Coveney: Ireland in no position to demand debt deal for yes vote

Ireland is in no position to “put a gun to anybody’s head” and demand sweeteners for a yes vote in the fiscal treaty referendum, Agriculture Minister Simon Coveney has said.

He was one of several cabinet members who yesterday insisted the referendum, and efforts to secure a cheaper deal on the Anglo bailout, needed to be kept separate. Transport Minister Leo Varadkar said it would be “unhelpful” to link the two, as such an attempt would probably be “slapped down” by Europe.

It followed comments to the Financial Times by Social Protection Minister Joan Burton that a cheaper deal on Anglo would be “helpful” in terms of passing the referendum.

Her comments appeared to be at odds with the Government strategy of keeping the two issues apart.

Negotiations on a cheaper alternative to the promissory note system funding the Anglo bailout were ongoing prior to the referendum being announced, and are now at a delicate stage. The Coalition believes the EU and ECB could react negatively to the request for a cheaper deal if Ireland seeks to use the referendum as leverage.

Mr Coveney said the fiscal treaty was “very positive” for both Ireland and the EU because it would ensure that countries met sustainable budgetary targets. “My view on this is that we should be voting yes because it makes sense to do it.”

He acknowledged that a cheaper deal could help secure a yes vote, but stressed that the two should be regarded as separate issues.

Unlike full EU treaties such as Lisbon and Nice, he said the fiscal treaty required only 12 countries to ratify it. Failure by Ireland to ratify the treaty would not prevent it coming into effect in other states. As a result, Ireland was in no position to be making demands in return for ratification, he said.

“I don’t think Ireland is in a position to put a gun to anybody’s head and say if you don’t give us X, Y and Z, well, we’re not going to vote for the treaty.”

Mr Varadkar echoed those comments

“I think in trying to achieve an enhanced bailout programme [ie, a reduction on debt], it would be unwise of us to link it to the referendum,” he said.

“It’s not going to be like Lisbon and Nice where we might be given a few clarifications and a few concessions to sweeten the deal. I think [such a demand] would be slapped down, because other countries have issues too. And if Ireland was seen to be getting special concessions based on the fact that it would help us ratify this treaty, then other countries would ask for concessions too.”

A separate government source, meanwhile, suggested it would be reckless to publicly demand a sweetener in return for ratification.

“The more we raise this at a political level, and play political hari-kari, the less likely they are to give a deal,” he said of the ECB officials involved in the talks. “They are bankers, they’re not politicians [and] they don’t look at it as politicians.”