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The Irish ‘no’: Plan B

Incentives are extremely misaligned when a small-nation electorate can punish ‘Brussels’ and its own political class at little or no cost. Ireland represents 1% of the EU, so 99% of the cost of the ‘no’ falls on other members. This column proposes a radical solution – the other EU members should propose to leave the old EU and create a new one with the Lisbon Treaty as its founding document. The Irish would then have to decide whether they’re in or out.

The official mantra after the No in Ireland seems to become “let us continue with the ratification process”. This is a high risk strategy since Ireland’s veto power will continue even if all other 26 ratify. The Irish electorate will know this and thus have little reason or incentive to vote differently at second referendum. But if this second referendum in Ireland fails the EU would have no fall back position.

The No vote in Ireland has exposed a glaring inefficiency in the legal structure of the EU. Simply put, the requirement of unanimity creates a giant external effect: A No vote imposes a high cost on all EU members. However for the electorate in any one country, especially a small one, it is entirely rational to vote no. They can thus punish at a low cost to themselves in one go ‘Brussels’ and their own political class. Ireland represents 1 % of the EU; 99 % of the cost of a badly functioning Union is thus borne by the other 26 member state. No political system can long survive such a misaligned incentive structure.

It is thus high time to ensure that reforms of the EU cannot be held up by any one country. Just proceeding with the ratification of the Lisbon Treaty would not achieve this since the Lisbon Treaty is an amending Treaty, which modifies the Nice Treaty, which can only be done with the consent of all 27 countries.

Remove the Irish veto

However, a slight twist to the official line could change the tables completely. Indeed, the solution to the ‘Irish crisis’ could be simple if the other countries are really determined to go ahead. At the forthcoming European Council member countries could simply sign the consolidated text of the Treaties which results from the incorporation of the amendments of the Lisbon Treaty into the old Treaty.1 This consolidated text has recently been officially published.

The Irish government could at this time not put its signature to such a Treaty since its population has just voted against it. It would, however, be important not to give the impression that the other members try to exclude a country which has been a successful member of the EU for 35 years and which has not shown signs of having turned Euro-sceptic in general. Hence, the Irish government should be invited by the European Council to submit within in a reasonable time period a set of protocols, or opt outs, which would allow it to sign the consolidated text and have a reasonable certainty that the next referendum would have a different outcome.

In the meantime, the consolidated text would thus be signed by 26 (perhaps 25 if the Czech government judges that ratification is difficult) member countries.

Ratification of the consolidated text should be possible to achieve within a short period of time as no further referenda would be necessary and all 26 (25?) are committed to ratify the Lisbon Treaty using parliamentary procedures (with 18 having already done so).

In those 18 countries in which the Lisbon Treaty has already been ratified it should actually be possible to use an accelerated procedure to (re-)ratify the consolidated text, which contains after all exactly the substance of the Lisbon treaty, only that this substance, which has to be read with the previous treaties, has been consolidated in one text and thus constitutes a legally a new Treaty. The only difference with the text already ratified would be that the new Treaty would have one (two?) signature(s) less. National parliaments in these 18 member countries could thus be invited to (re-)ratify the same substance once more using an accelerated procedure.

In those countries in which the ratification process is still going on the government could inform its Parliament(s) that it is now able to present them with the consolidated text which results from the incorporation of the amending Treaty already under consideration. This should not delay ratification unduly.

A ‘new’ EU: the nuclear option

Once all 26 have ratified the consolidated text it would be ready to enter into force among them. Technically this could be achieved if the ‘gang of 26’ renounce their membership of the ‘old’ EU. The 26 can do this at any time since the EU Treaty is just an international treaty and standard principles of international law state that any nation can renounce participation at its pleasure. In this way, the consolidated text would represent the founding treaty of the “new EU”; a new coherent treaty and it could enter into force once all the 26 member countries have ratified it.2

However, before this last step (the ‘nuclear option’) happens it would be entirely appropriate for the Irish government to call a second referendum. This referendum would then be about a different question. The question would be whether Ireland wishes to join the new EU with the Lisbon Treaty in force. At this point another No would mean effectively that Ireland would leave the EU. The tables would thus be turned. There would no longer be an external effect. The main cost of a second No would have to borne by the Irish. Under these circumstances it is highly likely that Ireland would then choose to remain in the EU even if this meant to accept the essence of the Lisbon Treaty (maybe with some additional protocols as a face savings device).

Note this sort of join-us-or-not strategy was applied when the GATT became the WTO in 1994. At the time, it was called a “Single Undertaking”. It forced developing nations, who had typically been free to pick and choose among GATT disciplines, to choose between taking all the WTO disciplines or none – they all choose the former.


1 The EU’s fundamental law is the “Treaties”, i.e. the Treaty of Rome (officially, Treaty establishing the European Community) and the Maastricht Treaty (officially, Treaty on European Union) as modified by the many Treaties adopted since 1958. New treaties, like the Lisbon Treaty, are a list of amendments and deletions that apply to the existing Treaties – this is why they are so hard to read. A ‘consolidated text’, which is are-writing of the treaties with all the amendments inserted, makes it much easier to understand what the law says.

2 To minimize further risks it would be desirable that the consolidated version be augmented by only one article which would state that this (new) Treaty will enter into force (among those which have ratified) once it has been ratified by an overwhelming majority of the present members of the EU (e.g. 9/10 member states representing at least 90 % of its total population of over 500 million). However, this would not be necessary at this point since all 26 have committed to ratifying the Lisbon Treaty and this change would represent an important departure from the present text, thus possibly delaying ratification.