EU Deal May Require Irish Referendum

Ireland's attorney general Maire Whelan is studying the new fiscal rules agreed at last week's EU summit in Brussels, to determine whether or not it needs to be decided upon by the Irish people in a referendum.

Any changes to EU treaties needs to be approved by referendum under Irish law, but the deal struck by European leaders last week is termed as an intergovernmental agreement.

The deal involves 26 of the 27 EU countries, with Britain opting to stay outside the arrangement following Prime Minister David Cameron's veto of proposed treaty changes.

The new accord will hold euro-zone members, including Ireland, to strict budgetary rules including: a cap of 0.5% of GDP on countries' annual structural deficits; "automatic consequences" for countries whose public deficit exceeds 3% of GDP; a requirement to submit their national budgets to the European Commission, which will have the power to request that they be revised.

The deal is aimed at reassuring financial markets that Europe's debt crisis will not be repeated.

The decision of the UK to stay outside the deal is of significant concern to Ireland, because the UK is its biggest trading partner and most important market.

Tanaiste and Minister for Foreign Affairs Eamon Gilmore said he would open diplomatic channels with London to make sure the UK is not isolated within Europe following its decision.

"Britain is our nearest neighbor, a very close friend. They voluntarily came to Ireland's assistance last year in the way of a bilateral loan," he said.

"You can take it there will be a lot of bilateral discussions between Ireland and Britain over the next period of time, both about their position within the EU, common agendas that Ireland has with Britain, and in relation to their position on this proposed agreement."

Mr Gilmore said if the attorney general concludes that a referendum is needed then one would be held, despite major difficulties in selling the deal.

While Ireland has traditionally been pro-Europe, a strong anti-EU sentiment has been growing in recent years.

This has been exacerbated by a perception that Irish taxpayers were forced by the EU to fully repay bondholders in troubled Irish banks to prevent a contagion effect on other European banks.

Former AG and Justice Minister Michael McDowell said it was his "hunch" that a referendum would be needed, but added that he had not seen the detail and text of the agreement.

Any referendum would not be held until next Spring at the earliest.