EU treaty change to allow permanent bailout fund ‘will not need referendum’

CHANGING the EU treaty to allow for a permanent eurozone bailout mechanism post-2013 will not need to be put to a referendum here, according to Europe Minister Dick Roche. The wording of the amendment is due to be approved by EU leaders at their summit in Brussels tomorrow.

Mr Roche, who attended a foreign ministers meeting to discuss the change, said: “This text is ideal for our purposes.”

The Government, and the EU member states generally, want to avoid having citizens vote on it following the difficulties getting the Lisbon Treaty passed.

The two sentence change will be added to Article 136 saying: “The member states whose currency is the euro may establish a stability mechanism to safeguard the stability of the euro area as a whole. The granting of financial assistance under the mechanism will be made subject to strict conditionality.”

The change is being made under the so-called simplified method, using Article 48(6) of the EU Treaties, which says that changes that only affect the functioning of the EU can be made by the unanimous agreement of the member states.

Once the summit agrees to the change, they will consult the European Parliament and the European Commission as well as the European Central Bank, because it involves the euro, before the end of March.

Mr Roche said that the change using the simplified procedure is “so within the intentions of the Lisbon Treaty that it is unlikely that there will be a need for a referendum”.

He added that the amendment was very close to what Ireland was looking for and to the advice they received from the Attorney General.

However, it will be up to the AG to decide if it does or does not require a referendum once the summit agrees it.

Germany asked for the change because they believe that under their law and the current treaty provisions, they cannot agree a permanent funding mechanism for eurozone countries.

They also pushed for three elements to be added to the change — that any bailout would be subject to strict conditions, that it be given only as a last resort if the euro area was in danger and that private investors would lose some of their investment.

The first of these — strict conditionality — has been included in the wording but member states believe inserting the other two elements would mean that they could be used by investors and others to challenge the use of the fund in the European Court of Justice.

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