Posted by Eoin O’Malley (26 April, 2012)
François Hollande had made it clear in campaigning for the French presidency that he was no fan of the Fiscal Compact and indicated that he would be against French ratification of the Treaty. Now that his election looks more than likely he has again stated his opposition to the Treaty. In today’s Irish Times he is reported as saying
“There will be a renegotiation. Will the Treaty be changed? I hope so. Or another Treaty arranged? That is up for negotiation. But the Treaty, as is, will not be ratified.”
Now obviously French ratification of the Treaty doesn’t matter in a legal sense, it can still go ahead. But politically we know it is unlikely that France and Germany, the two biggest economies in the Eurozone, would allow it be put in force if both were not signed up.
This takes us to the wording of the Irish Bill on the change to the constitution currently going through the Oireachtas. It indicates that the likely addition to the constitution will take a form of words such as this:
“The State may ratify the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union done at Brussels on the 2nd day of March 2012. No provision of this Constitution invalidates laws enacted, acts done or measures adopted by the State that are necessitated by the obligations of the State under that Treaty or prevents laws enacted, acts done or measures adopted by bodies competent under that Treaty from having the force of law in the State.”
This is to be inserted as Art. 29.4.10°. Now Hollande may change his mind once elected (it’d hardly be the first time a politician changes his mind once in office) and if the Irish vote yes, this won’t be a problem.
But if there is a renegotiation, then the Irish vote will irrelevant – the Treaty agreed on the 2nd of March won’t be the one we will then want to ratify. We cannot change the words to accede to a Treaty that is to be negotiated at a future date. We could just put in a wording that says that no Irish government will be allowed to run a long-term structural deficit (although it wouldn’t be pretty to watch the Supreme Court trying to agree a definition of what that might be). This would have us insert in our constitution the main provision of the Treaty and what the Germans really want us to do. An alternative might be to postpone the referendum and wait until after the summer, though this might renew the sense of crisis in the Eurozone, with Ireland at the centre of the crisis.
An obvious compromise, and one that they seem to be working towards, is to have a new Treaty, a so-called ‘Growth Compact’ referred to by Mario Draghi on Wednesday. This could allow the Fiscal Compact Treaty remain unchanged in return for German acceptance that Europe needs to put more emphasis on growth (what this Treaty might look like is unclear).
Regardless of what eventually happens, Hollande’s intervention could be seized on by No campaigners as a way to increase uncertainty – the Yes side is banking on the certainty the Treaty might give as its way of framing the campaign. Just look at how it’s effectively renamed the Fiscal Compact the ‘Stability Treaty’. Hollande seems to be encouraging the Irish to vote no (see the IT report). It could be the sort of insurance policy potential Irish no voters want, that is, if we were to vote no, we’d have a big country with us and so would not be isolated.