the next few weeks.

Speaking after a Brussels summit last night, Taoiseach Enda Kenny said the AG, Maire Whelan, would be under no pressure to reach her conclusions.

Twenty-five out of the 27 EU member states signed up to the new fiscal stability union which involves stricter rules for Government spending and budget.

The treaty contains a get-out clause whereby the Government does not necessarily have to insert it into the Constitution, making a referendum less likely.

Mr Kenny refused to predict what the advice of the Government's legal adviser would be.

"Far be it from me to presume to speculate. You only amend the Constitution in our country if you have to," he said last night.

Mr Kenny said the Government had nothing to fear about holding a poll. If a vote is needed, it has until the end of this year to hold the referendum.

At the end of an EU summit late last night, Mr Kenny did not give any timeline on when the AG will have to come back to ministers with her opinion.

But Tanaiste Eamon Gilmore admitted the Government expects the new rules to be challenged in the Supreme Court if there is no referendum.

"I think it's been almost consistent that virtually every European treaty has resulted in some challenge in one form or another in the courts," he said.

The deal struck in Brussels also does not include any specific reference to a tax on banking transactions or giving up our low corporation tax rate -- but they remain on the table.

The Coalition has until January 1, 2013 to put the treaty fully into law . A failure to adopt the new rules will mean Ireland not being able to access future bailout funds from March 2013.

The treaty also bulks up the bailout fund and creates a €500bn pot for countries in financial difficulty.

Ireland was one of 10 countries that did not want the new treaty to be inserted into its Constitution. Before Christmas, the push was for it to be ratified at "constitutional or equivalent level". But the final text of the treaty says the debt brake, preventing Government's from borrowing, only has to come into effect in national law and be "preferably constitutional".

Germany led the demands for the strongest possible guarantees that the rules would be enforced, insisting it would have to be in the constitution of eurozone members.

Meanwhile, Mr Kenny did not raise the issue of the Anglo promissory notes at the summit, despite his Government's repeated warnings that some sort of deal on the method used to pay for the nationalisation of Anglo Irish Bank is essential to the country's economic survival.

Officials said before the end of the meeting that he was not raising the thorny problem of the promissory notes which will force the Government to borrow €3bn a year every year for at least a decade. He did, however, give a talk to his fellow leaders about the importance of small and medium-sized firms to the European economy.

Earlier this month, Finance Minister Michael Noonan said "technical talks" were being held in Brussels to find some sort of mechanism to enable the Government to delay repaying the money needed to bail out Anglo.

Any changes will need the unanimous support from all of the other 26 member states. The Government has been at pains to argue that there should be no direct link between a deal to reduce our debt burden and a deal to reform the treaty governing a debt brake.