Enda Kenny (Mayo, Fine Gael)

The political agreement was reached in the early hours of last weekend. Each country and its representatives will examine how this can be translated into a text which will be the basis for a decision by each country as to how it is to be implemented.

It means that at constitutional or equivalent level, what is involved will depend on the combined effect of national and European law. This is an issue that needs to be examined by legal experts both here and everywhere else. I am not qualified as a constitutional lawyer to give the formula here. However, what is necessary is that this political agreement must be teased out, analysed and understood so that the text that finally emerges can be put to the people of each of the member states by whatever facility they use. If that requires a referendum here, then that is what will happen as already outlined.

Regarding the implications of the commitment to structural deficits lower than 0.5%, the agreement states:

General government budgets shall be balanced or in surplus; this principle shall be deemed respected if, as a rule, the annual structural deficit does not exceed 0.5% of nominal GDP.

This has been discussed in the context of the Stability and Growth Pact for some time. The 0.5% figure will be taken as a rule while providing for important and necessary flexibility. It uses the phrase "as a rule", so it is not a rigid interpretation. Clearly, the language is intended to allow for exceptions. Again, this will be an all-important issue to be teased out in the complex work that lies ahead. Until that is finalised, it is too early to say what the precise long-term implications will be for Ireland, or for any other country for that matter.

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