Gilmore: Keep treaty change and debt separate

A REFERENDUM on a new EU budget plan should be kept separate from any deals on reducing Ireland’s debt burden, according to Tánaiste Eamon Gilmore.

The Labour leader’s position puts him at odds with that of Fine Gael junior finance minister, Brian Hayes, who said at the weekend that a yes vote would be easier if the EU authorities cut Ireland a better deal on repaying the bailout loan.

The Government is in talks with the IMF and EU institutions about reducing the debt burden from the bank bailout and state borrowing.

Mr Hayes said that a “significant reduction” would be required if the country was going to pass another referendum.

“The idea that we could have a referendum without that agreement, on a substantial rearranging of our debt, wouldn’t fly,” said Mr Hayes.

“We would have to have that in place before we put the question.”

But responding to the claim that such a “debt sweetener” would be required, Mr Gilmore said: “We need to keep the two separate.”

The Minister for Foreign Affairs told Newstalk Radio: “We need, in any event, to reduce the burden on the taxpayer: Referendum or no referendum; international agreement or no international agreement. We have to get a reduction on the burden on the taxpayer.

“So I think it’s important that we separate those.”

He said there has already been “some degree of success” with reducing the interest rate on the loans.

He said that discussions were continuing on restructuring promissory notes or the level of interest paid on bank debt.

Asked whether he thought a referendum was likely, he said: “We have to see what the final text is going to be of the proposed agreement.”

He said there were going to be “a lot of discussions” on whether treaty changes would be put to a public vote here.