Ireland faces fresh vote on EU Treaty

The spectre of yet another EU Treaty change and the possibility of another Irish referendum was on the cards last night in a move that would further delay any resolution of the country’s banking debt.

Germany, Sweden, and Poland believe the change is needed to set up the single bank supervisor for all EU banks — a key move in breaking the vicious circle between banks and state finances.

While Ireland spoke out against treaty change during a meeting of finance ministers in Brussels and is supported by most other members, it will take only one country to veto the European Central Bank becoming the supervisor.

It could take up to a year for lawyers to come up with new wording, the member states to agree to it, and countries, including Ireland, to hold referenda or have it passed by their parliaments.

The plan was to have legislation for the supervisor in place by Jan 1, so the ECB could roll out the new system over the following months.

Ireland hoped its bid to recoup as much as possible of the €32bn put into banks, including Allied Irish Bank, would be dealt with by the middle of next year — but the latest move could push that out much further.

Germany wants to slow down the whole process of a banking union as they fear it will result in them bailing out other banks — and especially past debt such as Ireland’s.

They insist that a single bank supervisor must be in place first before they even consider moving on to a common deposit guarantee scheme and a fund to wind up troubled banks.

Now they say that the plan to give non-eurozone countries an equal say to eurozone countries on the new bank supervision board needs a treaty change.

Swedish finance minister Anders Borg was supported by Germany’s finance minister Wolfgang Schäuble and British chancellor of the exchequer George Osborne, while Poland, Austria and Finland said it would be the preferred option.

Finance Minister Michael Noonan played down the possibility of treaty change, saying the majority believed there was no need to change the rules.

Other Irish sources said it might be just a technical change that would not need a referendum.

The European Commission said it will try to come up with changes that do not trigger treaty change but commissioner Michel Barnier said that it may be necessary to change the treaty later in the process.