Wednesday 22 November 2017

Cowen: We don't need referendum to set up bailout fund

Sarah Collins and Fionnan Sheahan in Brussels

TAOISEACH Brian Cowen assured EU leaders last night that a referendum won't be needed to set up a permanent bailout fund for countries using the euro.

Two sentences will be inserted into the Lisbon Treaty -- voted on by Ireland just 14 months ago -- to allow the 16 eurozone governments to set up a permanent bailout pot once the current fund expires in 2013.

The EU has yet to decide if the size of the fund, which Ireland is currently dipping into as part of the EU-IMF rescue package, will be increased when it is introduced permanently in June 2013.

Arriving at a summit of EU leaders in Brussels, Mr Cowen indicated yesterday a referendum would not be legally necessary to make the changes to the Treaty.

After the leaders agreed the change late last night, EU President Herman Van Rompuy said no EU country believed it needed a referendum to ratify the amendment to Lisbon.

"To our knowledge, there is no referendum needed in the member states. I said to our knowledge," he said.

European Commission President Jose Manuel Barroso described bringing in a permanent mechanism for the stability of the euro as "a major economic decision".



Agreement

"To decide on Treaty change is not easy," he said.

Aside from the Treaty amendment, Mr Barroso said the overall package of agreement on economic governance and greater economic coordination represented "radical changes".

"Today was a good day for Europe and I believe we have done what we needed to do," he said.

Agreement on the amendment to the Treaty text was reached after one-and-a-half hours of discussion. The changes will not increase the powers of the EU and only affect the eurozone, EU chiefs said.

Fine Gael leader Enda Kenny said the Treaty rejig needed to be "short, very exact and very specific" in order to avoid a public vote, which he said the Government would struggle to win.

"People's priorities are obviously focused on their own lives, on their own families, on their mortgages, on their careers, on the possibility of jobs and opportunities for their children and on the state of the political situation in Ireland," Mr Kenny said ahead of the summit.

"I think we need to sort out so many issues there before (Irish citizens) focus on the longer-term future of Europe."

A draft text drawn up by Mr Van Rompuy suggested inserting two new sentences into the treaty to allow eurozone governments to create a "stability mechanism in order to safeguard the stability of the euro area as a whole".

There is no sense yet of how large the pot would be, but EU officials say it's unlikely governments will test their electorates by enlarging the existing pot, worth €440bn.

The kitty is part of an overall mechanism worth a total of €750bn.

Mr Cowen warned that the talks would not offer a cure-all for Europe's ills.

"Clearly to address turbulence in the markets there is no one day or one initiative that will bring about the stability we need to see," he warned.

Irish Independent

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