Ireland to hold referendum on EU fiscal pact

(DUBLIN) - Ireland will hold a constitutional referendum on a proposed European Union fiscal pact designed to strengthen the eurozone, Prime Minister Enda Kenny told parliament on Tuesday.

Acting on the attorney general's advice, "the government has decided to hold a referendum on this issue in which the people of Ireland will be asked to give their authorisation for the ratification of this treaty", Kenny said.

The referendum will be watched closely by the country's European Union partners as Ireland has previously sent shockwaves through the bloc by initially rejecting two treaties before passing both in second votes.

Irish authorities have not yet set a date for the referendum.

At a summit in January, 25 of 27 EU leaders backed a fiscal pact that forces countries to enshrine in national law a so-called "golden rule" to balance budgets or face automatic sanctions, in the wake of the euro crisis.

Britain and the Czech Republic are the only countries who have refused to sign up to the pact.

Kenny told the lower house of parliament, the Dail, that the treaty was "part of a package of measures being put in place in Europe, to stabilise the situation in the eurozone".

"The treaty is an important part of that package, because it provides assurance that the kinds of problem that have emerged in Greece cannot happen again," he said.

An opinion poll in January by the Sunday Business Post with the Red C polling agency found that 40 percent of voters would be in favour of the treaty, 36 percent would be against and 24 percent were undecided.

Rocked by a crash after a property boom, Ireland required an 85-billion-euro ($114-billion) rescue package from EU and the International Monetary Fund in November 2010.

Deputy Prime Minister Eamon Gilmore said voting in favour of the pact would help Ireland gain access to emergency funds in the future.

"Ratifying the Treaty will also provide Ireland with access to emergency funds in the future, if we need them, through the new European Stability Mechanism (ESM)," he said.

"Our intention is to emerge from the EU/IMF Programme without having to resort to the ESM, but the facility itself is an important backstop that will further enhance international confidence in Ireland," Gilmore said.

But diplomats in Brussels warned that a rejection of the treaty would have serious consequences for Ireland because European payments for the EU/IMF bailout would be halted.

EU enlargement commissioner Stefan Fuele said he had "full confidence" that the Irish government would "honour its commitment on the new treaty".

"The Irish people realise how important this decision is," he said.

Justice Minister Alan Shatter said that while no date had been set for the vote, it was important that Irish people be given enough time to consider the issues at stake.

"We haven't discussed the timeframe within cabinet. I am sure that is a discussion we are going to come back to," Shatter told RTE radio.

"There isn't an immediate necessity to hold the referendum within a short period of time. It is important there is a lead-in time so people fully understand the issues involved in the referendum."

Ireland has a recent history of initially rejecting amendments to its 1937 constitution to ratify EU treaties and then accepting them in a subsequent referendum.

Irish voters needed a second plebiscite in 2002 to approve the EU's Nice Treaty following a vote to reject it the year before.

Similarly, in 2009, Ireland voted strongly in favour of the EU's Lisbon Treaty, overturning a 'No' vote in a 2008 referendum that had plunged the bloc's reforms into deadlock.