Mr Kenny told the House that the Attorney General's advice at this morning's Cabinet meeting was that "on balance" a referendum was required to ratify it. Scheduled Dáil business was interrupted for the statement.

The Taoiseach said that he intended to sign the treaty at the weekend with all the heads of the EU in Brussels.

In the coming weeks, he said the Government would finalise the arrangements and the process leading to the referendum, leading to the establishment of a referendum commission. No date was given for the poll.

Eoin Treacy's view It is looking increasingly likely that no other country will give its citizens the opportunity to vote on the Eurozone's fiscal compact. Here is link to the full text of the treaty. The agreement will pass into law when 12 member states have ratified it. Therefore unlike the Nice and Lisbon treaties an Irish ‘No' will not veto the chances of the treaty passing into European law.

Irish public mood is tilted towards dispensing with the €31 billion liability the government took on when it bailed out the banking system. I suspect this is seen as the price for a ‘Yes' by many voters. In absence of such a concession, the balance of probabilities points towards an Irish ‘No'.

In the event of a ‘No', the government would still need to give a commitment that it will meet the terms of its bailout agreement. The risk of higher borrowing costs would be non-trivial. Legitimate questions would then be asked as to how sustainable Ireland's debt situation would be. Membership of the Euro would be an additional consideration since Ireland would no longer be party to all of the treaties that govern membership of the single currency.

The old Irish punt proxy is currently trading at $1.70 to the Dollar and the ERM pegged it at close to its strongest level ever against the Deutsche Mark. The Punt traded at close to parity against the Dollar during economic crises in the 1980s and ‘90s. (Also see Comment of the Day on December 19th 2011).

There appear to be three options to get out of a crisis such as that facing the Eurozone. Default, devalue or reform. New Zealand went the reform and devaluation route during the 1980s. Brazil chose the default and devaluation route until President Lula was elected. Reform on its own, without debt forgiveness or currency devaluation is a tall order. I don't know of an example where it has succeeded in the past. The ECB's move to provide the Eurozone's banking system with liquidity does not target the solvency issue for various countries faced with housing busts, record unemployment, struggling banks and slow or no growth. How Ireland votes is unlikely to be a simply local issue.