Ireland's top union body fails to endorse EU treaty

(DUBLIN) - Ireland's trade union umbrella body failed on Wednesday to endorse the European Union's fiscal pact treaty which will be put to a referendum on May 31.

A spokesman for the Irish Congress of Trade Unions (ICTU), which represents 55 affiliated unions, said the failure to direct its 600,000 members on how to vote on the treaty was "exceptional".

"In more recent times, in the last 10 to 20 years, there has been an endorsement (of EU treaties)," the spokesman said.

After a meeting of its executive council to consider the treaty, an ICTU statement said it was agreed that "individual unions could advise their members on the referendum, on foot of their own deliberations on the issue".

ICTU general secretary David Begg told the meeting that Ireland -- which required an 85 billion euro ($112 billion) bailout in 2010 -- would find itself "between a rock and a hard place" if it voted against the treaty.

Voting 'no' would mean Ireland could not get access to the new European Stability Mechanism (ESM), designed to prevent future crises in the eurozone.

"As things stand the State will run out of money by late 2013/early 2014. Unless we are in a position to go back to the markets before then we will need a second bailout.

"The existing source of funds, the EFSF, will be closed off or integrated with ESM. Unless money is available from some source the alternative would appear to be a Greek style sovereign default while remaining within the euro.

"This would involve a fairly quick and brutal alignment of revenue and expenditure with consequences for taxation, welfare and public sector employment," Begg said.

Ireland was forced to seek a bailout two years ago when massive debt and deficit problems left it on the verge of collapse.

Opinion polls are showing that while the 'yes' campaign is in the lead in the referendum campaign, many voters do not understand the treaty and have yet to make up their mind how to vote.

Ireland's referendum is expected to be the only plebiscite in an EU country on the pact, which is designed to strengthen the euro through tighter oversight of public finances.

The referendum will be watched closely by Ireland's EU partners because it has a recent history of initially rejecting EU treaties in referendums and then accepting them in subsequent votes.