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Dáil Éireann debate -
Wednesday, 18 Jan 2012

Vol. 752 No. 1

Leaders’ Questions

On behalf of my party I also welcome the Speaker of the Knesset and our guests from Israel, and I commend the Ceann Comhairle and the Speaker for initiating an important dialogue between our two Parliaments.

It was reported this morning on RTE that the Taoiseach, on behalf of the Government, is expected to convey to the European Union leaders at the end of this month, that is, within 12 days, whether Ireland will need to hold a referendum to ratify the new intergovernmental treaty which is intended to lead to fiscal stability in the Union. It is ironic that it was from RTE that we learned this. I ask the Taoiseach to give the Dáil and the people the courtesy of a briefing on the content of the treaty and its implications, and to confirm whether a referendum is required. All of the leaks we have had to date on this have proven accurate. Last week I held up a copy of the EU draft treaty, which the Taoiseach dismissed. We are now into the fifth draft.

We asked at some stage before Christmas whether an EU committee could be set up specifically to deal with the treaty so we could have updates and inputs from Members of the House on a regular basis. It is extremely important that the people of Ireland and Dáil Éireann are informed of the Government's position. The Government should not feed into anti-EU cynicism, which is growing in this country, and anti-EU sentiment. So far the only European policy the Government has revealed is a desperate attempt to do anything to avoid a referendum. We know what it is against but not what it is for.

There were a couple of attempts at referendums by the previous Government.

People are saying the treaty will be signed in March. The Taoiseach yesterday admitted in the House that the interdepartmental committee on EU affairs has not met even once in the last 12 months and has had no impact on this treaty.

Twice for Nice and twice for Lisbon.

The treaty should not be a simple case of "we are in or we are out". I ask the Taoiseach the conditionality that is being attached to this treaty in terms of our participation in the permanent European stability mechanism and our capacity to draw funds from the bailout programme.

The Taoiseach's silence to date has been deafening. Can he outline to the House the exact position of the Irish Government on the proposed treaty? Will it affect the existing bailout programme? Can he indicate whether it will be possible to enshrine the new EU treaty in national legislation, or is a referendum required?

I join with the Ceann Comhairle in welcoming the Speaker of the Knesset to our Parliament. I had the opportunity a number of years ago to visit the Knesset myself, and from conversation with the Ceann Comhairle I know the value of his recent visit there.

I can tell Deputy Martin what we are for. The Government fully supports the potential of the European Union to realise economic growth within the Union and, as a consequence, provide opportunities for continued strengthening of exports, deepening of trade links and jobs and career opportunities for our people here and throughout the EU. I heard the report this morning on RTE. I have admired the work of Tony Connolly for many years; he is a good reporter. This report, however, is not accurate, and I will tell the Deputy why. Tomorrow I expect a final draft of the discussions about the intergovernmental treaty. If that is the final draft from the technical people who are meeting to discuss this, that is the draft that will be presented at the European Council meeting on 30 January. That does not mean the draft concluded tomorrow will be the draft that will be concluded at the European Council meeting, nor does it mean that the discussions on 30 January at a political level will conclude on whatever draft is before them. As Taoiseach, I am not in a position to ask for formal legal advice from the Attorney General until the politicians and the political process at Heads of Government level have dealt with the draft that comes before them.

Tomorrow, I expect a draft text will be concluded at the technical level. That text will go before the political process, that is, the Heads of Government, on 30 January. It is only when that process has been decided that I will be in a position to ask the Attorney General for formal legal advice. I hope that clears up the matter for Deputy Martin and that he now understands the process we must go through before the Government can ask the Attorney General for formal legal advice. The Deputy should also understand that if there is a requirement on this country to have a referendum, that will happen. If it is not necessary to have a referendum, that speaks for itself.

The Taoiseach is talking in riddles. He has been very passive, politically, on this issue from the beginning.

The Deputy has been passive for a long time too.

He has only met one eurozone leader since the Government took office. He has been very dismissive of this House on these issues. This is a familiar refrain from the Taoiseach. Every time the House meets the Taoiseach dismisses all reports and draft treaties. If a draft treat is online, for the fifth time, why in the name of God can it not be laid before the House?

Why can a committee of this House not examine it?

This is political game playing.

I have the opportunity, as leader of my party, to raise some very important and fundamental questions so I ask Members to have the decency to stay quiet to allow me to do that.

I will deal with them. The Deputy should continue.

Why has a committee of the House not had an opportunity to have a decent input into the treaty and its implications? Make no mistake, this treaty will have a significant impact on how the country is organised in years to come in terms of the fiscal situation and so forth.

The Deputy should ask a question.

I do not believe the Taoiseach's statement that he does not have any idea of the legal implications of this treaty. I am aware of the process that leads to an amendment of a treaty and so forth. The Attorney General would be acquainted with all of the drafts-----

Can I have a question from the Deputy?

-----and would be giving advice. Please do not try to separate the process up to now from the summit meeting. The Taoiseach's officials and those at COREPER act, and should act, on political instructions from the Taoiseach and the Government. There is no demarcation line whereby they are working in splendid isolation and the Heads of Government meet on 30 January and make a dramatic new impact. The treaties that have been published today will be significantly similar to what will emerge on Thursday. The Taoiseach is treating the House with contempt in terms of the preparations for this treaty.

That contribution is beneath the Deputy, as somebody who served as a Minister for Foreign Affairs. I will repeat what I said. Of course, the drafts of the text have been online, but they are not the final draft. That is being decided by the negotiators from all the member states.

What is the role of the Dáil?

We could have a debate in the House about the evolution of each draft if the Deputy wishes, but that is irrelevant.

It is not irrelevant.

The draft that must be decided on is the draft that is eventually agreed. The personnel from each country who have been involved in intensive negotiations about the wording and the meaning of the wording will finalise the work tomorrow from their perspective-----

What does the Taoiseach mean by their perspective? They are working on his behalf.

Yes, they are.

The Taoiseach, without interruption.

They will conclude their draft tomorrow. That draft will go before the Heads of Government. The relationship between the countries of the European Union and of the eurozone might well bring about changes to the text that is put before them on 30 January. I hope the Deputy understands that. I did not refer to legal implications.

The Taoiseach did.

The Deputy's statement about an indepartmental committee not having dealt with this is spurious. I explained to the Deputy yesterday that the interdepartmental committee, chaired by the Minister of State with responsibility for European affairs, will deal with a range of issues about the European Parliament, the EU Commission, the involvement of the Oireachtas and preparation for the European Parliament-----

This is the most important issue and it is not even on the agenda.

The Economic Management Council, which I chair and which is attended by the Tánaiste and Minister for Foreign Affairs and Trade, the Minister for Finance, the Minister for Public Expenditure and Reform and any other Minister necessary, has regularly discussed the question before us and which is now being debated by officials from the different countries.

It is true that personnel are available from the Office of the Attorney General to give advice as those texts evolve, but I am not in a position, as the Deputy well understands but does not wish to say, to ask the Attorney General for formal legal advice until I have a final draft to present to the Attorney General.

It was confirmed that the Taoiseach had legal advice.

The Taoiseach has legal advice.

I do not. That final draft will not be available until the political process at Heads of Government level decides how it should be presented on or after 30 January. I hope I have made that clear. At that point-----

What is the role of Parliament?

-----the Attorney General is asked for formal legal advice on the text as concluded.

It is a fait accompli.

The text today and tomorrow is not concluded. It is when the political process deals with it on or after 30 January that I will be in a position to ask for formal legal advice. I hope the Deputy understands that.

I join in giving a céad míle fáilte to the Speaker of the Knesset, a man with Belfast roots. The big interest of the people on this island is in securing a working peace accord in the Middle East which upholds the rights of the people of Israel and the rights of the people of Palestine. Hopefully, this visit will assist that process.

Deputy Martin says the Taoiseach is very passive on this issue. I disagree. The Taoiseach is very active on the issue. He supports this treaty and has made that clear. It is an austerity treaty and will institutionalise current Government policy. Yesterday, the Taoiseach waxed lyrical about the need to involve the Oireachtas and the public in European affairs. Invariably, however, and I agree with Deputy Martin in this regard, no respect is shown to the Oireachtas. We pick up tittle tattle, leaks, spin and media speculation. The Taoiseach has said it is his objective to be the Taoiseach who retrieves Ireland's economic sovereignty. This treaty is totally at odds with that objective. The Government must respect the Dáil and the people. I ask the Taoiseach to commit to ensuring that the Minister for Finance reports to the House on his discussions today in Germany and to holding a debate on this issue before he signs off on the final draft of the treaty.

On the referendum issue, this is not about giving legal advice. There is a matter of democratic principle here. Regardless of whether this is a constitutional or legal change, it is about enshrining austerity and the Taoiseach, as a democrat, must give the people their say.

Deputy Adams deliberately confuses the issue.

You are not so bad at that yourself.

Since this Government took office, it has been its policy to have discussions in the House before and after any meetings of the European Council. In fact, I intend to have the pre-Council meeting discussion in the House next Tuesday because I must attend an economic forum on Wednesday and Thursday. The Deputy will have an opportunity to have his say on Tuesday before the Council meeting. He will also have the text that will be concluded, in so far as the officials are concerned. It should be available tomorrow.

Obviously the Deputy has a very different view on Europe from that of the Government and most parties in the House. He has opposed everything about Europe, except when it suits. In this case, when the text is eventually decided on by the political process, I will, as Head of Government, ask for formal legal advice from the Attorney General. If that advice indicates that a referendum is necessary, a referendum will be held. If the advice is that a referendum is not necessary, a referendum will not be needed.

On the contrary, I am very pro-European Union. Republicanism is a European concept in its first formation.


Deputy Adams has had a late conversion.

I am, however, against the type of European Union which has the Taoiseach handing over authority to super-states or would have German and French presidents and leaders running our affairs. I am also against austerity.

Sinn Féin has put forward progressive policies and is asking the Taoiseach to reconsider his support for the proposed treaty. What is very clear - no one should miss this point - is that the Taoiseach was not cajoled, fooled, tricked or beaten into accepting the treaty. He favours it as much as any German or French leader favours it. Why does he not reconsider his support for the treaty and argue instead for investment in jobs and growth? Why does he not ask for a debt restructuring agreement? This issue is essentially about economic sovereignty which the Taoiseach is giving away. I have no doubt he will come to the House seeking support for a treaty which will do the very opposite of achieving the objective he has outlined and instead of retrieving Ireland's economic sovereignty, he will give it away. Why does he not argue for investment in jobs and growth and a debt restructuring agreement?

I already made the point that it would be much more preferable if all 27 countries of the European Union were involved in the process of having a demonstration of fiscal discipline and that when countries sign up to programmes they adhere to them in order that every economy can make its way towards prosperity and expansion and, as a consequence, jobs. I have listened to the Deputy's party's proposals on many occasions. What Sinn Féin essentially wants to do is raid the National Pensions Reserve Fund and add on to that-----

The Government has already done that.

It gave it to the banks.

-----what is available from the European Investment Bank.

I heard the Sinn Féin spokesman on finance say it was the Government which put forward the proposition in respect of the European Stability Mechanism. Deputy Adams is aware of the efforts we have made to have sufficient firewalls built up to prevent contagion, return to relying on the communautaire method which was always used and ensure the founding principles of the European Union, namely, solidarity, trust and co-operation, are inherent in what we do.

Will the Taoiseach answer my question?

I have made the point that in respect of arguing for jobs and growth, I agreed with the British Prime Minister in our discussions the other day that, because of our shared view of the importance and potential of the Single Market - a view that is also shared by many other countries - the two countries would make a series of propositions to the Commission and all our colleagues in the European Union-----

It should be put in the treaty.

-----that the process whereby decisions are made and legislation is drawn up from a European perspective have at its core the possibility of creating growths and jobs. Far from the Deputy's view that I never argue for these things, my Government is bringing the issue right to the centre of every action that will be taken as part of the European Union.

That is not the case. The Taoiseach would be better staying at home.

I too welcome the Speaker of the Knesset although I believe he has departed the Chamber.

Is the Taoiseach aware of disturbing figures which are emerging about the growth rate for the economy for 2012? Davy Stockbrokers has downgraded its figure on projected growth for 2012 from 1.7% to 0.4%, while Goodbodys has produced a figure of 0.7%, down from 1.2%. Prior to the budget the ESRI downgraded its figure to 0.9%. While this is disturbing, the most disturbing figure is the 1.3% forecast produced by the Department of Finance which is way out of line with the projections provided by all the independent commentators. It is even more disturbing because the budget was based on the Department's figures.

There is a long and slightly unwelcome tradition of the Department puffing the prospects for the economy. One must ask whether these guys are number-crunching on crack at the moment. What are they doing producing and sticking to figures with which no independent commentators agree and on which the budget is now based? As the Taoiseach knows, lower growth, as anticipated by independent commentators, means lower taxation revenue and a wider deficit. Given that the Government has declared the objective of chasing the deficit a primary target, if we have a wider deficit, as is forecast, we will miss the targets on which we gave a commitment to the troika. Does the Taoiseach stand by the 1.3% growth projection, which is way out of line with the figures provided by everyone else? If the Department of Finance is forced to revise its figure, does he anticipate introducing new, sudden and unexpected austerity measures in pursuit of his declared goal of reducing the deficit?

Deputy Ross is well aware of all of the factors that influence growth rates. The growth rate set out by the Department of Finance on behalf of the Government is an average, medium-term rate which we expect to be able to meet. When the troika came here at the start of its ten day visit it outlined very clearly that the period ahead would be the most challenging in respect of three areas, namely, meeting the budgetary targets that were set out, dealing with State assets and dealing with continued movement in respect of banks.

Yields, which stood at 14% last year, have fallen below 8%. This is an indication of volatility and, in our case, some degree of rising confidence, although we obviously have a long way to go. There is probably not an economist in Europe - and Deputy Ross is a respected economist - who can give a definitive verdict on the growth rate for any country because of global volatility and the fact that changes can occur instantly. We believe the targets we have set out will be achieved in 2012 and the Minister for Finance has been consistent on that issue. It is my belief that if the political process at European level is able to deal with the eurozone crisis, both in terms of the scale of the firewall to prevent contagion and in finding an approach to fiscal responsibility and conditions that apply to countries which are able to meet their demands, we have 1,000 engines in this country to help us achieve the growth rates that have been set out. The figures are medium term and we believe they can and will be achieved. We live and operate in a period of great volatility and uncertainty in Europe and the world. It is very difficult, given all of the factors involved, to give a precise definition of what growth rate will be achieved at the end of 2012. I am sure Deputy Ross understands that clearly.

I would be grateful if the Taoiseach would answer the question as to whether he stands by the 1.3% figure. If he does not, it would have serious implications for the budgetary arithmetic and the prospects for the introduction of a mini-budget, sudden taxation measures and future budgets. Will the Taoiseach anticipate or respond to one of the independent commentators, namely, Goodbodys, which states we will no longer be able to meet our deficit target of 3% of GDP in 2015, not through the fault of the Government but as a result of the recession in Europe?

What contingency plan do we have to deal with a situation such as that? Is it to impose further austerity, to look for a deal on the debt or simply to live in hope that something will go right and the recession will end?

I stand by the growth figures and I do not agree with Goodbody's assertion. We have already made it plain at the technical discussions on the fiscal circumstances in which we find ourselves, having borrowed more than €60 billion at excessive interest rates before the facilities of the EFSF and ESM came on stream, that it would be very beneficial for Ireland in dealing with our deficit and, as a consequence, our debt repayments were we to have the capacity to move from where we are now to having those facilities available in regard to the moneys borrowed for recapitalisation of the banks which, as the Deputy knows, had an impact on European banks as well. That is a matter which is being discussed intensively at a technical level. It would be beneficial for Ireland as a separate matter entirely from the inter-governmental agreement discussions were that to happen.

We stand by the figure we have set out. I do not agree with Goodbody's assertion. The discussions taking place in regard to the fiscal circumstances of the country are continuing with some intensity.