Should Ireland - or any other country - fail to ratify the compact, it will be excluded from any future funding from the European Stability Mechanism, the new permanent EU bailout fund. The Irish Times today reported that Michael Meister, budget and finance spokesman for Germany's ruling Christian Democratic Union said: "Whoever doesn't accept the treaty has no protection from the ESM bailout fund."
Opportunity to demand concessions
The uncertainty presents Ireland with the opportunity to demand concessions from the EU on debt repayments in order to ensure that the public approves the treaty, which the EU is desperate to see passed.
Speaking in parliament yesterday, Prime Minister Kenny sought to put a positive spin on the move, saying the vote would cement Ireland's place in the eurozone.
"It gives the Irish people the opportunity to reaffirm Ireland’s commitment to membership of the euro, which remains a fundamental pillar of our economic and jobs strategy," he said in a speech to parliament.
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 were offered.
The content of the referendum question, expected to be held no sooner than May, has not been announced — and confusion reigns. In December, Irish Finance Minister Michael Noonan said it would come down to whether or not Ireland would stay with the euro currency.