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Dáil Éireann debate -
Tuesday, 24 Jan 2012

Vol. 752 No. 3

European Council: Statements

I am pleased to have the opportunity to brief the House ahead of the forthcoming informal meeting of the European Council in Brussels on Monday next, 30 January. This informal meeting will take place over a working session on Monday afternoon. There will be two issues before us, both of great significance for the European Union. First, we will address any outstanding questions on the draft intergovernmental treaty and, second, we will examine what needs to be done to ensure a return to growth and job creation. Both issues are important for Ireland and concrete progress on each is essential. I will be working to ensure an outcome which is well balanced.

Clearly, a common currency needs common and enforceable rules and a shared commitment to discipline. That is what the new treaty is about. It is also clear that putting in place measures that will help us to avoid future crises, although they may improve market sentiment, will not on its own get us beyond the current crisis. For that, we need growth and, to be more specific, job-creating growth.

The Government has been very active in advancing Irish positions ahead of the meeting. I spoke this morning to the Austrian Chancellor and will make a number of calls to colleagues, including the Dutch and Italian Prime Ministers, this week. In addition, I will meet the Danish and Finnish Prime Ministers at the World Economic Forum in Davos. The Tánaiste has also been engaged with his colleagues ahead of the meeting and met a number of them, including his Portuguese, Luxembourg, Dutch, Austrian and Finnish counterparts, at this week's meeting of the Foreign Affairs Council. The Minister for Finance, Deputy Michael Noonan, has been in intensive consultations with his counterparts, including a recent visit to see a German Minister, Mr. Schauble, in Berlin and a call on the President of the ECB, Mr. Draghi, in Frankfurt today.

In addition, to help drive the growth agenda, the Government has taken a proactive step and co-authored two key inputs to next week's summit. Our contributions focus on areas which should see a concentration of effort, with one on the digital Single Market and one on broader Single Market questions, including advancing the trade agenda. We have done so in co-operation with a number of like-minded member states, including Sweden, Finland, the Netherlands, the United Kingdom and Estonia. I will say more about these in due course.

Before I do so, I will update the House on progress in the negotiations on the draft intergovernmental treaty. As I said after the December European Council meeting, it was clear to European leaders at the time that, in spite of the extensive range of measures already taken to restore stability and strengthen co-ordination, more needed to be done. To get ahead of the economic and financial crisis once and for all and in a convincing manner, we had to act decisively. We decided to firm up the stabilisation tools we had put in place to underpin the currency - the firewalls - and strengthen budgetary discipline by entering into more binding commitments to each other. These new commitments are to be enshrined in the new treaty under consideration. It is in Ireland's vital national interest that each and every member state of the euro area implements completely and without delay the full range of commitments it has entered into.

It is this element - honouring and implementing the rules - that has not always been achieved in the past. At this stage we are well beyond the point when we can afford to turn a blind eye. We have seen in recent times how vulnerable we all are to a loss of confidence in the ability of one member state or another to sustain its economy. We should be clear that all the hard work we have done to make our way back to a secure position could be undone, through no fault of our own, by the reckless behaviour of others.

Ireland needs to see the new treaty adopted and enforced. It is absolutely in the national interest to do so. I reject arguments that fail to recognise that this approach will best serve our interests and bolster our recovery. Discipline and co-ordination will be our touchstones. The new treaty will take implementation of all that has been agreed previously to a new level. In the past we relied, perhaps too heavily, on peer pressure and are now giving real muscle to the process. All member states - big, small, north or south - will have to abide by the rules and the EU institutions will have a key role to play. Adoption of the treaty will help to generate confidence, the necessary precursor to investment, growth and jobs in Ireland and across the euro area and the wider European Union. That is no small prize, but it is one that the Government is firmly fixed upon. It is critical to the national interest.

As the House will be aware, the negotiations are being advanced rapidly. An initial draft of the text was circulated just a week after the December European Council and the following week - Christmas week, when the House was in recess - negotiations started in earnest in Brussels. Further intensive rounds have taken place and as the negotiations have progressed, revised versions of the draft treaty have been prepared, each of which has sought to capture agreements and understandings reached during the preceding negotiations and, naturally, bridge differences between member states. This has been a thorough and methodical process which nonetheless has been undertaken at considerable speed, given the pressing need for the treaty to be put in place without delay in order to instil the maximum degree of confidence at the earliest possible moment.

The latest iteration of the draft treaty was shared with member states last Thursday night. Reflecting our desire to engage with Members of the House, the Tánaiste shared the draft and his analysis of the state of play with the members of the Joint Committee on European Union Affairs last Friday morning. That same draft was the subject of further discussions in Brussels yesterday and today, this time among EU Finance Ministers.

On Friday morning Ministers attending the General Affairs Council meeting in Brussels will have a breakfast meeting with European Council President Van Rompuy when he will brief them. Just this morning it was decided that there would be another round of negotiations at senior official level on Friday afternoon next in Brussels before the final draft is presented to us at the level of Heads of State and Government. The text will then be taken up at next Monday's informal meeting of the European Council. We are now approaching the end game. I am hopeful that when EU leaders gather in Brussels, we will be able to bring the work to a successful conclusion.

During the course of the negotiations the Government, assisted by our team of senior officials drawn from each of the relevant Departments and Offices, has been fully engaged with our EU partners, both in Brussels and across EU capitals, in order to ensure our national concerns are fully appreciated and understood by other member states. At each iteration Irish interests have been advanced. At the same time, we have been active in cultivating alliances with other partners on matters of common concern. This approach has been productive. We have particularly pressed our partners on the need for Ireland's programme country status to be properly taken into account; the need for an appropriate basis to incorporate a debt brake at national level; the need for a workable application of the structural balances methodology; and the need to ensure as much of the content of the new treaty as possible is put on a clear EU legal footing. That is important. In each of these instances I am satisfied that the draft text has been moving in the right direction.

Of course, the negotiations are as yet not concluded and, therefore, the draft text remains open to further revision. A number of issues remain outstanding, some of which may require final decisions to be taken by leaders when we meet next week. These include arrangements for the treaty to enter into force and for participation at euro summit meetings by non-eurozone member states. These are important considerations. However, as we reflect on the detail, we should not lose sight of the reason we are pursuing this course at this time. We are not negotiating a new treaty for its own sake. We are doing it with a view to making a serious and credible contribution to stabilising the common currency as a means to support a return to sustainable growth, accompanied by job creation. The Government is using all it energy to secure this outcome at next week's meeting.

As I have said many times previously, Ireland has nothing to fear and a great deal to gain from this process. That is why we continue to work to ensure our best interests will be reflected in the outcome. We do not want to see the important progress we have made through our hard work and determination set back in any way. We are working our programme and meeting our commitments, of which we want to make a success, difficult though that is. Anything that makes a positive outcome more likely is to be welcomed, as the new treaty should be.

I appreciate the great interest the House takes in what will be required in order for the country to ratify the new arrangements. At the risk of repeating myself again, I can only say the Attorney General will be asked for a formal view once a final text is available. Until then it is not possible to be definitive and it is not helpful to speculate. The test will be whether the proposed treaty is compatible with the Constitution, Bunreacht na hÉireann. The Attorney General will study the legal implications carefully and advise accordingly. As I have stated in the House and elsewhere many times, if a referendum is required, one will be held. Whatever path towards ratification is required, the Oireachtas will be fully and appropriately involved in the process. That is without question.

As I said, discipline on its own will never be enough. I will work for an outcome that recognises the urgent need to prioritise steps we can take to encourage and sustain growth. We can be absolutely sure about one thing: without growth, Europe will not recover and we will not generate jobs. Growth is the key. It is necessary, therefore, to restore fiscal balances and market confidence in debt sustainability. It is the key to supporting job creation and addressing the unemployment crisis, particularly that facing our young people. Growth will not generate itself. We must create the right conditions and environment to nurture growth across the European Union. That is what is of real importance to the people.

I wish to see real results arising from next week's meeting. It is an objective I share particularly with colleagues in the Netherlands, the United Kingdom, Sweden, Finland and Estonia, which is reflected in joint contributions with these countries to next Monday's meeting. We have co-sponsored two papers which address a number of important issues which serve to advance our national interests. These include: priority actions to complete the Single Market, including, in particular, the significant potential in the digital Single Market; further reduction of regulatory burdens on the small and medium enterprise, SME, sector; better targeting of labour market supports, including a new focus on youth unemployment - this matter was discussed at the British-Irish Council in the past two weeks; a stronger emphasis on the external dimension of the Single Market and the growth potential of third country trade; a more growth-friendly EU budget; and a growth test for future EU proposals.

Europe has a real opportunity to progress an ambitious package of measures, reflecting the seriousness of the situation. The Commission's annual growth survey 2012 was published in November, marking the starting point of the second European semester of economic governance. The key message is that, faced with a deteriorating economic and social situation, more efforts are needed to put Europe back on track and sustain growth and jobs. Ireland supports the five priorities suggested by the Commission: pursuing differentiated, growth-friendly fiscal consolidation; restoring normal lending to the economy; promoting growth and competitiveness for today and tomorrow; tackling unemployment and the social consequences of the crisis; and modernising public administration. These are consistent with the Europe 2020 strategy for growth that is smart, sustainable, and inclusive. They align well with the national priorities established by the programme for Government.

It is clear that we must deliver better educational outcomes, that we must keep our focus on knowledge-intensive development and that we must improve participation and employment rates with sensible and job-friendly labour market policies. A key challenge in the current environment is to create a climate of confidence for new investment and to steer this investment in a direction that is sustainable. Again, we see strong complementarities in this regard between the Europe 2020 strategy and the programme for Government. Countries that, like Ireland, are participating in an EU-IMF programme are not required to prepare a full national reform programme and a stability or convergence programme for submission in April. That is because the extent of the monitoring and reporting already taking place through the regular quarterly reviews is seen as rigorous and largely sufficient. However, we will, nonetheless, be preparing a comprehensive review of national progress under the Europe 2020 strategy for submission and look forward to engaging constructively in the second European semester process. The emphasis of the European semester on strengthening the alignment between budgetary priorities and structural reforms is the right one. It is consistent with the direction we have set for ourselves in this country.

I wish next Monday's informal European Council to be a productive one to demonstrates the European Union's ability to focus on the urgent and important issues and at the same time conclude work on the new treaty and intensify efforts to deliver growth as a means to recovery. I will, of course, report back to the House after the meeting.

Next Monday's meeting of the leaders of Europe is shaping up to be yet another summit at which they will fail to take any decisive step to overcome the economic crisis that is accelerating in Europe. Since they last met, the growth forecasts for most countries have been reduced, the sovereign ratings of many have been downgraded and unemployment has continued to rise. Yet in spite of this, the agenda for Monday involves nothing more than a series of side issues or failed policies. No matter how many times leaders use the word "jobs" in their statements, all they are discussing is fiscal consolidation and a Franco-German obsession with tax harmonisation. It is also yet another summit that Ireland will attend without its Head of Government having made any effort to promote an agenda by undertaking even a basic round of serious bilateral meetings.

Since last March, our party leader Deputy Micheál Martin has taken the lead in the Chamber by setting out the specifics of what is required to address the crisis. He was well ahead of most commentators in pointing to the likely impact of the delays from March to July in implementing a debt sustainability deal that was agreed in principle in December 2010. In spite of the frequent jibes thrown at him by the Taoiseach and the Minister of State, Deputy Creighton, he has been correct in challenging the false dawns that have been announced after every new measure's adoption. His consistent critique has been that the Council has been focused on addressing issues that did not cause the crisis and will not solve it. The failure of Europe's leaders to challenge the failed orthodoxies continues to do significant damage. It is true that key bond yields on the secondary market have fallen, but the evidence suggests that this is purely as a result of unsustainable co-ordination between a range of institutions and banks.

Deputy Martin has also set out a constructive agenda of measures that Fianna Fáil supports. Unlike others, we have not taken the path of angry opposition or unthinking support. I will revert to the specific proposals that, even at this late stage, we believe the Taoiseach should formally place on the Council's agenda.

As these are the first statements since the Croatian referendum, I would like to join with others in welcoming the strong "Yes" vote to membership of the EU. Croatia is a country that was born in difficult circumstances and has overcome many hurdles in the past two decades. It has built a strong liberal democracy and has worked hard to overcome ethnic divisions that could have festered for a long time. Ireland has been a strong supporter of Croatian membership and opposed the artificial barriers placed in its way at different times. I also acknowledge the leadership role in the referendum played by foreign Minister Vesna Pusić, who is vice-president of our European party and who we look forward to welcoming to the European Liberal Democrat and Reform Party, ELDR, congress in Dublin later this year. The referendum shows that, even at this time of crisis, the idea of the European Union has a strong attraction for all those who want to build a democratic and peaceful Europe.

I welcome the early statements of the Danish Presidency and its constructive approach. Last week, Prime Minister Thorning-Schmidt placed the issue of youth unemployment at the centre of her address to the European Parliament. It was a positive start to the Presidency and I hope that President Sarkozy will have the decency to apologise for the insulting attitude to Denmark and other small countries that he adopted in his statements at the December summit.

The proposed fiscal treaty will be finalised next Monday, but there is no indication that anything of substance is likely to change. In a move typical of this Government, even though there is a final text available, it will not reveal its understanding of the treaty until the latter has been agreed. The debate on this treaty has been the worst of any Europe-related treaty since we first applied to join the EU 50 years ago. The likelihood of a treaty emerging became clear in August following a Franco-German summit. The only response by the Taoiseach was a doorstep interview some time later when he stated that a referendum should be avoided. From that point on, the basic strategy of the Government has been to focus on whether the people need to be consulted and not on looking for a deal capable of restoring stability and growth.

Last week, the Tánaiste stated that it was disgraceful to suggest that the Government was trying to avoid a referendum. As we know from WikiLeaks, the Tánaiste has a record on this issue.

So has Deputy Ó Cuív in terms of the Nice treaty. Does he remember that one? Did he lay down prostrate in front of his old job?

My position was simple and can be easily explained. As the Taoiseach knows, Cabinet Ministers are subject to collective Cabinet responsibility, but as a voter, one votes personally. I am sure the Taoiseach recognises the subtle difference.

The Jesuitical distinction survives.

I am glad that the ability to read the Constitution and to understand its implications survives.

There is simply no doubt the sole thrust of negotiations since 9 December has been to finalise a treaty that can be ratified by the Oireachtas and will withstand the inevitable Supreme Court case. Ireland was not alone in trying to reduce the radicalism of December's agreement. To deny this is to deny the obvious. In spite of the Taoiseach's comments, the truth is that he has received legal advice at every step on whether a vote might be required. I noticed his clever use of the word "formal" today. He is getting good at word crafting. The Taoiseach must wait for a final text to get a final piece of formal advice, but I am sure he already has informal advice. He knows exactly what is the Attorney General's view of the current text and he should be honest enough to outline it before he signs off on the treaty.

The text that will go to the summit does not represent the implementation of December's deal. The provisions have been carefully drawn to leave out legally binding provision for, in effect, a two-speed Europe. Enhanced co-operation may happen, but there is no legal obligation to agree in advance to be covered by policies with which one disagrees. In addition, for all of the fighting in December about the place of existing EU treaties and institutions, existing treaty law will remain fully in force.

The draft treaty explicitly states that the issue of real change is being kicked down the road with a target of doing something within five years. As currently drafted, it is a minimalist treaty that appears to do little more than put a small amount of extra enforcement behind policies already incorporated in EU regulations. The specific fiscal targets are those that were agreed last year and finalised in a regulation that came into force in November.

What is new is the idea that the European Court of Justice would be able to fine member states through cases that will be easier to initiate. At the heart of this is perhaps the most ridiculous idea in the construction of the Stability and Growth Pact, namely, the way to deal with a government in debt is to fine it an amount that is a fraction of that debt.

No doubt others contributing to this debate will speak forcefully about how the treaty spells the end of the world and is revolutionary. In truth, it is nothing of the sort. As drafted, it is a tokenistic effort that entrenches already agreed policies but fails completely to address the causes of the crisis.

Various parties and individuals have already started a competition for who can get to the High Court fastest when the Government tries to ratify the treaty through the Oireachtas. Just as the Government's main interest is in avoiding a vote, the main interest of these parties lies in having something to campaign against. What people ignore is that since we joined the European Union, there have been at least eight treaties between member states which have not required the holding of a referendum. For example, the 2003 accession treaty included amendments which were agreed for Ireland in response to the referendum in the State on the Nice treaty. Not every change automatically requires the holding of a referendum. The important issue is to see the final text first.

The problem with the treaty is not that it does too much but that it does nothing about the real causes of the crisis. In particular, it completely ignores the policies required to return growth and job creation to Europe. Not a single provision in the treaty would have prevented the current economic crisis. In Ireland's case, we fully met every provision therein, right up to the start of the recession. Others would have had to run slightly tighter budgets, but they would not have been obliged to adopt any policies which would have averted the crisis. It is a great pity the Taoiseach put party politics first by repeatedly linking Ireland's problems with the failure to operate to these fiscal rules. In doing so, he has significantly weakened Ireland's hand.

We support the idea of greater efforts to ensure long-term fiscal stability in Europe. What we do not support is the notion that strengthening fiscal control will solve any problem. Britain, the United States and many other countries with no sovereign borrowing problems have worse fiscal balances than in the eurozone. In the case of the United States, the yields on Treasury bonds are at an historic low. Outside of the governments of a handful of European countries and, tragically, the board of the European Central Bank, nobody believes the crisis will be ended by showing greater resolve on borrowing and debt. In fact, the recent downgrading of France and other countries was explicitly justified on the basis that the agenda agreed in December was the wrong one.

The core cause of the sovereign debt problem in the eurozone is the lack of a lender of last resort for the primary bond markets. Investors are losing confidence that the money will be available when they seek to redeem bonds and, consequently, have been driving up yields. In the past month there has been some respite, but the evidence is that this is because of background manipulation of the market in an effort to restore confidence. In reality, we have the ridiculous situation where the ECB is lending money to banks in the hope they will buy up sovereign bonds. Other central banks are buying them directly, with lower costs and risks and a much greater impact. The failure of the draft treaty to include a single word about any reform of the ECB is the greatest indicator of its irrelevance to solving the crisis.

The policy of the European Union remains the funding of bailouts rather than preventing them from being required. The failed policy which drove Ireland and then Portugal out of the markets in the past year and a half remains untouched. If the leaders of Europe want to address the causes of the crisis, they should at least indicate an intention to explore a series of specific steps. The fist and most significant of these is the need to change the mandate of the ECB. At a minimum, the bank should be given a mandate to target economic growth as well as low inflation. Equally, it must lead a unified financial regulatory approach. Second, before trying to establish a fiscal union, the leaders should agree to establish a significant fund to assist countries in facing major economic shocks. The former President of the Commission, Jacques Delors, showed he understood this when he pushed for Cohesion funding, but it appears to have been forgotten by those who believe growth can come from control without investment.

Third, the leaders should agree to a significant increase in funding for employment creation in the worst affected countries. The reason people here and elsewhere developed a growing respect for the European Union was that it played a major role in tackling unemployment. That should be remembered and addressed in the agreement next week.

Fourth, the leaders must signal that they will no longer tolerate the fracturing of the European Union and the arrogant behaviour of a couple of leaders more concerned with domestic opinion polls than the worst economic crisis since the 1940s. They have been helped by the timidity of the Taoiseach and others who have failed to build alliances or forward an alternative agenda. If President Sarkozy and Chancellor Merkel turn up on Monday with a prepackaged agreement and demand that everyone shut up and sign, they should be told "No". All 27 member states have rights which must be respected.

I propose to share time with Deputy Pádraig Mac Lochlainn.

Go raibh maith agat a Chathaoirligh, agus tá mé buíoch don Taoiseach fosta. I listened to the Taoiseach's comments and carefully examined the script distributed. I do not know who writes this stuff, but some of it is incredible. For example, we are told that we are now "giving real muscle to the process" of budgetary oversight within the European Union. The Taoiseach said all member states, "big, small, north or south," would have to abide by the rules. He spoke about needing to instil the "maximum degree of confidence at the earliest possible moment," but he does not say who will have confidence instilled in them. The speech included one gem, in particular, the reference to the need to "ensure as much of the content of the new treaty as possible is put on a clear EU legal footing."

The Taoiseach paid the usual service to the issue of growth, but he did not refer to the growth in poverty and inequality and the other social problems that are getting worse by the day. He also states, "It is clear that we need to deliver better educational outcomes...." One might conclude from this that there will be no closure of DEIS schools, no increase in student charges and no closure of educational institutions. The Taoiseach is getting good value from the advisers to whom he is paying huge cheques if it was one of them who came up with the lovely phrase:

I want next Monday's informal European Council to be a productive one, one which demonstrates the European Union's ability to focus on the urgent and the important at the same time....

I joked the other day that sometimes the discussions in this House were like an episode of "Father Ted". The Taoiseach and the Tánaiste remind me of Fr. Ted and Dougal; I am only waiting for Mrs. Doyle to come in at any moment and tell us, "Go on, go on, go on." If it were not so serious, we would be in the territory of Myles na gCopaleen, Spike Milligan or whatever one is having oneself.

The difficulty is that the Government is simply afraid of the people. It has made clear that it is totally in favour of the proposed treaty, yet the Taoiseach says there will not be a referendum unless the Attorney General directs that one is required. It is almost as though the Government, somehow, is not allowed to call a referendum. It as if it does not have the power to do so and that we do not live in a republic. The very least citizens in a real republic expect is that they get to decide on any agreement with such far-reaching consequences. This refusal to face up to holding a referendum, to call one on a democratic principle, is cowardly and unacceptable.

We have seen other Ministers do what the Taoiseach is doing today, namely, attempting to portray the choice facing the people as one of staying in the eurozone or leaving it. The Government knows that is not the case. It should seek advice from the Attorney General in that regard if it is unsure. The reality, of course, is that our position as a member of the eurozone is secure no matter what position the citizens of the State take on the emerging treaty.

The big question is whether the treaty is good for Ireland and Europe. The Taoiseach and the Tánaiste are clearly of the view that it is a good treaty, even though it is not yet completed and another round of negotiations is due to take place. Sinn Féin believes what is proposed is not for Europe and, in particular, Irish citizens. It is bad economics and bad politics. Tá a fhios maith ag an Taoiseach go bhfuil an Stát seo briste brúite agus nach féidir linn an bille le hAnglo a íoc, cé go mbeidh Anglo ag fáil airgid amárach. Méid mhór airgid atá ann, a d'fhéadfaí a chur i dtreo fostaíochta nó chun an córas sláinte nó an córas oideachais a fheabhsú.

The Government should reconsider its support for this deal. The systems are not working for the vast majority. We spoke earlier about the need to marry our economic and social progress, but we are doing the opposite. The Labour Party, in particular, needs to be conscious of the result of all of this. This is not a fiscal compact; it is an austerity treaty, as the Taoiseach knows. This is about right-wing austerity policies being imposed in perpetuity.

Providing in State law for the 0.5% of GDP deficit limit will require the Government to implement austerity budgets - I presume it would be legally bound to do so - not just until 2015 as demanded by the EU-IMF programme but for its full term in office and beyond. There are 450,000 on the live register and the Government is poised to close up to 900 nursing home beds and cut 500,000 home help hours at a time when tens of thousands of our young people are being forced to emigrate. If austerity was the solution, it would have worked by now. The significiant transfer of power to the European Court of Justice will emasculate the Oireachtas in terms of the limited authority it will have.

The issue for the Taoiseach is: in what state will he leave the State when he retires?

Better than I found it.

I hope so. I wish the Taoiseach well in that endeavour, but he will have to have an objective and a vision.

This austerity treaty is for a divided Ireland and European Union. The summit meeting will be of enormous significance. We have met the troika on a number of occasions and put propositions to it, including on the issue of the eurozone. My colleague, Deputy Pádraig Mac Lochlainn, will outline some of the main proposals we would like to have considered. Perhaps the Taoiseach and the Tánaiste might listen as intently as I have read the Government's material on this matter, with which I do not agree. Perhaps they might take on board some of our proposals which may catch the attention of the people who will bring us to a bad place. I include the Taoiseach who agrees fully with the treaty.

Sinn Féin has produced a document which it launched last week in Dublin. It is an analysis of the crisis, to which we provide a number of solutions. This so-called fiscal-austerity compact demonstrates that the leaders of Europe, including the Taoiseach, either do not know the causes of the problem or are in denial in this regard. The Government needs to stand back and look at how we got here. The crisis commenced with the formation of European Monetary Union and the eurozone when trade surpluses materialised in Germany resulting in the euro making the German economy even more competitive and in having a considerable bulk of the wealth at the core, followed by irresponsibility in distributing that wealth. The blindness of the European Central Bank allowed core state banks to lend recklessly without regulation to the periphery, including private banks in Ireland and governments, without due recourse or due diligence in terms of what they were doing. That is how the crisis was created. There is a fundamental problem with European Monetary Union as configured. A one-size-fits-all policy does not work for Europe.

I have no doubt that the Taoiseach and the Tánaiste are aware that the saddling of the people with billions of euro of private sector debt is a gross injustice which undermines the principle of the European Union based on solidarity. In the eyes of every fair international commentator and economist we have been disgracefully and abysmally treated. The Government has a huge moral platform to defend the interests of the people. They know this is wrong, as does the Taoiseach.

Sinn Féin's document lists four main solutions to the main elements of the crisis, namely, investment, the banking system and the sovereign debt issue. On investment, the potential of the European Investment Bank needs to be unleashed for a number of reasons, including that it has a solid track record of prudent investment and returns. This would be a good way of sensibly lending from the wealth of the core states to the periphery. This is a core issue. To do this, we need to deploy resources to the European Investment Bank. It is critical at this time that we send the message that there is a plan for job creation and growth in Europe. The European Investment Bank has been completely under-deployed. For example, we could use the National Pensions Reserve Fund in conjunction with the European Investment Bank to address core deficiencies in the State, not least the need for the roll-out of next generation broadband. I could go on.

The second element is the banking system. There must be a cleansing of the European banking system. There must be rigorous stress testing of the core banks, which we know has been avoided to date. This must happen if we are to restore faith in the peoples of Europe and the markets about which we hear so much. When this happens, deleveraging and recapitalisation will be required on a case by case basis.

The third element is the sovereign debt issue, on which we must take a sensible approach. Proper debt restructuring on a case by case basis will be required, in particular for Ireland. Without this, there will not be growth in the economy.

The Taoiseach and the Tánaiste are west of Ireland men. They know the impact of austerity on rural Ireland and are aware that the trail of emigration has recommenced. They know that Sydney, Perth, Chicago, New York, London and Glasgow are filling up with another generation of Irish people. We cannot sustain this. We cannot continue to pay the private banking debt while crippling the hopes of the people. Yesterday I visited the CoLab facility at Letterkenny Institute of Technology. My spirit was lifted by the fantastic entrepreneurs in the building, people who have ideas around computerised gaming, media technology and medical devices. They are brilliant people whose potential we need to unleash. However, because of the manner in which we are going about addressing the crisis we cannot do this. The Taoiseach knows that we cannot deploy austerity only and hope to return to growth. As such, we need to do something about this issue.

The final element relates to existing EU treaty provisions. Sinn Féin believes that if there is the will, there is the scope to deploy the ECB to purchase Government bonds on the primary markets. It has been doing this on the secondary markets but now needs to do it on the primary markets. The specific article which Sinn Féin believes permits this is Article 282.2 which provides the capacity for this in the context of the collective interests of the peoples of Europe being demonstrated. Could there be a more important time to do this? The Government needs to deploy the ECB to purchase Government bonds on the primary markets, deploy the resources of the European Investment Bank, in conjunction with the resources of member states, including in Ireland of the National Pensions Reserve Fund, and deal with the issue of sovereign debt in a fair, sustainable and credible way.

There is also the issue of the cleansing of the European banking system. These are four concrete solutions and I will submit the document to the Government because sometimes the Taoiseach suggests Sinn Féin is reckless and so on. This is an extremely responsible and sensible document that analyses clearly both the problems and what must be done. The difficulty is that, for whatever reason, the focus is on austerity alone. While that might be the view of Chancellor Angela Merkel, it is wrong. It will not solve the crisis and the markets are not convinced. Consequently, on behalf of my party, I appeal to the Government to consider its solutions which cover all aspects of the crisis and begin to defend Ireland's interests. We are on a hiding to nothing and if we continue in this way, we will be facing a lost decade.

The next slot has five speakers, each of whom has three minutes. I ask them to be conscious of the time available to them.

I wish to share time with Deputies Mattie McGrath, Thomas Pringle, Clare Daly and Richard Boyd Barrett.

I listened carefully to the Taoiseach's statement, one paragraph of which shocked me. He stated, "It is in Ireland's vital national interest that each and every member state of the euro area implements completely and without delay the full range of commitments it has entered into." While I fully understand the relationship between each country and how one can have an extremely negative impact on the other, I am shocked that this is the approach being taken by the Taoiseach. This is because it ignores one fundamental issue, that Ireland will be signing up to implement fully a GDP-to-debt ratio of 60% at a time when its ratio is almost double that figure. Moreover, we will be obliged to reduce it by one twentieth each year and we will be signing up to sanctions if we do not do this.

On the other hand, the Taoiseach referred to the need for growth and stated, "Growth will not generate itself. We must create the right conditions and environment to nurture it across the European Union." While we may think we are broke now, were we to sign up to this compact without securing some commitment in respect of dealing with the debt, our prospects for growing the economy would be absolutely gone. Had Ireland been invaded, had a war taken place here or had Ireland instigated a war, we would have been given time to pay war reparations. The problem is that although we face all the financial problems of a war, we have no rebuilding to go with it. Something like the Marshall Plan implemented after the Second World War is needed, but that is not happening. The Taoiseach's speech is at variance with the draft under discussion because the draft is only about austerity and I cannot discern anything within it that provides any prospects for growth.

I wish I had more time to discuss this issue, but as a final point, I note the Taoiseach stated, "The EU institutions will have a key role to play." What about the Commission, the Parliament, the Council of Ministers and the veto? None of that matters because it all has been sidelined by this intergovernmental arrangement.

I am also pleased to be able to make a brief contribution. Having listened to the Taoiseach's contribution, I am also disappointed because it is the same old mantra and the same old spin that is always being put on it. All of these summits have been built up to be something, but they have never lived up to expectations. This is a disappointing aspect for Ireland because as the growth rates of all European Union countries literally are slipping back by the day, these targets will not be met. Consequently, being in a straitjacket of fiscal rectitude is not working. Anyone with any understanding of running a business will attest to the fact that concentrating exclusively on cuts without providing a stimulus or for reinvestment does not work.

Last week the Tánaiste asked Members to put on the green jersey. However, my response is to ask him where is his green jersey. What has happened to his green jersey since he moved to the Government side of the House? He has lost his voice, his courage and certainly his stamina for a fight. He was all action and was going to burn the bondholders. It was going to be his way or Frankfurt's way, but what happened? We have been getting a severe dose of Frankfurt's way and nothing else since. He has lost his stamina completely. Where are his Labour Party colleagues? I do not see any of them present in the Chamber and have seen few of them during debates other than this one. I ask the Tánaiste to wear the green jersey and bring one for both the Taoiseach and the Minister for Finance, Deputy Michael Noonan. He should tell them to put them on and stand up for Ireland because we have rights as a constituent member of the European Union. Ireland has passed all the treaties in the past, although it was necessary to go back a second time to pass some of them. However, it will be hard to have a treaty passed again by the people because they have had a dose of what they do not like. They have been given a dose of the big minders, with Ireland being given a pat on the back and told it is doing great stuff and that the Government is meeting targets. However, this is all a lie and untrue.

I was pleased to have the opportunity last week to meet the troika with my colleagues from the Technical Group. I compliment Deputy Catherine Murphy on securing such a meeting. We told its representatives some home truths and while I consider them to be genuine people, they have been fooled by both the Government and its predecessor into foolishly believing the Government has a mandate to introduce the cuts that are wiping out schools, education, hospital and services of all kinds, as well as dumping people on the dole with no hope and killing off business initiatives. Moreover, the Government is telling the troika, certainly not in my name or those who voted for it, that it has a mandate to do this. The Tánaiste is aware that the Government has a mandate to do no such thing. He is aware that he received a mandate for his voice while in opposition and promises to burn the bondholders, get rid of the last Government and change everything. However, what did people get? The Administration took the same attitude hook, line and sinker, which is an absolute disgrace. Moreover, it is an even bigger disgrace for the Tánaiste to tell people in Europe that he has a mandate to do this. In common with the Taoiseach, the Minister for Finance and all other Members on the other side of the House, he should be ashamed of himself. This is a complete con job and a trick of the loop. While the Minister for Communications, Energy and Natural Resources, Deputy Pat Rabbitte, may have called Members of the Technical Group a pick and mix and so on, it is the Government Members who are the pick and mix. They will be a disgrace and traitors to the country.

The forthcoming European Council meeting next week has again been mooted as another crunch moment for Ireland. Members have heard calls from the Tánaiste to don the green jersey and support what the Government is trying to do in Europe. In the Taoiseach's mind, this means supporting its stance and ensuring at all costs that there will be no need to hold a referendum in Ireland. This is so that we can again show to our European masters that we are the good boys and girls in the class. It is to show we are willing once again to prostrate ourselves to bail out Europe and force the Irish people into a permanent austerity programme. Proposals for a permanently balanced budget probably will ensure Ireland will never emerge from its current bailout programme.

Already Ireland is being warned of the dire consequences if we dare to exercise our democratic right to ask the people to endorse whatever deal is made. While speaking in Trinity College last night, the former German Foreign Minister warned of extreme consequences were we to reject the compact. When does the exercising of a democratic process invite extreme consequences? It seems only when a nation wishes to follow its constitutional processes and it does not fit with the agenda of "Merkozy" and the European masters. When will the Taoiseach stand up for the people and tell them where to get off? It is time for him to don the green jersey and tell them his first responsibility is to the people and that he will do what is good for them, that democracy is the basis for Ireland's Constitution and that he will protect the people through his actions.

There is a huge and dangerous democratic deficit in Europe. "Merkozy" has deposed the governments of two sovereign states and imposed technocratic governments in Greece and Italy. Moreover, the proposed fiscal compact will further weaken democracy. The real purpose of the European Union is emerging through the proposals appearing, namely, the domination of Europe by a small core of countries that will force everyone else to follow their will. In the 1950s Jean Monnet, one of the founders of the European Economic Community, stated the first steps on the road to a federal Europe had been taken. That road has now led us to our current position and the sad part is that the Government is happy to proceed with it and give away any sovereignty that remains. Ministers have made much of our loss of economic sovereignty and how their job is to get it back. The fiscal compact will give away Ireland's economic sovereignty forever and make Ireland a province once again. If the Taoiseach wishes to don the green jersey, let him put it on, attend the Council meeting and tell "Merkozy" and the Commission that the Irish Parliament and people have given him a single mandate, that is, to defend the independence of the nation and that whatever deal comes from the Council will be put to the people. The Taoiseach should tell them that only if he receives their endorsement, will he be in a position to sign up to any deal.

It is clear that the key issue before the European Council is that relating to the austerity treaty. In a certain sense, we are operating in something of a vacuum because we have not seen the final draft of the treaty. However, we have a fair and clear idea of what it is going to contain. An article in today's Financial Times indicates that Frau Merkel of Germany has decided that she may like to consider the idea of allowing the EFSF to use its funds in parallel with those of the ESM which the European Union hopes to launch in July, but that, in return, countries must sign up to the rules relating to the cutting of budget deficits and public debt in a far tougher way that has been speculated upon up to now. There are reports that phrases and provisions which would have allowed countries to breach the deficit limits being spoken about in the context of the treaty in periods of economic downturn were being considered. These phrases and provisions are deemed to constitute an escape clause by the ECB which wants cast-iron guarantees and rules to apply in any new scenario.

There is absolutely no doubt that the treaty revolves around institutionalising austerity throughout Europe in perpetuity. What is being done is taking place in the context of a further diminution of democracy and will involve a transfer of powers from national governments and ordinary people to the European Commission and so on. The Government has some audacity to consider such proposals in the absence of a referendum. It is something of an affront for the Taoiseach, the Tánaiste and a number of other Ministers to spuriously state there is nothing new in the treaty, particularly when what is being considered goes beyond anything seen previously. What is at issue is the provision being made providing for permanent oversight of economic policy, as well as certain fiscal arrangements. That is a fundamental departure.

Imposing fines amounting to hundreds of millions of euro on countries which are already struggling to cope with circumstances of the worst kind would be a sick joke. The imposition of such fines will have profound implications. There is a political obligation on the Government to put these issues before the people. However, it is trying to engage in a cover up and do everything possible to prevent the holding of a referendum. If the Tánaiste is so confident that the steps being taken are correct, why will he and his colleagues not debate the relevant issues with us and the people? Such a debate would not revolve around whether we were in or out of the European Union, rather it would focus on the type of Union we wanted to see develop. Like the Italians who are on strike today and the Greeks who are facing vicious austerity, we are more concerned about a European Union that is run in the interests of the people rather than those of the elites and the banks which are being protected.

There is no moral, political or democratic justification for denying the citizens of this country or their counterparts across Europe a say in whether we should sign up to an arrangement, whereby permanent austerity will be imposed on them, society and the economy. The draft of the treaty in circulation makes it clear that such an arrangement is being contemplated. It refers to fiscal austerity rules being binding in force and permanent in character and stipulates that governments must guarantee to impose these rules on their national budgetary processes. What is envisaged is written in black and white for all to see. The democratic right of citizens and their representatives to decide their own economic policies will effectively be abolished with this treaty. Surely, the very least to which the citizens of the country are entitled is the right to decide whether they want to abolish their right to control matters relating to their economic and social future.

Permanent austerity means permanent mass unemployment, emigration and attacks on the most vulnerable in our society, namely, those who are already reeling owing to the impact of three years of austerity measures which have not worked. When will European leaders and the Government learn that the policy of austerity is not working? Every indicator shows that the European economy is shrinking and that austerity is the cause. What is being done appears to be underpinned by a belief that technocrats know better than the people and their elected representatives. It is absolutely clear that all technocrats know about is balancing books. That does not get people back to work, nor does it make economies grow.

All the money we have collected via the austerity measures is being hoarded in the vaults of the European Central Bank. We need it in order to create jobs and foster growth. Why is no one talking about releasing and investing it in our society in order to create jobs, improve services and build infrastructure, thereby encouraging growth in the economy? The people should at least be given a vote in order that they might choose the path we should take.

I appreciate the contributions made by Deputies to this debate, even if I do not agree with all of the points made. The Government is committed to stepping up its engagement with the House on European matters. A healthy debate on such matters is in all our interests. I attended a lengthy and in-depth meeting of the Joint Committee on European Union Affairs last Friday morning when I had a good exchange with colleagues from across the House, including some of the Members present for this debate. I was particularly pleased that some of our MEPs were in attendance in order that they could bring perspectives from Brussels and Strasbourg to bear on the discussion. The dialogue to which I refer is going to continue. The Minister of State with responsibility for European affairs, Deputy Lucinda Creighton, will, as has become customary prior to meetings of the General Affairs Council, address the Joint Committee on European Union Affairs on Thursday. The Taoiseach will return to the House to brief Members again in the aftermath of next week's meeting. Let there be no doubt that the Government is serious about engaging in debate in the House on European matters.

The informal meeting of EU leaders in Brussels on Monday will be an important event and mark a turning point. As a Government, we will be working to ensure an outcome that delivers for Ireland. What is good for the euro area and the European Union as a whole is in Ireland's interests. We want to restore credibility and confidence in the eurozone. That is the job at hand. An agreement at the summit should lend stability to a volatile situation. That would be a good outcome for this country. We will be striving for a balanced outcome that marks significant progress on the two major issues on the table. I hope it will be possible to finalise work on the intergovernmental treaty and thereby further strengthen economic policy co-ordination within the euro area. Let us be clear, however, that the treaty is not an end in itself, it is a key element of a larger package of actions designed to respond to the sovereign debt crisis. We have already accepted, with our European partners, the wide range of measures needed in order to respond to the crisis. In terms of severity and duration, the current crisis is unparalleled since the establishment of the European Union. The response has also been unparalleled, even if not always perfect. Next week we will have the opportunity to take a positive step in addressing the crisis.

The treaty represents one critical piece of the jigsaw. However, I am also extremely keen to see delivery on the growth agenda at European level. Every Irishman and woman has a vested interest in next week's summit making real and concrete progress in that regard. These two elements - strengthened economic policy co-ordination and the pursuit of job creation and growth - are complementary and mutually reinforcing and we will be pursuing them in parallel. As the Taoiseach noted, negotiations on the draft intergovernmental treaty are moving in the right direction. That is welcome, but this remains a fluid process. As no agreement on a draft text has yet been reached, we will remain fully engaged with partners to ensure our issues of particular concern will be resolved in a satisfactory manner. Just this morning another negotiating session on the draft treaty has been convened for Friday. Our team of senior officials will once again fight our corner and promote our interests.

At the same time and in the context of the broader growth agenda, together with five other like-minded partners - Finland, Sweden, the Netherlands, the United Kingdom and Estonia - we have submitted papers to the President of the European Council identifying priority issues to drive forward the growth agenda. Next week's meeting presents us with a good opportunity to place a spotlight on the remaining potential to complete the Single Market, including through the development of the digital Single Market. This is a complex area, embracing everything from intellectual property to consumer rights. However, it offers real potential, particularly for a small member state interested in new business models and trading more extensively with partners.

Concurrently, we want the European Union to support the engine of industry, innovation and job creation, namely, the small and medium enterprise sector. We must work together to reduce the administrative burdens that hold SMEs back and ensure they have sufficient access to funding. We also want to come together to tackle unemployment, particularly youth unemployment, and see if programmes and processes are targeted and focused as they should be.

The Government believes there is an opportunity to prioritise and drive forward those initiatives which best advance Irish interests and fit most closely our national strategies for growth and economic recovery. We want to see full alignment between what we are doing at national and European levels. The Cabinet sub-committee on European affairs is advancing this important work, including through examining how the programme for Government dovetails with priorities at EU level. There are clear overlaps, whether through promoting energy efficiency - achieving green growth is a real target - the digital Single Market or strategies for job creation. Our post-crisis recovery is being supported by a rebalancing of economic activity towards sustainable, export-led growth. This must include Irish companies unlocking the full potential of Europe's dynamic market of 500 million consumers.

The discussion next Monday will not just be about the intergovernmental treaty. It will also be a discussion about job creation and growth. We have to combine these two tracks. The treaty will not bring about recovery. There has to be a strategy for job creation and growth as part of the European agenda.