What exactly will we be asked in the fiscal treaty referendum?

Nat O'Connor02/03/2012

Nat O'Connor: The Taoiseach has signed the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union (also known as the 'fiscal compact' or the Fiscal Stability Treaty). However, it will only be ratified by Ireland if it is agreed by the Irish people in a referendum.

There is still some uncertainly about what exactly we will be voting about. Putting a debt brake in the Constitution would be a very different prospect from merely a ratification clause. We will know more when we see the actual wording of the referendum. Will it be simply "The State may ratify..." or will it include other constitutional changes and some formula of words in the Constitution to create a "binding, permanent" mechanism that will constrain future governments in relation to fiscal policy and how they deal with deficits and the national debt?

At this time, the advice of the Attorney General has not been published, so we do not know why a referendum will be held. We can probably assume that it is for the usual reason. That is, Ireland has had a series of referendums (modifying Article 29 of Bunreacht na hÉireann) to permit the Government to ratify European treaties such as Maastricht, Amsterdam and Nice. The wording of Bunreacht na hÉireann for recent treaties is straightforward: “The State may ratify the Treaty…”

On that basis, it is likely that the reason for Ireland to hold a referendum is again for the people to give the State permission to ratify the Fiscal Stability Treaty.

However, a second potential reason for Ireland to hold a referendum comes from the working of the Treaty itself. The Treaty calls for the Contracting Parties to "transpose the 'balanced budget rule' into their national legal systems, through binding, permanent and preferably constitutional provisions". Although there is no obligation in the Treaty to place the balanced budget rule (or 'debt brake') in Ireland's constitution, there is an implication that the rule should be transposed in a way that is stronger than ordinary legislation. The creation of a "binding, permanent" provision may therefore be part of the reason why Ireland is having a referendum. When we have clarity on this matter, it will easier to judge the long-term economic and democratic impact of the referendum.

Posted in: PoliticsEconomicsFiscal policy

Tagged with: Constitutiondebt brakeFiscal Stability Treaty

Dr Nat O'Connor     @natpolicy

Nat O'Connor

Nat O’Connor is a member of the Institute for Research in Social Sciences (IRiSS) and a Lecturer of Public Policy and Public Management in the School of Criminology, Politics and Social Policy at Ulster University.

Previously Director of TASC, Nat also led the research team in Dublin’s Homeless Agency.

Nat holds a PhD in Political Science from Trinity College Dublin (2008) and an MA in Political Science and Social Policy form the University of Dundee (1998). Nat’s primary research interest is in how research-informed public policy can achieve social justice and human wellbeing. Nat’s work has focused on economic inequality, housing and homelessness, democratic accountability and public policy analysis. His PhD focused on public access to information as part of democratic policy making.


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