Will there still be a Fiscal Treaty by the time the Irish vote on it?

An Irish flag flies next to a symbol of the euro currency at the entrance of the European Parliament in Brussels. Photo: Reuters

The victory of François Hollande in ten days time is not yet inevitable, but is looking more and more likely. The polls continue to show him with a lead of around 8% over Nicolas Sarkozy, and that margin has been the same - or greater- for some months now. It may already be too late for the President to turn this around.

Which leaves many in Europe actively planning for life with a socialist in the Elysée for the first time in 17 years. If the rhetoric is to be believed, ‘Merkozy’ is dead and ‘Merkollande’ may simply never happen. The Franco-German ‘motor’ that has driven so much European policy making and integration is spluttering. Sarkozy allowed himself to be convinced by Merkel that ruthlessly imposed austerity was the only way out of the debt-crisis. Hollande will not.

Official campaign posters for French President Nicolas Sarkozy and Francois Hollande. Credit: Reuters

So where does that leave the ‘Fiscal Compact’, the treaty binding its 25 signatories to budget deficits of 3% or less, in perpetuity? Hollande insists it’s toast. “The treaty in its current state will not be ratified by France” he said in a speech this week. The first thing he will do on assuming office, he promises, will be to send a memo to all EU leaders demanding a renegotiation that will include a commitment to a growth strategy, the creation of Eurobonds and an Financial Transaction Tax. On Eurobonds, in particular, he is heading for a full on collision with the immovable object that is Angela Merkel.

German Chancellor Angela Merkel. Credit: Reuters

Even if Hollande’s threat to the renegotiate is all talk and no trousers, there are Parliamentary elections immediately after the Presidential vote, and Marine Le Pen’s Front National may do very well. They have no seats in the Assemblée Nationale at the moment, but that may change. The process of ratification may not be as smooth as had once been hoped.

Only one country (Portugal) has so far ratified this treaty, and the way things are going it may be both the first and the last. Several German MPs are already talking about delaying the ratification process in the Bundestag if Hollande wins, on the eminently practical grounds that there’s little point in ratifiying a treaty that’s about to be re-written.

The Dutch, who since Monday no longer have a Government, are going to find ratification difficult before they hold fresh election (probably in September but maybe in June), and, if extremists like Geert Wilders of the far-right to well, it may be even more difficult afterwards.

Protesters against European Union leaders' plans to ignore the Irish "no" vote in Brussels in 2008. Credit: Reuters

Which all leaves the Irish in something of a dilemma. With admirable Euro-enthusiasm Enda Kenny decided to get on with the referendum and scheduled the vote for May 31 - which may be exactly the moment that negotiators in Brussels are tearing it up and starting again. At best, the Irish people are going to have a pretty fuzzy idea of what exactly they are being asked to put their name to. Which may be a very good reason for saying 'no'.

The ‘Yes’ campaign still have a lead in the polls, but it’s a slim one and almost 4 out of 10 are saying they have yet to make up their minds. Of course there is the threat hanging over the Irish people that if they say ‘no’ they will never again be able to go to Europe for emergency funding. But fear only goes so far.

They knew when they wrote this treaty that it might not survive the demise of Nicolas Sarkozy. They gambled that either he would cling on, or that Hollande would back down. But maybe neither of those things will happen. What then?