DUBLIN (Reuters) - Ireland would need to get a significant reduction in its debt burden in order to get any referendum on new European budgetary rules passed, the country’s deputy finance minister was quoted as saying on Sunday.
“The idea that we could have a referendum without that agreement, on a substantial re-arranging of our debt, wouldn’t fly,” Brian Hayes was quoted as saying in The Sunday Business Post newspaper.
“We would have to have that in place before we put the question (to the people) and that’s beginning to be understood at an EU level, which puts us in a stronger position.”
Hayes could not immediately be reached to confirm the comments.
Ireland’s government has said it will wait until it has the final text of the European fiscal plans, probably early next year, before deciding whether it needs to hold a referendum to ratify the agreement.
The EU said on Friday that once nine euro zone countries have ratified the agreement, which binds members of the currency bloc into tighter fiscal rules, it will come into force, meaning the bloc would not need to wait for Irish ratification.
However, an Irish “no” vote would create problems for both Dublin and Brussels by cementing the idea of a two-speed Europe and raising questions over Ireland’s commitment to the euro.
Even before the possibility of a referendum was raised, Irish officials had been trying to persuade their creditors at the ECB, the EU and the IMF to reduce the burden of Irish debt by cutting the cost to the government of bailing out its banks.
Ireland would potentially like to use changes agreed to the euro zone’s rescue fund in July to refinance the cost of rescuing its banks, at the heart of its financial crisis.
The interest bill alone for bailing out Anglo Irish Bank and Irish Nationwide Building Society comes to 17 billion euros.
Lengthening the period to repay the 30 billion euros in promissory notes or IOUs used as a lifeline for Anglo and Irish Nationwide would help, Hayes said.
“We’re going to pay back our debts - that’s a very important message. But we want a longer period of time to do it, to refloat the economy and to get growth of two to three percent.”
Reporting by Carmel Crimmins; Editing by Alistair Lyon