European Council Meeting: Statements

The Taoiseach

I welcome this opportunity to brief the House on what was an important meeting for Europe and for Ireland. Progress was made on two key issues of vital interest to us: the jobs and growth agenda and the new fiscal compact treaty. The outcome represents an important contribution to moving Europe beyond crisis, helping to restore stability and confidence to our economy and putting the urgent need for job-creating growth at the top of the agenda.

As I told the European Council meeting on Monday, since this Government took office our absolute priority has been to secure Ireland's economic recovery and to ensure employment for our people. The meeting highlighted how vital it is that this work is advanced seamlessly at national and European level. There can be no difference in approach. All our priorities must be aligned, our policy approaches must match and they must be driven forward with equal commitment and energy. Our membership of the European Union and playing a full, active and influential part at its heart is an essential part of the work that must be done if Ireland is to get back to where it seeks to be. I assure the House that I have personally ensured every Minister is alive to this vital task and fully engaged in this work. I have put in place new arrangements at official level in my Department to ensure that there is full coherence throughout the system and that every opportunity for Ireland to advance its case and its interests at European level is seized and used to maximum effect.

The outcome from Monday's meeting is a clear demonstration that our approach is working and that it is delivering results. Yesterday's discussion of growth and jobs was lengthy and important. There was a constructive and serious atmosphere in the room and I believe there is now a real appreciation at the highest level of European politics of the urgent need to focus fully on growth-generating policies not only as a counter-balance to discipline and austerity, but as an essential element of any sustainable programme of recovery. As I told the Dáil last week, Ireland, along with several like-minded member states, submitted two papers in advance of the meeting, one identifying measures with real potential to deliver growth and the other focused on the digital Single Market, especially copyright issues.

These represented an important input to the text eventually agreed. To make our discussions as practical and concrete as possible, President Van Rompuy asked us to focus on three key areas: unemployment, especially among young people; the Single Market; and small and medium-sized enterprises, SMEs. In advance of the meeting, he asked several colleagues to prepare presentations on these issues and I was asked to make a presentation on the role of SMEs in driving economic recovery.

We heard from President Barroso, who gave a detailed presentation on the extensive range of policy initiatives being advanced by the European Commission. He considered several possible growth scenarios for the EU and what we might do to improve our situation. His presentation was sobering to say the least, particularly his presentation on the extent of youth unemployment throughout the European Union which has reached levels as high as 50% in Spain. As President Barroso set out in his statement after the summit, the Commission will now establish action teams to work with member states in which above average rates of youth unemployment apply. This includes Ireland and the intention is to improve job opportunities for young people.

Several Prime Ministers were asked to introduce key topics to inform the debate. As the Danish Prime Minister holds the Presidency, she focused on legislative work on priority initiatives and the need for the new budget for the EU, the multi-annual financial framework, to promote growth and employment. The Austrian Chancellor spoke on stimulating employment, the Estonian Prime Minister addressed the Single Market and the Finnish Prime Minister focused in particular on the digital Single Market.

In the course of my contribution I set the scene on SMEs, focusing on what we have been doing in Ireland in this regard. I pointed to two key concerns, ensuring access to finance and reducing red tape, which must be addressed if SMEs, the engines of economic recovery, are to be able to fulfil their potential. I highlighted some of the key steps we are taking in Ireland, including our forthcoming jobs action plan; the partial guarantee scheme and micro-financing loan fund; and the strategic investment fund. All of these will help to supplement bank lending.

I also stressed that in return for the money we put in to the banks to recapitalise them, we insist that they deliver for the real economy. We will ensure this materialises through our monthly monitoring of lending targets and patterns and the establishment of the Credit Review Office. I described how we are taking a highly targeted approach in our initiatives, including the reduction of VAT on tourism services, the cut in PRSI for employers of low earners and the reform of our bankruptcy laws, aiming specifically at measures most likely to contribute to growth and recovery. I also pointed to our encouragement of new and innovative companies. This takes place through ensuring that small and medium-sized enterprises can access research and development funding and providing a sales and marketing tax credit to companies exporting to new markets in emerging economies, including the BRIC countries, Brazil, Russia, India and China. I suggested that we should seek to learn from others about what does and does not work by exchange of best practice and that we should return to the discussion in June. This is reflected in the final paragraph of the statement agreed on Monday evening.

Reaching agreement on the new treaty at Monday's meeting was another important milestone. However, as a result of the considerable work that was put into negotiating and preparing the text ahead of Monday's meeting the political discussion on this element was a good deal shorter than our discussion of growth. While much, if not most, of the treaty is already provided for in the EU treaties and existing EU law, including the provisions of the Stability and Growth Pact as strengthened by the six legislative measures adopted last year, setting out the measures in a new treaty takes the process to a new level by ensuring that everyone will play by the rules and will be held to account if they do not. As a small member state of the union, this is in Ireland's interests. There have been occasions in the past when it has been easier for large member states in particular to evade their responsibilities. Under the new treaty this will no longer be possible.

Now that we have a final text it might be helpful for me to set out some of its main features to the House. The new treaty entitled the Treaty on Stability, Co-ordination and Governance in the Economic and Monetary Union opens with a long set of preambles. I highlight the 20th preamble, which makes it clear that "none of the provisions of this Treaty is to be interpreted as altering in any way the economic policy conditions under which financial assistance has been granted to a Contracting Party in a stabilisation programme...". This is an important provision which ensures that for Ireland and other programme countries, the terms of our EU IMF programme will prevail and that the new agreement will only apply once we have exited from the programme.

Among the articles of the treaty, I highlight Article 2 which aims to ensure full consistency with EU treaties. The statement that the treaty is to be applied and interpreted "in conformity with the Treaties on which the European Union is founded" is welcome and something Ireland actively sought, as is the assertion that "They shall not encroach on the competences of the Union to act in the area of economic union".

Another feature worth noting is the carefully balanced language on measurement of structural deficits in Article 3.1, one of the priority issues for Ireland that I have identified previously in the House. The final language in this regard reflects Irish concerns that the approach should take into account an overall assessment with the structural balance as a reference and that it should reflect country-specific aspects. This is important to a small, open economy like ours. Similarly, the language of Article 3.2, which sets out what is required to enact the new deficit brake at national level, reflects Irish input.

We need to ensure that member states fully adhere to and respect the new rules in deciding on and implementing their budgets. Equally, however, it is important that the text recognises that law making processes and traditions - including at a constitutional level - vary from country to country and must be accommodated when we agree to act together. This has always been the case in the conduct of European business. The final text is a balanced one that Ireland can accept.

Article 13 provides an important new role for national parliaments, who will, together with the European Parliament, organise and promote a conference of representatives of their relevant committees to discuss budgetary policies and other issues covered by the treaty. I know this will be welcomed by the House. The arrangements for entry into force are set out in Article 14. This provides that the treaty will enter into force on 1 January 2013, providing that 12 euro area member states have ratified it. Member states will then have a further year to transpose its contents into their national law.

I appreciate the great interest that there is in what will be required to enable Ireland to ratify the new treaty. At our meeting yesterday, the Government agreed that the Tánaiste, as Minister for Foreign Affairs, should write to the Attorney General seeking her formal views in the matter. This is the norm when we are looking at an international treaty. There is no formal deadline. The Attorney General must be given the time she needs to undertake this detailed and important work. As I have said before, the Government will not shirk its duties. It will take whatever steps are necessary to ensure that Ireland is in a position to ratify the treaty, including a referendum if necessary. I will keep the House fully briefed and involved in this important work.

I reiterate my welcome for this new treaty. Its shared currency rules, and the ability to enforce them, are of vital importance. The arrangements make it possible to hold all member states, including the largest, to account in a way that has not previously been possible. I would equally acknowledge that it cannot be seen in any way as a sufficient response to the crisis currently facing Europe, nor was it intended to. In order to get beyond our current difficulties, we also need an urgent focus on growth-enhancing policies. Monday's statement on this and the recognition that growth issues must feature on all future agendas for meetings of the European Council is an important and significant step forward.

It is also clear that the situation in Greece remains fragile. At our meeting, we heard from Prime Minister Papademos on progress in the negotiations on private sector involvement, PSI, and on a new programme. The troika's assessment is that Greece is making real efforts, but that more remains to be done.

For as long as member states remain exposed to extreme pressure in the markets, we will need to ensure that we have strong and credible firewalls in place. I am, therefore, very pleased that Monday's meeting reiterated our agreement to come back to reassess the adequacy of the resources available under the EFSF and the ESM when we meet again at the beginning of March. This will be an important discussion, including for Ireland. While we are making progress in our recovery, we remain vulnerable to negative developments elsewhere. In this regard, I welcome the fact that colleagues reiterated their view that positive progress is being made by Ireland and that they will continue to provide support to countries under a programme until they have regained market access. This is an important reassurance as we work towards that important goal. This statement was included in the conclusions of the meeting and in the communication thereafter.

The road ahead for Ireland and Europe is long and difficult. Recovery will not be built in a day or at a single meeting. However, on Monday we took important steps in the right direction and I will be ensure that my colleagues deliver on what they have agreed and that our undertakings are turned into concrete actions in the period ahead.

Deputy Micheál Martin

Over the next few months there will be much debate on the ratification of the fiscal treaty to which the Taoiseach agreed on Monday. This is already shaping up to be a destructive process solely focused on the form of ratification rather than on the future of Europe and our role in it. For the first time since we applied to join the Union 50 years ago, we begin this debate without basic information being publicly available and without even the most elementary consensus between parties positive towards the European Union.

There is great danger that the approach to date and the pushing through of this treaty without any public engagement will do lasting damage to the standing of the Union in Ireland. For the sake of rushing through this treaty, we could damage the possibility of ever again winning support for an EU initiative. Given that this treaty commits us to a major new EU treaty in the next few years, this is an urgent concern.

It has been a bad year for Europe. Never before have its citizens been in such need of assistance and never before has the Union seemed less able to provide it. This is a defining moment in the Union's history. In the face of an unprecedented crisis, it must find new ways forward. Developments of long-standing policies simply are not good enough. The public demands answers and it our duty in this House to speak directly and constructively. We must speak hard truths, but must also show people that we are pushing credible solutions. The flaws in the way this treaty was negotiated, its contents and its ratification are so significant that they must be talked about. However, we cannot leave it at that; we need something more positive.

The issues discussed and agreed on Monday are at very best a small step. No matter how good the presentation of it is, this treaty and the measures agreed on Monday do not show the public that a solution is in hand on Europe's crisis. The measures are not radical enough and they do not tackle the urgent need to reform the ECB and expand European investment. While commentators talk about a theoretical possibility of new flexibility, in reality there is nothing more on the Union's agenda. The approach to EU issues in this House since the election has involved more heat than light. There is more time available for speeches, but there has been a refusal to provide information or respond to direct questions. We urgently need to change this. We need a genuine effort to find consensus among those who want the Union to work and we need this effort to start now.

Before addressing the real substance of the summit, I reiterate that the broad thrust of discussions on Monday about support for SMEs and redirecting funding must be welcomed. What is not welcome is the attempt to over-spin their significance. Completing the Single Market in areas such as services will help the broader European economy in the medium term. Hopefully, this in-principle agreement will become more definite in the near future. I hope too that the Taoiseach has the Labour Party on board in terms of services across the European Union, because it is not so long since it labelled the services directive as a Frankenstein.

As for the redirected Structural Funds, a similar reallocation has been a part of this funding for at least two decades. The reapportionment of funding not drawn-down is a basic principle of funding and has helped it to be highly effective in the past. This is a process from which Ireland has always benefited because our unfairly maligned public servants are among the most effective and efficient in Europe in implementing support programmes. What is really needed is new funding which can help countries currently unable to invest in job creation in spite of growing unemployment. If an initiative is not large enough to merit changing unemployment forecasts, it should not be presented as a major initiative. Over-claiming the significance of what was agreed on Monday will just feed disillusionment as people fail to see the impact of the measures in the near future.

Over the past twelve months, the European Council has held an unprecedented number of meetings. These meetings have mostly been held in the middle of a crisis and have always been followed by claims about decisive action and returning confidence. After all of the effort which has been put into these meetings, we are still faced with the fact that growth is falling, the cost of funding public services is rising and unemployment is at its highest ever level. Take, for example, the statements following any of last year's summits and compare them to what happened afterwards and it is clear that the European Council is failing. It is failing to restore confidence, it is failing to show leadership and, worst of all, it is failing to respect the spirit of solidarity on which the greatest international body in history was built. The reason it is failing is simple. This crisis involves radically new challenges, yet the Council has tried to tackle them with a set of incremental changes to existing policies. Every initiative has been delayed and others have been pushed in the face of evidence that they were not working. At Europe's hour of need, its leaders have been timid and obsessed with domestic political manoeuvring.

The economic impact of this has been very serious. Confidence and the ability of states to invest for recovery have been undermined. Just as serious, and with the potential to cause long-term problems, has been the damage to the standing of the Union with its citizens. 2011 saw the sustained destruction of public confidence in the EU. Since these issues began to be measured 35 years ago, there has never been such a dramatic and concentrated fall in sentiment towards the EU. Only 19% believe that the Union is heading in the right direction, while a majority say the opposite. This is not just about a eurosceptic fringe, but a factor throughout the Union, and most disturbingly it is now a factor in this country. Measured against figures taken just before this Government took up office, by last November the Irish public had moved suddenly to a negative view of Europe's direction. Sentiment declined by an unprecedented 38%. During three years of crisis this sentiment had remained strong, but it collapsed last year in the face of growing despair at the failures of Europe's leaders.

The consensus in this country has consistently been that people believe in the EU as a positive force. This has not always been the same as supporting EU treaties, but the reflexive anti-EU suspicions of its consistent opponents have never been a mainstream view of citizens. My fear is that if we do not quickly restore trust and confidence in the Union, then we run the risk of damaging its democratic legitimacy. The old arguments and cries to just rally to the cause have nothing to offer. In fact they are making matters worse, because they seek to deny legitimate concerns.

It is impossible to comment on the content of the agreed treaty without addressing the process by which it was developed and by which Ireland agreed to it. At European level, even the most basic groundwork has not been done to show the logic behind individual provisions of this treaty. Public debate was discouraged and a handful of bilateral summits were allowed to replace inclusive negotiations. The Taoiseach is not alone among his peers in having failed to undertake a detailed series of meetings with others. After three years of an economic crisis, a rising sovereign debt crisis made it clear that Europe needed new policies. It created bailout funds but struggled with the agenda of how to prevent the need for bailouts. Policies which forced Ireland and then Portugal out of the bond markets have been continued, with other countries surviving only due to indirect and probably unsustainable support.

The lack of stronger fiscal controls did not cause the crisis, but the narrow agenda of one country has made it the main focus of the proposed solution. Given that Ireland would have comfortably met every provision of this treaty in the decade before the crisis, no one has yet explained how the treaty would have prevented it.

Negotiations were not inclusive and they fostered acrimony and a lack of ownership of the outcome. It should be a concern to everyone that this is the first time in the Union's history that a treaty will not be signed by all of its members. At home this is the first time that no serious effort was made to seek input to Ireland's negotiating objectives for a treaty, and the first time when these objectives were not outlined in detail for the public. Long before December's text was negotiated, I wrote to the Taoiseach seeking engagement. He refused, saying that he saw no benefit from it. After he had already agreed the principles of the treaty, he called a meeting of all groups at which he gave no new information and he has failed to follow up a specific request from me for an analysis of the economic impact of what is proposed. In contrast, previous Governments of different make-ups were far more open. First of all, parties were given the basic respect of separate meetings when they were sought. Former Taoiseach John Bruton and former Tánaiste Dick Spring kept the Opposition fully informed in the Amsterdam treaty negotiations. For the constitutional treaty and Lisbon, the Opposition actually participated in the development of Ireland's negotiating position.

The Taoiseach will know that I was fully open with his spokespeople during the consultations I held while preparing the revised Lisbon proposal. They were given repeated briefings and the ability to make submissions which were incorporated into Government positions. Deputies Timmins and Costello made contributions to the final proposal and ensured that the mainstream pro-EU consensus survived. If the Taoiseach wants a constructive ratification debate he needs to begin respecting the fact that there are legitimate, pro-EU reasons for being concerned about this treaty.

We said last year, before any other party, that a core principle needed to be followed for the ratification of this treaty. If it involves any significant change then the people should be consulted. It has been clear for a long time that the Government wanted to avoid a referendum at all costs and Ministers have briefed extensively that they expect to be told that a referendum is not required. Today's newspapers reveal that the Taoiseach's claim to have no concern about holding a referendum is nonsense. At all stages of the negotiating process, the avoidance of a public vote was the primary objective for the Government.

The Taoiseach is now backing himself into the corner of arguing that the treaty is powerful enough to save the euro, but not significant enough to require a vote of the people. This approach is one which instinctively and rightly alienates people. Is it not a terrible indictment of the leaders of Europe that the Irish courts will soon hear State lawyers argue that this is a treaty which is too insignificant to require a vote? Does it not say something deeply depressing that our Government's position is that an unprecedented crisis is being met within existing policy limits?

The Taoiseach is well aware that there were people pushing the idea of parliamentary ratification of the revised Lisbon proposal. I and others refused to agree to this because we saw that such a move could cause permanent damage to the public's support for the EU. It was rightly decided to let the people decide. This position was supported by Fine Gael and the Labour Party in this House and in the campaign. Sinn Féin was true to its 40 year record of attacking every single EU treaty change and worked to use the referendum to promote itself rather than any constructive proposal. The manoeuvring we have seen from Sinn Féin and other anti-EU groups is entirely based on wanting to have something to campaign against.

I am disappointed the Taoiseach did not comment on that legality. However, there is a more fundamental point at issue here. Can we stand over a process where the people have been excluded at every stage of negotiation and ratification? The public has not only not been consulted; they have been ignored. Equally, the major policy omissions in the treaty are also too big to ignore.

If this treaty is the end of the debate on the structural reform of the economic and monetary rules of the European Union, then the public must be consulted. It is clear that the Taoiseach will come back in a few weeks to say that ratification through the Oireachtas is likely to survive the various legal challenges which will immediately be launched. Is he willing to come back with a much more significant proposal which shows the people that they are being listened to?

I have said consistently before that our major problem with the treaty is that it does not go far enough. It elevates a side issue, the imposition of fiscal controls, to a central position and ignores the agenda Europe needs. The Fianna Fáil Party supports a significant increase in the economic role of the European Union. In response to the crisis, Ireland has favoured greater federalism in key areas. While this marks a departure from the Irish position of the past 20 years, it is the only reasonable way to respond to the crisis.

There are two major reforms without which this crisis will not be overcome and the predictions of long-term austerity will be realised. The European Central Bank is designed for the German economy of the 1970s and has failed as a central bank for a diverse currency union. The need to change its mandate and expand its bond buying options is more important than any single item on our national agenda. Greater fiscal union, which Fianna Fáil supports in principle, can only work if it involves a commitment to significant transfers within the Union. A union which controls a budget of 1% of collective income is not and will not be a fiscal union. We need to challenge the advocates of a control led solution as without increased investment, there will be no growth. These matters were not seriously discussed in preparing the treaty. They were not pushed by Ireland or other countries which were intimidated by the strength of the fiscal control agenda.

If we want to renew public confidence in the European Union, we must renew our approach to working together on European policy. The lengthy tradition of the pro-European Union parties consulting on the national approach to negotiations was abandoned and there has been too much partisanship. I appeal directly to the Taoiseach to work on forging a new pro-EU consensus, one which is based on taking people's fears seriously and promotes an agenda ambitious enough to tackle a crisis of this scale.

As I have stated repeatedly during the past year, I believe in the great European ideal as the best and perhaps only route to sustained prosperity for the people of Ireland and Europe. I am the only party leader to have gone beyond generalities by setting out an economic case for saving the euro. My party's gut reaction to the European Union has always been and will always be that we see it as a solution rather than a problem, and as empowering sovereignty rather than threatening it. Our core instinct is to support common initiatives, even if we believe they are not perfect. We will not take any position which will damage the standing of the European Union and its ability to work on behalf of its citizens.

Instead of letting Monday be the point from which everyone is summoned to take opposing positions, we need a real discussion about the way forward. The treaty must become a part of a wider series of urgent initiatives which are capable of tackling the crisis. As no wider action agenda has been promoted, the treaty is currently a stand-alone measure and the end of a process. If the Taoiseach agrees that any solution to the economic crisis must involve the European Union, he cannot keep to this position. To do so would be a betrayal of the hopes and urgent needs of the citizens of this State and the European Union as a whole. There is no credibility in promising that something will eventually happen once the treaty is ratified. It must not be ratified in a manner that is dismissive of the public. Once we lose the foundation of pro-European Union sentiment among the people, we will not get it back. Once we use legal devices to avoid any public consultation on the treaty, it will be almost impossible to get more urgent changes adopted.

Deputy Pádraig Mac Lochlainn

The Taoiseach and leaders from 24 other European Union member states agreed to a new austerity treaty which will mean imposing savage austerity on the citizens of this State and citizens across Europe for years to come. It is not a real surprise that the Taoiseach supported this treaty as he has long signalled support for the austerity approach despite its devastating social consequences.

In recent days, the Taoiseach stated he had "no fear or concern or anxiety" about the prospect of a referendum on the treaty. The major focus of the Government's negotiation strategy throughout this entire process has been to avoid the necessity to hold a referendum. If he has nothing to fear from this process and is so confident about the austerity treaty, why does he not stop hiding behind the Attorney General and put the text to the people? The Government should hold a referendum on the eurozone austerity treaty irrespective of the legal advice given by the Attorney General.

Sinn Féin believes the treaty, if ratified, will have a profound impact on the Irish economy and people for decades to come. Recent opinion polls confirm that the overwhelming majority of the electorate supports our view. A massive 72% believe a referendum is necessary. It is clear, therefore, that people want to have their say on this matter. The Government does not have a mandate to sign up to a treaty which will have such serious implications for the future. It must do the right thing and hold a referendum.

Sinn Féin has argued that austerity is not the answer to this crisis but part of the problem. What is needed is a strategy for jobs and growth through stimulus. While European Union leaders seem to have finally woken up to this reality and discussed these issues at their summit, not one additional cent has been allocated to job creation. Rather than announcing new plans or providing new money for job creation, all that emerged from the meeting was a rehash of existing plans and money.

The so-called debt brake of 0.5% of GDP will heap yet more austerity on people in Ireland. It will result in the hand-over of significant control of fiscal and budgetary matters to unelected and unaccountable EU officials. The austerity treaty is bad for Ireland and Europe. Rather than stabilising the euro, it will make matters worse. In seeking to impose drastic and destructive austerity policies into perpetuity the Government is signing all of us up to budgets that involve savage cuts for its full term of office and beyond.

What is completely absent from the treaty are any moves towards debt restructuring. Last week, the Taoiseach told the world that the people of Ireland went mad borrowing and this led to the economic crisis. The reality was that Irish banks went mad borrowing cheap money from European banks. They did so to make a profit and because they were greedy. Their actions drove house prices ever higher, forcing citizens to borrow large amounts of money simply to buy a place to live. These self-same banks are now being bailed out by the taxpayer at a colossal cost of €63 billion.

Last week in the Dáil, the Taoiseach stated he did not want to have the word "defaulter" written "on our foreheads" and he had not sought a debt write-down. The point is that the banking debt is not the people's debt and should not be paid. Did the Taoiseach raise this issue at the European Council meeting?

The Taoiseach

No.

Deputy Pádraig Mac Lochlainn

Does he believe Ireland can and should continue to shoulder the burden of the promissory note?

The Taoiseach

As the Deputy is aware, the troika prepared a paper on that issue.

Deputy Pádraig Mac Lochlainn

The European Union institutions, supported by the International Monetary Fund, have responded to the crisis by imposing heavy austerity on the populations of peripheral economies, while forcing their governments to take on massive loans to bail out toxic banks. This response is having devastating social consequences, not only in Ireland but across the European Union. Despite an endless round of crisis summits, a massive transfer of moneys from taxpayers to banks and the austerity treaty, the response to the crisis is not working. Youth unemployment is at crisis level, with nearly one third of young people in Ireland and almost half of Spanish young people out of work. Thousands of young people have to leave the State every week to try to make a living elsewhere. What does the future hold for them? Where is the hope for them? As a man from the west, the Taoiseach is aware of the impact of emigration and the shadow it casts on the small, rural communities dotted across the west. He knows about the empty seats at dinner tables during the Christmas period just passed and the tears shed at airports. We do not want to hear Ministers describe emigration as a lifestyle choice again.

Sinn Féin believes Ireland's place is in Europe. Co-operation with our European partners is essential if we are to meet the challenges facing us in the time ahead. In attempting to portray the choice before Irish people as one of accepting the austerity treaty or leaving the euro the Government is simply scaremongering. The scenario it presents is incorrect because Ireland's position as a member of the eurozone is secure irrespective of what position we take on the treaty. The real question facing the Dáil and citizens is whether this treaty is a good deal for Ireland and Europe. Sinn Féin firmly believes the answer to that question is a negative.

In regard to Article 3.2, as the Taoiseach knows, the language in the first draft was very clear at the insistence of Angela Merkel's Government that we shall transpose these agreements into the constitution or equivalent legislation. The first draft was very clear about what Chancellor Merkel's Government wanted. The Taoiseach's colleague, the Tánaiste, speaking at the Joint Oireachtas Committee on European Union Affairs, confirmed - the Taoiseach refused to do so today, so I will clarify the matter for him - that our negotiators, clearly at the instruction of either the Taoiseach or the Tánaiste, presumably both, actively sought to weaken that text and to put in the words "preferably constitutional" in order to avoid the requirement to put this proposition before the people. However, the words "binding" and "permanent" are still there. All of the draconian austerity measures, which will go beyond this troika package, are still there, as are all the implications. The only change which the Taoiseach secured was to prevent the people having their say on this issue. That is outrageous and shameful.

Then we had the Minister for Transport, Tourism and Sport, Deputy Leo Varadkar, tell us that in these debates, people tend to focus on all sorts of things. They might focus on septic tanks, bank bailouts and other such issues. This is an 11 page document. Even if some of his points were accepted, it is not the Lisbon treaty or the Nice treaty. The issues are clear, they can be argued clearly and can be accessible to our people. There is no justification for not putting this before the people because the implications are so profound. That is what the Taoiseach achieved in the negotiations. The only thing he achieved in terms of Chancellor Merkel's crazy austerity-driven approach is to prevent the people having their say.

Austerity has not worked. If the Taoiseach does not want to take Sinn Féin's word for it, I am sure he will take the word of the IMF. The IMF recently published a report which looked at austerity over the past 30 years and 173 different case studies. All that austerity has done, in the absence of some growth strategy, is drive up unemployment and make conditions extremely harsh. This is a mad strategy and I have yet to hear one economist say it can possibly work or, as the Taoiseach said was his objective, get Ireland back to work, or make Ireland the best small country in the world in which to do business. How in the name of God will he achieve that by signing up to this document without any plan for growth, without any sense of investment and without any real economic approach or outline plan?

If the Taoiseach is not happy with the IMF, I will give him some more examples. Joseph Stiglitz, the Nobel prize winning economist and the person the Taoiseach called a "commentator" - commentators comment when the Taoiseach is over in Davos where he said the people went mad borrowing - travels the world-----

The Taoiseach

An eminent man.

Deputy Pádraig Mac Lochlainn

Yes, an eminent man. He said that paying back unsecured bondholders was unconscionable. He talked about this being a suicide pact. That is the language he used. He is a very thoughtful man who has inspired people with his analysis of economics and what needs to happen around the world. He said this whole approach of austerity was a suicide pact.

Now if Joseph Stiglitz, who the Taoiseach called a "commentator", is not good enough for him, I will give him George Soros.

The Taoiseach

That is why we put growth as a central issue on the agenda-----

(Interruptions).

Deputy Pádraig Mac Lochlainn

Now I will give the Taoiseach-----

An Ceann Comhairle

This is not a debate. This is a series of statements.

Deputy Pádraig Mac Lochlainn

Now I will give the Taoiseach George Soros. Does he want to hear about George Soros?

An Ceann Comhairle

You are inviting comment. You do not do that when you are making statements.

Deputy Pádraig Mac Lochlainn

That is fine. George Soros-----

The Taoiseach

I have always endorsed the IMF.

The little document which was used as window dressing to the austerity treaty has no new money or no new plans. It is a reconfiguration of existing ideas. We need a dramatic intervention and a real message of hope, jobs and growth to be sent to people throughout Europe, in particular, in the interest of the Taoiseach, to people in Ireland. That is the first element in terms of investment.

The second element is the banking system. Let us have a bit of honesty about this. There must be rigorous stress testing of the core European banks because we have not had it to date. We know they behaved recklessly and were utilised strategically to take that trade surplus and wealth in Germany and other states to invest it in the periphery, whether a bad investment in the Greek Government or an appallingly bad investment in the private Irish banks. We know they have caused this crisis and that it was not caused by the people going mad borrowing. We know there was a fundamental lack of regulation in the international financial system which was not just limited to Europe. We know it happened in the US also. When will we have rigorous stress testing of those banks and then some deleveraging? We can then recapitalise when we know where we stand. We have had some tinkering around the edges. This is the core issue that Sinn Féin believes these states are afraid of. When we go to that issue, we get to the root of the problem. However, there is no Government solution to address it, other than to say that we must have more austerity.

The third element, after investment and banking, is sovereign debt. We must have a real discussion about how Ireland, Greece and other countries will sustain this debt. Where is the burden sharing? Where is the pain being felt by the banking system for the calamitous approach it took to global finances? There has to be a real debate about that.

We in Ireland cannot be condemned to these annual €3.1 billion promissory notes, nor can we be condemned to continue with these cuts and all the lobbies we have to face. I am sure if we had more Fine Gael and Labour Deputies here for this debate they would testify that their clinics are packed and their diaries are full of meetings with representations from schools, hospitals and other sectors that say they cannot sustain the cutbacks. There must be hope for a way out of this situation.

When the Taoiseach was first elected to the Dáil all those decades ago, I do not think he ever imagined that he would be presiding over such a scenario. At some point, he will have to give our people hope. He will have to go out there and find that Irish spirit, which has been there for generations, to do something about this. He will have to go in and say, "Folks, enough of the niceties and frivolities - the 500-lb gorilla in the room is this crisis which is not being addressed properly". He will have to tell Chancellor Angela Merkel that we do not have a crisis because the Irish people went mad borrowing and spending but because political leaders, the global banking system, estate agents and economists, who were paid by the financial institutions, utterly failed our people.

When the regular Joe Soaps and five eighths turned on their televisions at home every single night, an economist was telling them they had to buy now because house prices were going to rise further. Then they said there would be a soft landing. When they opened their newspapers, there were property supplements about lifestyles and how many houses were for sale. Our people are not Harvard, Yale or Trinity-educated economists; they are just hard-working, decent people but they were profoundly failed by their political leaders. When will that conversation take place? When will we say that those responsible for this will pay a price, like the former chief executive of the Royal Bank of Scotland who was stripped of his knighthood? When will there be a radical realignment of that system, instead of those responsible being rewarded in America as treasury secretaries, and in Europe being appointed as technocrat prime ministers or to the presidency of the ECB? Those are the very people in Goldman Sachs who drove this crisis. Mr. Peter Sutherland, a former European Commissioner and Irish Attorney General, is telling us that we should pay our way. He is not representing the interests of the Irish people, however. He is representing his pals in Goldman Sachs. At what point will we confront those who colluded to do so much harm to the people of Ireland, Europe and globally? The Taoiseach knows that Sinn Féin is right in this analysis. Why do we give these people a place at the top table?

We must allow the European Central Bank to access primary markets and purchase those government bonds. There has to be a way of deploying the European Investment Bank, the ECB and our collective wisdom to address this crisis and give our people hope. Sinn Féin does not want to see the destruction of the potential for a social Europe. Ireland cannot achieve her potential on her own. We must engage with the outside world in transacting business and building alliances. We must stand together and challenge injustices, including human rights abuses. We should be clear that there is a solution in working with our European partners, but at some stage we must collectively challenge those who caused this crisis. The Taoiseach can be sure that it is not the ordinary people of Mayo, Donegal or Dublin who did so.

Deputy Mick Wallace

I wish to share time with Deputies Shane Ross, Clare Daly, Richard Boyd Barrett and Seamus Healy.

Acting Chairman (Deputy Paudie Coffey)

Is that agreed? Agreed.

Deputy Mick Wallace

A lot has been said about what this fiscal compact means for us and the rest of Europe. I would like to quote from Martin Wolf's article in the Financial Times today. He puts it pretty well when he states:

The ECB has saved the eurozone from a heart attack. But its members face a long convalescence, made worse by the insistence that fiscal starvation is the right remedy for feeble patients ... fiscal indiscipline is not all. Just as it was not the dominant cause of the collapse, but rather sloppy lending and improvident private borrowing, so fiscal discipline is not the cure. This attempt to vindicate the catastrophic austerity of Heinrich Brüning, German chancellor in 1930-1932, is horrifying. The perspective embodied in the fiscal compact - itself an attempt to revive the failed stability and growth pact - lacks the necessary understanding of the dependence of output in one member country on demand in others, of the role of payments imbalances and of the fact that competitiveness is always relative.

There is little doubt that the level of austerity that this brings to the rest of Europe suits Germany more than the other 26 member states. In fact, it can be argued that not one of the others is very fond of what is being imposed on them by Germany. The Germans are in control and very few in Europe seem to have the stomach to contradict our masters today. Regardless of whether we like it, it appears that the politicians no longer run Europe; it is being run by the financial markets and banking institutions. The latter institutions have probably been the most culpable in the current crisis. They are the ones who have lost most money and had the poorest business models, yet they are being saved. We are going to do everything that suits them, rather than those who are suffering at their hands.

This treaty definitely enshrines the German model of fiscal and monetarist rigour, as binding on the eurozone. It almost literally outlaws Keynesian economics. It was interesting to hear the German Chancellor, Dr. Merkel, saying on Saturday that "We will only be able to strengthen our common currency if we co-ordinate our policies more closely and are prepared to gradually give up more powers to the EU". So we are going to give up more powers to the EU, but I do not believe the Government got a mandate for doing that last February. There is a general election in this country every five years, but I do not think it appropriate that it is the only say the public should have in how things are done here. Given that the Government parties went into the election with various promises and a different mandate came out of it for them, I do not think they now have a mandate to do this. Whether it is demanded constitutionally or not, the Government has an obligation to put this matter to the people. We pretend to live in some form of democracy - a more fitting definition of this democracy is: "You can say what you like, and you do what you're told." We pretend, however, that it is a little bit more sociable than that, so I do not see how the Government can refuse to give the people a say on this matter. It is really important to do so.

Attending meetings on the household charge in recent weeks, I have noticed the amount of public interest in how the country is being run. It is fascinating and much greater than I could have anticipated. The notion that the people are not clued in to what is happening is completely dishonest. It is not true. I have been amazed at the level of interest and knowledge that people have all over the country in the current crisis. They would like a say on this issue. If this Government wants the mandate to work with this fiscal compact, it must be put to the people.

Deputy Shane Ross

I agree with nearly everything Deputy Wallace said. Are the 24 other parliaments sitting today, with their Prime Ministers telling them it is a great victory and relating how they told European leaders the way forward at the Brussels summit on Monday? This is an agreement dictated by one nation to the rest of us. This is a German prescription for Europe. The Taoiseach's speech referred to that period being over and the future being growth, employment and small businesses but he is whistling past the graveyard. What was so notable about what he said is that what is going to happen in the future was not made specific. If anyone can tell me how austerity and a stimulus programme can be reconciled, that person should ascend into heaven immediately. It will not happen and this particular project will suppress growth, not just in Germany but throughout the 27 nations. Every member state is going back to their people and painting a false picture of the future. The economy of this country will be dictated by outside forces and in the main by one particular doctrine. We have accepted that. The idea that we can paint a picture of future growth, reductions in unemployment and a great future for SMEs is nonsense. It will not happen and the Taoiseach's refusal to spell out any projections for employment or unemployment indicates that to be the case. It would be an absurd hostage to fortune and the Department of Finance is projecting an unemployment rate that only comes down marginally during the tenure of the Taoiseach if he continues until 2015 or 2016. It is not realistic to do that and it would be better if we had a clear and honest message to the Irish people, that there will be very little growth, unless something extraordinary happens, and that this is part of a doctrine that we must adhere to in the future. That is the depressing message.

Yesterday, figures from the Central Bank show that lending to businesses, despite the Government's protestations, fell in December by 1.6%. The banks protest, along with their colleagues in government, that they have not just set targets but are lending more to businesses. They are not, they are lending less rather than more. The problem with the German, Dutch and Austrian agenda, which we are being asked to dance to, is that they are low unemployment areas, with Germany at 8.6%, Austria at 4.1% and the Netherlands at 4.9%. I said this during Leaders' Questions and I want to expand on it now.

Acting Chairman (Deputy Paudie Coffey)

Deputy Ross is eating into his colleagues' time.

Deputy Shane Ross

They have no interest in unemployment or at least much less than this nation. Unemployment is not on their horizons.

Deputy Clare Daly

Today, The Irish Times quoted Merkel saying the discussions over the weekend represented a masterpiece. With the exception of the Taoiseach, not many other people agree with the comment. Ordinary people across Europe who have been bearing the brunt of austerity have a very different perspective on the discussions taking place. The title, Treaty on Stability, Co-ordination and Governance in the Economic and Monetary Union, might be quite a clumsy mouthful but it is a simple proposition. It is a proposition to enforce institutionalised austerity, which people throughout Europe have been organising against. Is it any wonder that, in order to bring in these policies, we have seen a shift from democratic rights and entitlements throughout Europe, with the imposition of Governments of technocrats and bankers in Italy and Greece? The trappings of democracy have been discarded and our Government is no different because the dogs on the street know that the only purpose of the negotiations of the Taoiseach’s team was to manoeuvre a situation whereby Irish people are denied the right to have a say. Is that because the Government knows so much better than all the plebs sitting at home and has all the answers? Everyone knows the reason is that the Government is afraid that people suffering under the programmes being initiated will not tolerate the continuance of these policies. The Government would prefer to take the flak by hiding behind legal manoeuvres in order to avoid a referendum. However, the Government will not get away with it and it will be put under massive pressure inside and, more particularly, outside the House. The issues are too important.

What is being considered is not a minor tweaking of existing practices; the clear agenda is to institutionalise austerity and undermine democracy. One of the key provisions is the balanced budget and the attempt to outlaw any deficit greater than 0.5% of GDP. This is to outlaw expansionary fiscal policy and to enshrine the type of slash and burn policies implemented with such devastating consequences over the past number of years rather than policies of borrowing to invest in public works, create jobs and redevelop the economy. It is not just the lunatic left fringe that makes these points but also respected economists and Nobel prize-winning economists. Joseph Stiglitz described the discussions last week as "a mutual suicide pact", "the medieval practice of bloodletting", which will only make the situation for the patient worse. Any chance of recovery will be severely hindered by this deal. It would be a disaster to continue the policies that have failed so badly. A crucial component of this measure is the move to further economic governance, which takes significant budgetary powers from elected Governments to the unelected European Commission and the European Council. There are also massive fines for those who breach the targets. There is already a major problem in this country and other so-called democracies with political parties getting elected on a platform, coming to power and then doing the complete opposite of what they were elected to do. Can we imagine a scenario, against a backdrop of this treaty being voted for, where the same people shrug their shoulders, say there is nothing they can do, that they have no powers, and they are in place as the pet poodles of the European establishment?

One of the reasons these measures undermining democracy is being imposed is because governments feel the pressure from mass movements of ordinary people organising against austerity throughout Europe. Is it any wonder, when one considers the situation in Greece with youth unemployment at 50%? Surveys show that 91% of households have had a cut in income, the majority of which have taken cuts of 30%, and 78% of families are really struggling. There was the biggest general strike in Portugal since 1974 and a general strike in Belgium last week. People throughout Europe are organising against austerity and people in Ireland are no different. The debate we need is not whether we are in or out of Europe but the type of Europe we should have to serve the interests of the people, rather than to serve the wealthy elite at the top.

Deputy Seamus Healy

As I have said before in the House, the EU and IMF are not good samaritans helping out a country in need. They are ripping off this country to pay for the reckless lending of European, particularly French and German banks. The major European powers have insisted that the liability of Irish banks be absorbed into Irish State or sovereign debt.

The very wealthy in all eurozone countries indulged in an orgy of reckless lending, borrowing and fraudulent financial transactions. Now Ireland and other so-called programme countries, which are deeply indebted, are being unfairly burdened with the consequences forever under this imperialist treaty. Since coming to power, the Government has claimed its austerity programme is designed to "restore economic sovereignty". The same Government is now giving away our economic sovereignty forever. Most commentators agree that under this treaty Ireland will be in the equivalent of an EU-IMF programme in perpetuity.

To make matters worse, the Government, like its Fianna Fáil and Green Party predecessor, is determined to place the entire burden of debt and fiscal adjustment on those on low and middle incomes, while huge personal assets remain untaxed and the very wealthy do not pay their fair share in taxation. It goes without saying that there should and must be a referendum before any such treaty is ratified. Basic patriotism and loyalty to the interests of the Irish people should require any Irish public representative to call for a "No" vote. It is clear Ireland can stay within the European Union while rejecting this treaty, as the United Kingdom has done.

It is interesting to note that not a single Labour Party Deputy is in the House for this important debate. It is shameful that it should agree to handing over Irish sovereignty to new and old imperialist powers. It claims James Connolly as its founder. He advocated the reconquest of Ireland by its own people and the wrenching of economic and political sovereignty from foreign landlords and capitalists. Now the Tánaiste, Deputy Gilmore, has rejected Connolly by consigning this country to economic servitude to major international capitalists forever. The replacement of the Labour Party is a matter of the utmost urgency and importance.

I want to put on record my support and that of the United Left Alliance for the initiative of the Technical Group in petitioning the President, Michael D. Higgins, to refer any Bill which might arise for consideration by way of referendum by the people.

Deputy Richard Boyd Barrett

Before the last election Fine Gael and the Labour Party railed against the arrogance of the Fianna Fáil Government and promised more democracy and accountability, open government and to get Ireland working. Yet, one year on the Government is conspiring with EU leaders to deny people a vote on the treaty which will further and substantially dismantle democracy across Europe and lock the citizens of this country and the rest of Europe into a straitjacket of austerity and cutbacks, which would guarantee mass unemployment and emigration for at least a decade if not longer and from which we may never recover.

It is extraordinary to hear the Minister, Deputy Varadkar, talk about how the Irish public would not understand the provisions of the treaty and get caught up in extraneous issues. It is unbelievably insulting-----

Dáil Éireann debate - Wednesday, 1 Feb 2012

European Council Meeting: Statements

Deputies

Dáil Éireann debate -
Wednesday, 1 Feb 2012