Irish Vote on EU Treaty Due, Could Alter Europe’s Future

The recently agreed European Union treaty is about to get its first popular vote test, courtesy of Ireland. Irish Prime Minister Enda Kenny told parliament today that he would be calling a referendum before summer on the new treaty.

This is not something the Irish government, or indeed any EU government, wanted to have happen. That’s no surprise really, given that the people are the ones who are suffering under the austerity rules ordered by the EU, and given a chance to express their opinion are likely to reject the new treaty.

The Irish people rejected the first EU treaty change in 2007, forcing the continental government to make alterations before the Irish accepted the second offering. The country was basically forced to accept the second version in order to avoid a bankruptcy. Ireland’s former prime minister, John Bruton, has cautioned that a rejection of the new treaty could force the country out of the eurozone.

Under the recent EU treaty, rules governing sovereign debt limits must be embedded in each Eurozone country’s own constitution. The UK rejected the idea out of hand, which was no big deal because it is not a member of the eurozone. Ireland’s constitution, however, requires a popular vote before any transfer of sovereign power to another government, such as the EU. The Irish government wanted to avoid a referendum because the current austerity measures are hammering Ireland, and the handwriting is pretty much on the wall regarding the outcome of such a vote.

And it’s not just the weaker economies like Ireland, Greece, Portugal, Italy, and Spain that would face popular opposition to the new treaty. Finland, Slovakia, Denmark, Sweden, and the Czech Republic have also indicated opposition to the requirement that budget targets be incorporated into sovereign constitutions. A majority of 12 of 17 eurozone members is needed to adopt the treaty and its budget targets.

Germany has pushed hardest for targets to be included, essentially demanding targets in exchange for continued financial support for EU bailout programs. French President Nicolas Sarkozy has already rejected the idea of putting the treaty to a vote if he should win re-election in the two-round process taking place in April and May.

If Ireland votes to reject the budget rule, the EU and the euro itself could be in serious trouble. The recent agreement with Greece, and the resulting improvement of hopes for an economic recovery in Europe could go out the window if Ireland rejects the new treaty. That would not be a good day for the EU.

Paul Ausick