Tuesday, 13 December 2011

New EU deal faces multiple referendum threats

A recent EUobserver article has highlighted how the 'fiscal compact' deal agreed at last week's EU summit could yet be scuppered by referendums and legal delays in numerous participating countries.

The deal is designed to extend EU control over the tax and spend policies of the elected national governments of its member countries by transferring greater power over national budgets to EU institutions.

Due to David Cameron's veto, the deal will now have to be agreed between the 'euro-plus' group of participating countries outside the institutions of the EU.

But according to EUobserver, "serious obstacles are beginning to materialise in Ireland, the Netherlands, Austria, Romania and Denmark, while Finland, Latvia and the Czech Republic may also present the process with additional hurdles."

Treaty hurdles

In Ireland, aspects of the deal are being put to the country's attorney-general for a verdict on whether a referendum is required, but the Irish Europe minister, Lucinda Creighton, has fed speculation by saying there is a 50/50 chance of a public vote.

Today the
Irish government has said that a decision on a referendum will not be made until March, once a final text of the deal is agreed.

In the Netherlands, prime minister Mark Rutte has insisted that a referendum would not be needed. But with a highly EU-critical party as his partner in a coalition government and the opposition Labour party saying that new elections would be required if the deal amounts to a transfer of power to Brussels, Mr Rutte may face problems getting the deal through the Dutch Parliament. The country's Socialist Party and the Greens have also called for a referendum.

In Austria, government officials have also indicated that the creation of a fiscal union would require a referendum and, in Romania, while supporting the deal, President Traian Basescu has said that a new treaty would need a two-thirds majority in the Romanian parliament and approval in a public vote.

In Finland, prime minister Jyrki Katainen has dismissed any talk of problems in ratifying the deal. But the country's constitutional committee has ruled that replacing unanimity by majority voting on the EU's bailout funds would be unconstitutional, since it could result in a loss of parliamentary control over Finland's financial contributions. According to EUobserver, a Finnish official has said that it would be "impossible" for the government to negotiate this problem away.

Denmark’s new prime minister, Helle Thorning-Schmidt, has so far not commented on whether the deal would provoke a Danish referendum, but leaders of the other two parties in her governing coalition have said that a vote might be needed. Crucial to a Danish decision may be the Red-Green Alliance, a key part of the governing coalition, which is a strong opponent of the EU’s "neo-liberal policies".

Denmark rejected euro membership in a referendum back in September 2000, so moves to allow the EU to govern the country's economic policy may be seen as a breach of this settlement.

In Latvia, the government has signed up to the 'fiscal union' deal, but many politicians have voiced a sense of betrayal over the imposition by the EU of strict austerity measures and cuts in EU structural funds. Raising the spectre of a referendum as a bargaining chip to win additional EU aid would only take the votes of 50 of the 100-member Latvian parliament.

Finally, the Czech Republic is of course home to Vaclav Klaus, the national president who
caused the EU so much trouble over the Lisbon Treaty. While a referendum would not be automatically required on the changes, President Klaus has the power at least to delay the law-making process by holding back his signature, which must be applied to all new legislation.


It looks like the EU could well be in for yet another lengthy period of introspection over their bid to create 'fiscal union' and, even if the hurdles above can all be overcome, the deal still does nothing to address the core underlying problems of the scale of debt and low growth causing problems in several eurozone economies.

It's precisely because the EU seems far more interested in itself than in advancing the measures European countries need in order to prosper in the fast-moving, 21st century world that calls in Britain for an EU referendum - such as are being advanced by groups like the People's Pledge campaign - and support for a new deal with the EU are only likely to grow.

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