The compact imposes stringent budget controls on eurozone members. It requires that structural deficits not exceed 0.5 percent of GDP and that debt-to-GDP ratios be lowered to 60 percent and kept at or below that level. Countries that run up excessive deficits will be subject to direct EU intervention in their economic policies.
The electorate in Ireland has a history of rejecting EU treaties, most recently in 2008, with the Lisbon Treaty on reformed Europe-wide governance. The treaty eventually passed in a repeat referendum, but only after concessions to Ireland.
In theory an Irish rejection could damage the treaty, but it is more likely to hurt Ireland. If the country is kept outside the deal agreed to by the other EU members (25 including Ireland, which agreed provisionally), any future funding from the EU and European Central Bank would be frozen.
The euro dipped against the dollar as news broke, but has since recovered.
An opportunity to demand concessions
The content of the referendum question has not been announced — and confusion reigns. In December, Irish Finance Minister Michael Noonan said the question would come down to whether or not Ireland would stay with the euro currency.