Ireland may get concessions in exchange for 'yes' on EU fiscal treaty

Ireland being ejected from the euro is unlikely, however. The Irish Independent reports, citing an EU official, there is "no question" of Ireland leaving the euro, regardless of the outcome of the vote.

Economists and lawmakers have called for debt forgiveness in return for agreeing to sign this latest treaty.

Brian Lucey, an economist at Trinity College Dublin says the Irish economy will continue to struggle as long as it has to pay debts incurred by Anglo Irish Bank. The bank lost billions in property speculation and was subsequently nationalized by Ireland's last government, which issued more than €30 billion ($47.5 billion) worth of promissory notes on the bank's outstanding debts.  

"Economically the promissory notes are a drag on Ireland's regaining fiscal control. If the government wanted to, they could use this [referendum] as a bargaining tool to renegotiate the payment of the Anglo promissory notes," he says.  

Speaking in parliament, independent lawmaker Shane Ross, a former stock broker and journalist, echoed this view, demanding a "quid-pro-quo" debt write-off in return for a "yes" vote. 

Graham Finlay, a lecturer in politics at University College Dublin, says the opportunity for the Irish government to extract concessions on debt repayments is a real one.

"I can see people voting no unless there are concessions. Things would be extremely problematic if we rejected it, losing top-table access, but crushing us would not be in the interests of the EU. It's playing with too much fire," he says.

Opposition parties welcomed the decision to hold the vote. Micheál Martin, leader of the Fianna Fáil party that governed Ireland until March 2011, said, "I think it's the right decision and one that shouldn't have required legal advice in my view." 

Fianna Fáil will support a yes vote, as will ruling coalition parties Fine Gael and Labour, but socialist lawmakers in Sinn Féin and the United Left Alliance will campaign for a "no" vote. 

Paul Murphy, a member of the EU parliament for the United Left Alliance representing Dublin, welcomed the referendum but warned a straight question on the EU compact was necessary.  

"Politically, they'll load the question, linking it to membership of the euro [currency] but legally they may not be able to do so. It's the fear card they'll go for, primarily," he says. 

Everything remains up for grabs in the vote: an opinion poll conducted for the Sunday Business Post newspaper in January found that 40 percent of voters would vote yes to the treaty and 36 percent would vote no, with 24 percent undecided.

This story was edited after posting to correct Mr. Lucey's affiliation. He teaches at Trinity College.

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