Brussels, 20/04/2012 (Agence Europe) - The Irish government has launched a public information campaign about the treaty to tighten budget discipline (the fiscal compact), approval of which will be the subject of a referendum in Ireland on Thursday 31 May. The government is sending each of its inhabitants a copy of the treaty, which has been agreed to by 25 EU member states (all bar the UK and the Czech Republic - see EUROPE 10566). According to a poll carried out by The Irish Times on 19 April, 39% say they are undecided, 30% would vote in favour and 23% would vote against the fiscal compact.
In a statement published on Friday 20 April online (http://www.stabilitytreaty.ie ), Irish Prime Minister Enda Kenny point out that the fiscal compact is part of current efforts to restore confidence in the stability of the euro, the single currency. Pointing out that the compact is based on existing measures like the duty to approve a balanced budget, he says that the main innovation is the demand for such measures to be nationally binding. Signatory states have been asked to introduce a budgetary golden rule into their constitution as soon as possible. Another innovation highlighted by Kenny is the creation of a corrective mechanism which would automatically come into play if there was the risk of the rules not being respected.
Asked whether this was a recipe for permanent austerity, as some have asserted, Kenny replied: “No, it is simply an agreement amongst all concerned to ensure a balance between money raised and money spent in the interest of the stability of a common currency.” He said it made sense to connect the fiscal compact with aid from the European Stability Mechanism so that only eurozone countries that have ratified the fiscal compact will be allowed to be granted aid from the ESM, a new bailout fund that comes on stream in July this year. “I think it is logical that those who are prepared to offer financial support to others in time of difficulty should be assured that those receiving it are prepared to run sound and sensible budgetary policies”, explained Kenny. Ireland is receiving aid from the European Financial Stability Facility (EFSF), but hopes to be able to roll over its debt unaided on the financial markets when at the end of its three-year aid programme. Kenny said: “I do not believe Ireland will need to access the ESM. But saying so is wholly different from saying we can look credible to the markets without access to some sort of backstop.” The ESM will come into force as soon as it has been ratified by 12 eurozone nations.
Slovenia. On Thursday 19 April, Slovenia became the third country to ratify the fiscal compact (after Greece and Portugal). Last autumn, Spain introduced a golden rule but has not yet ratified the fiscal compact. (MB/transl.fl)