GERMANY AND other wealthy EU states should make it clear to bailout recipients such as Ireland that further help will be available to them if they adopt Europe’s new fiscal pact, former EU commissioner David Byrne has said.
Mr Byrne said it was perfectly reasonable for Germany to push for a new treaty and he believed the measures under discussion to enforce EU budget rules were “far from shocking”. Missing from the debate, however, was an unambiguous message that there would be a positive result for stricken countries if they entered the pact. “It’s not said publicly.”
The new treaty was the first phase of a process but there was not enough clarity over what was likely to happen in the second phase once the pact was in place and working, he said.
Mr Byrne, a former attorney general, held the health and consumer protection portfolio in the commission between 1999 and 2004. He now works in business.
"It would be really such a help if some of the leaders of the donor member states, the wealthy member states, could identify with that concern and give greater expression to the good outcome that comes about as a result of this first step being taken," he told The Irish Times.
Asked whether he was referring to the introduction of eurobonds after the pact was proven to work, he said he had “something along those lines” in mind.
“I have the feeling that implied in all of this is that if we do this what will follow will result in an outcome that will assist the member states, particularly the [bailout] programme countries,” he said. “If that message were a little bit less implied and more expressed, you have the feeling that the citizens of those countries who are being faced with these austerity measures would see that there’s some light at the end of this tunnel.”
Mr Byrne added that, if this “were made more explicit, people would have a sense that there’s a purpose to this, that there is an outcome to this and that we’re going to get out of this, our kids will be okay . . . and there’s a future. The growth part of the debate needs to be made.”
This was crucial, he said, given the social unrest in some states. “There hasn’t been any social unrest in Ireland worth talking about, which we’re all glad to see, but there has been social unrest in other countries and I think that hasn’t been taken properly into account by some of the political leaders. People need hope.”
Without seeing the text of the final treaty, Mr Byrne said it was difficult to say whether a referendum might be required in Ireland. He added, however, that it was by no means certain that a public vote would be required.
“The creation of the most benign atmosphere from the European perspective in the context of such a vote would obviously be advisable and I’m sure the political leadership in Europe know that. This is all assuming that a referendum is necessary and I’m not for a moment saying that it is.”
He agreed with Peter Sutherland – one of his predecessors as an EU commissioner and attorney general – that any euro country which failed to ratify the treaty might end up dropping out of the single currency because it would not be entitled to aid from the EU’s permanent bailout fund. “I think there is a substantial risk of that.”
