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Tuesday 28 January 2020

Kenny seeks way to avoid referendum on tough EU rules

Fionnan Sheahan and Thomas Molloy in Brussels

TAOISEACH Enda Kenny is desperately trying to find a way to avoid having to hold a referendum on tough new EU budgetary rules, which would be difficult to pass.

Although a minister put the chances of a referendum at "50-50", Mr Kenny said he would await legal advice before saying if a vote was necessary on the deal to save the euro.

The Government is facing the tricky scenario of another EU referendum in the New Year, as the rules have to be brought in at "constitutional or equivalent level".

Mr Kenny also declined to rule out a second referendum if a possible first vote was rejected.

"In respect of the referendum, I have made it perfectly clear, this is an inter-governmental agreement. It's outside the European Union treaties.

"As is required of us, as is required of any government under the Irish Constitution, you have to have formal legal advice offered by the Attorney General," he said.

"And when the text is forwarded and analysed and worked upon from a legal point of view, from a constitutional point of view, the Attorney General will make her advice known. I am not going to give you an answer in respect of odds one way or another. I will await the formal advice of the Attorney General in due course," he added.

After failing to reach agreement across the board, the majority of EU members agreed to press ahead with a tax and budget pact to tackle the eurozone debt crisis.

By March of next year, the Government will have to sign up to a set of fiscal rules agreeing:

• Not to chalk up a deficit at all on an annual basis, once the current crisis is over.

• Tighter budgetary regulation and oversight from Brussels.

• Automatic penalties for breaking the rules.

• Not to let the national debt rise above 60pc of national income.

But European Affairs Minister Lucinda Creighton said there was a 50-50 chance a referendum would be needed for Ireland to approve the deal.

"I would say it's 50-50 and we will be looking at the detail over the next couple of weeks," she said.

Mr Kenny's demand for a deal on reducing Ireland's banking debt as part of an agreement wasn't shot down -- but neither was it agreed.

The Government wants to transfer €63bn spent on bank recapitalisation into one of the EU bailout funds and delay the repayment dates on the debt.

The Department of Finance will put its case over the coming weeks in "technical talks".

A German and French attempt to get all 27 EU states to back changes to EU treaties was dropped after objections from Britain.

British Prime Minister David Cameron had insisted on an exemption from some financial regulations for his country.

Instead, up to 26 of the 27 EU countries, including all eurozone members, will adopt an agreement with penalties for breaking deficit rules.

Mr Kenny said Britain's opt-out would not affect Ireland's trade relationship.

"The UK is our biggest and nearest trading partner. But we are all covered by the single act here within the union that allows for that to continue, so we want it to continue and to expand."

Mr Kenny also insisted there would be no threat to Ireland's corporation tax rate from the new deal.

"For us, we have already put a red line around corporate tax for a very long time, and that's an issue that is of fundamental and critical importance to the Irish economy, Irish jobs and Irish workers, and that's it -- and we have been very clear and up front on that," he said.

Irish Independent

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