Another Lisbon Treaty hurdle may be removed as Ireland receives EU guarantees

The European Union (EU) has taken another major step forward toward implementation of its reform treaty, after agreeing on Friday to provide legally-binding guarantees to Ireland to overcome voters' misgivings.

"This decision gives legal guarantees that certain matters of concern to the Irish people will be unaffected by the entry into force of the Treaty of Lisbon," EU leaders said at the end of a two-day summit.

Ireland, which rejected the treaty in a referendum last year, agreed to have its citizens vote again in October this year to decide the document's fate.

"Any doubts that voters had last year are now clearly dealt with," Irish Prime Minister Brian Cowen said.

Surveys showed that this time a majority of Irish voters will approve the document.

The legally-binding document assures Ireland of its independent policy on various issues such as taxation, security, defense, abortion, and workers' rights.

During heated discussions at the summit, some EU states expressed concern that giving Ireland legal guarantees would further complicate the treaty's already-prolonged ratification process, as some countries may have to carry out another ratification procedure or reopen relevant debates in parliaments because of the additional protocol.

But Czech Prime Minister Jan Fischer, whose country holds the EU's rotating presidency, said the guarantees in a legal sense clarifies the treaty, and does not amend it, so it would not lead to reopening of the ratification process.

The treaty, designed to streamline EU's decision-making process with strong backing from France and Germany, has been treading a bumpy road since it was passed in October 2007 by leaders of all EU member countries. It is aimed at reshaping EU institutions and resurrecting major reform proposals embodied in the failed constitution rejected by the Dutch and the French in 2005.

In order to take effect, the treaty must be ratified by all 27-member states, and only Ireland is constitutionally bound to hold a national referendum on it.

Irish voters rejected the treaty last June, dealing a severe blow to many EU leaders who want early reform of the bloc. The Irish voters demanded that the country must maintain its long-cherished neutrality in foreign and defense affairs, as well as its sovereignty in moral and financial matters. They feared the treaty would leave Ireland, a small country with a small population, reduced veto power in the bloc under the new majority voting system.

Some voters also feared that future EU laws would tamper with Ireland's strict ban on abortion, and a centralized EU taxation system could lead to interference in Ireland's favorable and attractive system, and thus impair its economic development.

However, the global financial crisis has now changed the minds of many Irish voters.

Thanks to a 32 billion pounds (about 64 billion U.S. dollars) EU grant spread over the years, Ireland emerged from a poor, agrarian country into the second richest country (per capita) in the region after Luxembourg.

Once known as the "Celtic Tiger," Ireland's economy has not managed to escape the worldwide economic meltdown. It officially entered recession in September 2008 after two successive quarters of negative growth, becoming the first eurozone country to do so.

Official data shows that Ireland's economy contracted 2.3 percent in 2008, with a jaw-dropping 7.5 percent plunge in the fourth quarter, the worst annual performance since records began in 1947. Economists predict another 6.5 percent fall this year.

Meanwhile, unemployment in the country has jumped from 5 percent to 10.4 percent, a pace even faster than the United States.

The Irish economy has not experienced a recession since 1983, and maintained double-digit growth in the 1990s.

Its credit ranking was downgraded from the AAA to AA+ by Standard & Poor's (S&P) in March, and warned the evaluation might drop further if the country fails to rectify its public finances.

In view of the predicament, the Irish public may have realized that being isolated and excluded from the EU could hardly do any good for their economic recovery, observers said.

However, despite possible Irish approval, it is still too early to say whether the path ahead will be smooth. The Czech Republic, whose president is the strongest eurosceptic head of state in the EU, might remain an obstacle.

Although the treaty has been approved by the lower house and the senate of the Czech Republic, President Vaclav Klaus warned that he could delay the signing of the document.

Under the country's law, the treaty has to be signed by the president before it takes effect.

Klaus has strongly opposed the treaty. He believes it would breach the Czech constitution and weaken the country's international status by undermining its sovereignty.

It therefore remains to be seen whether the treaty, crucial to the EU's future development, can find its way through Irish voters and the Czech president.