24th Oct 2016


This WEEK in the European Union

  • Ireland will vote on the fiscal compact treaty in a referendum on Thursday (Photo: topgold)

Ireland will vote on the fiscal compact treaty on Thursday (31 May) amid a strong debate in the country about the exact consequences of a No.

Polls put the Yes camp in the lead (50 percent to 31 percent, with 19 percent still undecided according to a Red C poll conducted between 14 and 16 May).

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Ireland is the only member state to put the budget-balancing treaty to a vote, although the result will not affect the process of ratification elsewhere. The German-inspired document goes into place once 12 of the 17 eurozone countries ratify it. But a No vote could have economic consequences for the country, the recipient of a €85 billion bail-out in 2010.

A rejection would mean that Ireland would not have access to the eurozone's permanent bailout fund, the ESM - a fact that would likely make markets more jittery and negatively affect Dublin's hopes of re-entering bond trading in 2014.

The No camp say that this is scare-mongering. They argue that the treaty risks trapping the country in an austerity-driven downward spiral for years and claim that Ireland, if needed, could still ask for a loan from the International Monetary Fund.

On Wednesday, the European Commission is to publish its highly-anticipated economic policy recommendations for the 27 member states.

The recommendations will tell countries what they have to do to achieve the agreed economic priorities for 2012. Of particular interest will be what Brussels sets out for Spain, which is widely seen as unlikely to make its deficit-cutting target for next year amid worsening economic conditions, and France, the eurozone's second largest economy. In addition to the "country specific" reports, the commission will also publish in-depth reviews of 12 economies suffering from imbalances, including Spain, France, the UK, Italy and Finland.

Immigration issues will also feature heavily this week.

The EU's finger-printing system for asylum seekers will be given an upgrade on Wednesday, so that rules on when and how data should be entered and accessed are clearer.

The commission will also publish a report on immigration trends and a poll on migration, security and cross-border mobility. The data will come amid a rise in far-right and nationalist parties with anti-immigrant platforms. In the 6 May Greek election, the neo-facist and xenophobic New Dawn party won 7 percent of the vote, getting itself into parliament for the first time.

Meanwhile, the leaders of the political groups in the European Parliament will meet the Cypriot President and other Cypriot politicians ahead of the divided island taking over the six month EU presidency in just over a month's time.

European Central Bank chief Mario Draghi will also appear before the parliament's economic affairs committee on Thursday.

Draghi has recently begun making statements about the importance of further integration in the eurozone. But Spain has said that any moves the ECB makes to lower Madrid's borrowing costs, which are hovering near bail-out levels, would be more important than talk of long term integration.

Ceta failure deepens EU trade crisis

Canada said on Friday that the free-trade agreement with the EU had failed and that the bloc was "not capable" of concluding agreements.

News in Brief

  1. Canada and Wallonia end talks without Ceta deal
  2. Juncker hopes for Canada accord in 'next few days'
  3. Romania drops opposition to Ceta
  4. Difficulties remain on Ceta deal, says Walloon leader
  5. Brexit could lead to 'some civil unrest' in Northern Ireland
  6. ECB holds rates and continues quantitive easing programme
  7. Support for Danish People's Party drops, poll
  8. Spain's highest court overturns Catalan ban on bullfighting

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