Activist says Irish need EU sweetener to pass treaty

MAYNOOTH, Ireland Thu Mar 1, 2012 10:47pm GMT

MAYNOOTH, Ireland (Reuters) - An Irish referendum on the European Union's new fiscal compact is likely to fail unless Brussels offers the country a financial sweetener, one of the leading forces behind Ireland's 2008 rejection of the Lisbon Treaty said on Thursday.

Businessman Declan Ganley's campaign against Lisbon stopped all other EU states adopting it before EU concessions helped convince the Irish to vote 'yes' a year later. Ganley said he might support the latest, German-led, treaty, but only if Brussels offered Dublin better terms in bailing out its banks.

"It's entirely winnable if Europe wants this thing to go through and if the deal that we can put together is a deal that makes sense for this country," Ganley told reporters.

"If there isn't something concrete on the table, it is going to be much harder to get it passed. Something's got to give." The chances of a 'yes' vote were around 50-50, the telecommunications entrepreneur said.

Prime Minister Enda Kenny surprised parliament on Tuesday by announcing the vote, the first and possibly only plebiscite across the bloc on stricter rules enforcing deficit-cutting and debt reduction.

The treaty is still likely to come into force without Ireland's support - it only requires 12 states' backing - however a rejection by Irish voters could damage the country's long-term funding prospects and cast doubt over its commitment to the single currency.

A 'no' would also prevent Dublin from tapping the European Stability Mechanism (ESM) - the permanent successor to the euro zone's current rescue fund which Ireland is using as part of its bailout through to next year.

Voter support for the EU has waned in Ireland as living standards have dropped, a trend often blamed on Brussels-mandated austerity measures.

Ganley said he would decide whether or not to campaign for the treaty only once it was clear whether Ireland would be offered better loan terms from the EU, European Central Bank and International Monetary Fund which it uses to refinance its banks.

Two ministers in recent months have suggested an easing of Ireland's loan terms - something Irish officials have been trying to renegotiate - would help secure a 'yes' vote, however Prime Minister Enda Kenny rejected any such linkage.

"These are entirely separate matters. The Irish people are not going to be bribed," Kenny told state broadcaster RTE on Thursday.

As well as their initial rejection of Lisbon, Irish voters

also voted 'no' to the Nice Treaty in 2001 before passing it in a repeat referendum the next year, again following EU concessions.

(Reporting by Conor Humphries)