herald

Friday 22 September 2017

Kenny dodges vote on straitjacket EU treaty deal

CRITICS have today accused the Taoiseach of placing the country in an "economic straitjacket" - having returned from Brussels with no guarantee of a reduction on our bank debts.

Ireland's entire financial affairs are now the subject of immense scrutiny, after European leaders agreed on a deal rubberstamped by German interests.

Enda Kenny today formally asked the Attorney General Maire Whelan for advice on whether Ireland should hold a referendum on the new EU fiscal treaty.

However, Government sources today admitted that it is "unlikely" we will go to the polls due to a get-out clause inserted in the treaty text.

The agreement - signed off in Brussels last night - imposes strict limits on how much states can borrow.

Prohibited

Countries like Ireland will be prohibited from spending more than it takes in - due to the introduction of what is known as a "debt brake".

The Coalition has until January 1 2013 to sign the treaty into law here.

A failure to do so will freeze our bailout funds from March of next year - meaning that a 'No' vote in a referendum would cause pandemonium right across Europe.

The treaty will also ensure that Ireland and other euro zone members holds special financial summits twice per year. It also creates a €500bn bailout - aimed at preventing further austerity.

However, there are now major fears of a two-tier Europe emerging, with the Czech Republic and our biggest trading partner, the UK, snubbing the Treaty.

Critics have pointed to the fact that the deal is a major triumph for Germany, with its Chancellor Angela Merkel getting her way on the majority of issues.

Victory

Financial commentator Vincent Boland dubbed the Treaty a "victory for Merkel". "I think this is very much a German pact and a German agreement. Everyone signed up to a German agenda. So it is very much a victory for Angela Merkel," he told RTE's Morning Ireland.

Ms Merkel is expected to now push for the creation of a eurobond system, which would see the Eurozone borrow as one collective entity, similar to the US.

Meanwhile, the Government was today nervously awaiting the advice of Ms Whelan -- knowing that if the Treaty went to a referendum it would face an major uphill challenge.

Fianna Fail Finance spokesperson Michael McGrath said that the Treaty effectively puts a "gun to the head" of bailed out states by threatening to cut off their money supply. He added, however, that his party would be seeking a public vote on the issue, and may mount a Supreme Court challenge to force the government to hold a vote. "We accept certainly there is a need for fiscal discipline on budgetary matters but it really only is part of the solution," he said.

hnews@herald.ie

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