EUROPEAN UNION LEADERS have agreed in principle that limited change to existing treaties may be necessary, after Germany’s chancellor Angela Merkel called for a permanent system for dealing with indebted eurozone countries.

The agreement has raised questions about whether – just 11 months after Lisbon II was passed – Ireland will face the prospect of another referendum.

While acknowledging that permanent mechanism for dealing with a Greek-style crisis is necessary, Taoiseach Brian Cowen stressed that any changes should be “limited”. If treaty revisions were modest, he said, a referendum may not be required. However Cowen accepted that the prospect could not be ruled out entirely, The Irish Times reports.

Merkel’s demands include a revision of the treaty with a view to rescuing nations in financial distress while, controversially, imposing a withdrawal of voting rights for member states in breach of the EU’s budget rules.

Speaking at a two-day EU summit, Merkel said:

We in Germany believe that to do this we need a modification of the treaties on how to respond in the future to crises that endanger the euro.

However, Cowen has said that the possibility of suspending the voting rights of a country which breached deficit and debt rules was a “non-runner”, RTÉ reports.

The President of the European Council Herman Van Rompuy will now begin discussions with EU governments about the exact wording of the mandate.

He warned that “the absence of a crisis resolution mechanism almost brought down the euro zone as a whole” last year.

During his discussions with the Irish government, Van Rompuy is likely to examine the kinds of changes that the Irish constitution can sustain without a referendum.

Van Rompuy and the commission will present a report of their initial findings to EU leaders at their next summit, shortly before Christmas, and will release a final report next March. Any permanent mechanism for dealing with euro zone debt is marked for introduction in 2013, which is when the temporary measures introduced to deal with the crisis will expire.

Meanwhile, economic and monetary affairs commissioner Olli Rehn has said that the European Commission did not impose a budget figure of €15bn on the Irish government, saying:

Our role is not to assess on the size on the figure but on the package, on the multi-annual plan as a whole, which has not been presented yet – and that will be in November.