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Noonan may try for rate cut deal

MICHAEL Noonan may use agreement to proposed EU treaty changes as leverage for a cut in our bailout rate.

French President Nicolas Sarkozy and German Chancellor Angela Merkel are pushing key changes in the EU treaty in an attempt to save the economic union.

One of the measures proposed is that countries using the euro would face automatic penalties if their budget deficits ran too high. But any major changes to the treaty would require a referendum.

However, the Government is keen to avoid putting the question to the Irish people as two previous European treaties were rejected here.

It's understood that the Government is pressing the EU to keep treaty changes minimal to avoid facing another referendum.

And they may offer their agreement in exchange for a cut in the cost of Ireland's bank-bailout.

"Our assessment of the public mood is that it would be difficult to get a referendum passed," said Mr Noonan. "But we're certainly not going to hold up the progress of Europe."

Minister for Social Protection Joan Burton hinted that the bailout rate would be on the table in the negotiations.

"I would think that treaty change would have to be part of a package including some of the issues Ireland has," she said.

President of the European Council Herman Van Rompuy is also eager to avoid a long drawn-out ratification procedure.

Mr Van Rompuy said the tighter budget oversight could be achieved quickly with only minor tweaks to the EU treaty.

The summit tomorrow and Friday is being billed as one of the most crucial in the EU's history.