U.S. billionaire Wilbur Ross, whose company has invested in Bank of Ireland Plc, said Irish voters may initially reject a European fiscal compact before approving the accord in a second vote.
Unlike previous referendums, an Irish rejection of the euro region’s latest financial agreement wouldn’t veto the deal for the rest of Europe. Ireland will be ineligible for the permanent European Union bailout fund, the European Stability Mechanism, if it didn’t ratify the compact in a referendum due to be held later this year.
“Despite that, there is some chance that this will be turned down in the first ballot and then hopefully approved the second time around,” Ross said in an e-mailed response to questions, adding that “hopefully” the EU will make some concessions to Ireland ahead of balloting.
Ireland is discussing with the so-called bailout troika of institutions, the International Monetary Fund, the European Central Bank and European Commission, methods of reducing the cost of rescuing the former Anglo Irish Bank Corp. and Irish Nationwide Building Society. The state has injected about 62 billion euros ($81.3 billion) into the financial system.
An accord on the banking debt would be “hugely significant,” Irish Energy Minister Pat Rabbitte said in an interview with Dublin-based RTE Radio today. “It would be a psychological boost to the morale of the Irish people.”
Two polls, published by the Sunday Business Post and Sunday Independent newspapers on March 5, show the “yes” side has a lead of about 20 percentage points as the campaign opened. Irish voters rejected changes to Europe’s governing treaties in 2001 and 2008, before reruns passed the proposals.
Ross was one of five investors who last year bought a 35 percent stake in Bank of Ireland, the country’s biggest lender. The lender is the only domestic bank to stay out of majority state control.
Prime Minister Enda Kenny, speaking in parliament yesterday, said the government had not yet fixed a date for the vote. The compact agreed to by 25 of the EU’s 27 members requires nations to virtually eliminate structural deficits, creates an “automatic correction mechanism” and enshrines the new measures in national law.
The treaty also provides for tighter control of tax and spending by governments that overstep the bloc’s deficit limit of 3 percent of gross domestic product.