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Cablegate: Irish Deputy Prime Minister Assesses Lisbon Treaty

VZCZCXRO3375
PP RUEHAG RUEHROV
DE RUEHDL #0431/01 2041452
ZNY CCCCC ZZH
P 221452Z JUL 08
FM AMEMBASSY DUBLIN
TO RUEHC/SECSTATE WASHDC PRIORITY 9344
INFO RUCNMEM/EU MEMBER STATES PRIORITY
RUEHBL/AMCONSUL BELFAST PRIORITY 0781

C O N F I D E N T I A L SECTION 01 OF 02 DUBLIN 000431

SIPDIS

E.O. 12958: DECL: 07/23/2018
TAGS: PGOV PREL ECON EFIN ETRD EUN PINR EI
SUBJECT: IRISH DEPUTY PRIME MINISTER ASSESSES LISBON TREATY
AND IRELAND'S ECONOMIC SLUMP

REF: A. DUBLIN 416
B. DUBLIN 389

DUBLIN 00000431 001.2 OF 002


Classified By: Ambassador Thomas C. Foley; Reasons 1.4 (B) and (D).

-------
Summary
-------

1. (C) On July 15, 2008 Deputy Prime Minister (Tanaiste) and
Minister for Enterprise, Trade and Employment Mary Coughlan
told the Ambassador that it was "not possible" for the Irish
Government to be ready by mid-October to propose a way
forward to the European Council following the unexpected
defeat of the Lisbon Treaty referendum on June 12. She said
that Ireland needs to maintain a sharp focus on exports and
competitiveness to overcome the current economic slump, and
that the trade unions, employers, and Government would all
need to cooperate and compromise during the ongoing "Social
Partnership" negotiations if the economy is to be righted.
Bright and capable, Coughlan will be a valuable asset as the
Irish Government seeks to come to grips with the Lisbon
Treaty fallout and its current economic problems. End
summary.

-------------
Lisbon Treaty
-------------

2. (C) Noting that she had just come from a Cabinet meeting
on the Lisbon Treaty, Coughlan stated that it was "not
possible" for the Irish Government to be ready by mid-October
to propose a way forward to the European Council following
the defeat of the Lisbon Treaty referendum by the Irish
electorate on June 12 (Ref B). She cited the need for
extensive public consultation, which will be delayed by the
traditional Irish shut-down during the summer holidays. She
also said that a Department of Foreign Affairs-funded
research project into the reasons for the defeat ) a key
element in determining how to proceed ) would not be ready
until late September. Fundamentally, she said, the Irish
people had made their wishes known and the Government would
have to respect their decision. She called the way forward
"uncharted waters."

3. (C) Coughlan referred to French President (and President
of the European Council) Nicolas Sarkozy,s remarks on July
15 that the Irish would have to vote again on the Lisbon
Treaty as an inappropriate attempt to appeal directly to the
Irish people ahead of his scheduled July 21 visit to Dublin.

---------------------------------------
Enterprise and the "Social Partnership"
---------------------------------------

4. (C) Turning to the economy, Coughlan said that the
economic downturn in Ireland (Ref A) had little to do with
the rejection of the Treaty and everything to do with the
U.S. and global economies, the price of oil, the shortage of
credit, and the sub-prime problem. She noted that Ireland
had been particularly hard hit by a sharp decline in the
construction industry. Stating that Ireland needed to
maintain a sharp focus on exports and competitiveness to
weather the storm, she said she fully supported Finance
Minister Brian Lenihan,s decision to hold the line on
current expenditures, including a reduction of the public
service by three percent.

5. (C) As the Minister responsible for negotiating the
"Social Partnership" (the triennial agreement between the
government, employers, and the trade unions on matters such
as wage rates, benefits, and taxes, which has underpinned
economic stability and growth since 1987) (Ref A), Coughlan
said that everyone must cooperate and compromise to become
part of the solution to the economic slump. She indicated
she was particularly worried that the trade unions might
adopt aggressive tactics, which could deter prospective
foreign investors. The ongoing negotiations were
particularly difficult she said.

----------------
Northern Ireland
----------------

6. (C) Coughlan praised the U.S.-supported investment
conference in Northern Ireland in May 2008, saying that she
fully supported cross-border economic and other initiatives
and believed that the development of an "all-island" economy
is extremely important. (Note: Coughlan comes from County
Donegal, the northeastern-most corner of Ireland, which has
much to gain from cross-border economic cooperation with

DUBLIN 00000431 002.2 OF 002


Northern Ireland. End note.)

-------
Comment
-------

7. (C) Coughlan is an intelligent, young, and energetic
Irish leader. She clearly understands the issues and appears
able to hold her own in the rough-and-tumble world of labor,
business enterprise, and trade. Coughlan will be a valuable
asset as the Irish Government seeks to come to grips with the
Lisbon Treaty fallout and the current economic slump.
FOLEY

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