I welcome the opportunity to speak on the Thirtieth Amendment of the Constitution (Treaty on Stability, Coordination and Governance in the Economic and Monetary Union) Bill 2012.
Fianna Fáil is a pro-EU party because we believe it is the only credible context in which the small, peripheral country of Ireland can succeed. Many people are suffering today because of the impact of the recession, unemployment is very high and living standards are under pressure but we must be honest and acknowledge that since 1973 Ireland has benefited greatly from being in the EU. Being an active member is always more beneficial than being on the outside. Membership of the EU gives security for those wanting to invest and opportunities for those who want to export. The EU remains an immense force for good in areas such as equality, education and working conditions.
It is important, however, to note that because we are pro-EU does not mean we are uncritical. There are issues we will be highlighting in that context. There is a duty on all those who want the Union to work to improve it and address its shortcomings. We support the fiscal treaty not because it is the answer to Europe's problems but because it is an essential part of the answer, although not a major part. A stronger and more transparent set of budgetary rules for countries sharing the euro is part of what most experts say is required to secure long-term access to debt markets at affordable rates. It is important not just from Ireland's point of view but because we wish to see other countries involved in the mechanism following the rules. It is no good Ireland being a good European - sometimes too good - if some of the other, mainly Mediterranean, countries are not observing the rules. This is not just to place strictures on the Irish economy, it is to ensure the same strictures will apply to other people. We need to have that confidence as a country.
The contents of this treaty are entirely consistent with what we signed up to in the Maastricht treaty 20 years ago. Many people will say it is a panacea to all of our ills but we should not over-claim the benefits of the treaty. It is important to acknowledge that it would not have prevented our problems and cannot be presented as a measure that will ensure the crisis never happens again. There is nothing in the treaty to prevent another banking crisis and had it been in force five years ago, it would not have prevented the banking crisis then. Nothing in the treaty could have prevented the build-up of our national debt, which is a big part of what is involved in the treaty. The treaty does not even purport to deal with those issues and it is important that people should not make exaggerated claims about it.
The treaty must form part of a wider effort to address the euro's faults. We need to propose reform of the European Central Bank. Every time I have spoken on this issue in recent months, I have said the ECB must be reformed, with more unified financial regulation and an increased budget to provide for investment in the regions and areas with high and rising unemployment. In the midst of this unprecedented crisis, the European Union must be willing to change to reflect the new situation. The treaty is a fair and reasonable part of a broader response to the crisis. It will have a direct and positive impact on Ireland and Fianna Fáil is committed to its ratification.
Before we get lost in the specifics, the stability treaty was signed on behalf of the Government by the Taoiseach in Brussels on 2 March 2012. A total of 25 of the 27 members of the EU have signed this and we now have each of the individual countries ratifying it. There are 27 countries in the EU, two have said they are staying out, Britain and the Czech Republic, which leaves 25 member states. There are 17 eurozone states, which means approximately eight countries that are not in the eurozone but that are in the EU will also be part of this stability treaty. That makes a nonsense of the claim by the Tánaiste on "The Week in Politics" on Sunday when he said the treaty is all about the euro. He was wrong when he said that. The euro is very important but several countries are signing up to the treaty that are members of the EU but that are not eurozone members. It was wrong for the Minister for Foreign Affairs and Trade to tell the Irish people this treaty is all about the euro. It has a lot to do with the euro but there are many other aspects involved in it and it encompasses countries that are not involved in the euro. At the moment polls suggest a majority favour the passing of the referendum but it will be important those on the Government side do not display the same arrogance, assuming they can tell the people what they feel like hearing in advance of polling day and expect them to swallow it. They did not swallow it in the referendum on Oireachtas committees last autumn because of some of the things the Minister for Justice and Equality said. I ask the Tánaiste to withdraw and clarify that comment because we are now at the start of the campaign and he is putting out a message after his party's annual conference on prime time television and already he is misleading and not speaking accurately about the purpose of this stability treaty and I call on him to correct that. If he and other Ministers continue to make wild political statements that might be half right or substantially right, that is not good enough. People want complete accuracy and if people feel Ministers are not speaking accurately, we should not be surprised if they react accordingly.
The notice was published in the Dáil today that deals with the details of the ballot paper that will be issued to people to vote. I will not read it out because everyone will see it. It will ratify the treaty signed in Brussels on 2 March 2012 and states that no provision of our Constitution invalidates law enacted, Acts done or measures adopted by the State that are necessitated by obligations of the State under that treaty, or prevents law enacted having force of law in the State. We are asking people to vote "Yes" if they support that. It is important that when there is a referendum that people should be asked to vote "Yes" to show their assent.
On previous occasions when one was trying to ban something, one voted "Yes" if one was against what was being proposed. It is good, therefore, that it is a straight "Yes" vote.
However, people will ask about the obligations under the treaty. One is bound to worry when one hears the person who might be the next President of France say he wishes to make changes to the treaty. What happens if there are changes to it? We have been told it is not open to negotiation but what happens if Ireland votes for the treaty on 31 May and France succeeds in some renegotiation of it under the new government, if there is a new government, later this year? Will we be obliged to set aside the result of our referendum and return to it again? Will we have to get legal advice as to whether the changes are important? It will then be back to the Attorney General and, inevitably, before the Supreme Court. It is important that it be clarified that no country will be able to change the treaty in its lifetime, which is in perpetuity as the agreement contains no end date.
This brings me to the issue of how the Government is handling this matter. While people are for the treaty, if the Government does not handle the referendum properly, it could face the possibility of not getting a "Yes" vote on polling day. There must be an effort to get a "Yes" result, but the Government is already going about it in the wrong way. I mentioned the remarks of the Tánaiste, Deputy Eamon Gilmore, at the weekend. When we arrived at the Dáil today we received a document in the post referring to the further Revised Estimates for 2012 for the Department of An Taoiseach. These were published today and will be discussed by the sub-committee of the Joint Committee on Finance, Public Expenditure and Reform, which has responsibility for the Department of An Taoiseach. The Taoiseach will appear before the sub-committee tomorrow, which will approve the Revised Estimates for his Department. It is the first Department to revise its Estimates for this year and the only reason it is happening is that there is an allocation in the Revised Estimates of €4.2 million, under subheading A6, to be spent on the referendum on the EU fiscal stability treaty.
The briefing note received by members of the sub-committee states that the Government will distribute a treaty guide to every household in the State during the first week of May to ensure the public is well informed. Obviously, arrangements are already in place so the printing must have been done. Some company, which I hope will be An Post, will deliver it to every house, rather than the fiasco that happened with the leaflets relating to the household charge which were not delivered to every house. I hope a competent company is doing the job. This the first time the full text of the treaty in both Irish and English will be circulated to every household. It will be a complicated document, although I understand each version of it only runs to 17 A4 pages. This will be followed by the distribution of an information leaflet in mid-May. A sum of €2 million from the €4.2 million provision is for the information campaign. Obviously that is being directly run by the Government to distribute the factual information. There will also be a comprehensive on-line campaign, including a website dedicated to information on the treaty and the use of social media. This is the briefing note the Taoiseach will read to the sub-committee tomorrow.
The Referendum Commission has been established and planning for its campaign is under way. However, under the Referendum Act 1998, the commission is unable to incur any expenditure until the referendum Bill is passed later this month. A total of €2.2 million has been allocated for the Referendum Commission. We must now rush through the Revised Estimates on Friday morning because by the time the legislation is passed by the Dáil and the Seanad next week, there will only be a month to the referendum. The Referendum Commission, which should be in existence for much longer than a month, has no legal authority to incur any expenditure, so somebody has been doing all that work behind the scenes and the commission will obviously rubber stamp it and authorise payment for it next week. However, until that happens next Friday, the Referendum Commission cannot engage in any expenditure.
It is a rushed way of doing business. This could have been done two months ago and the information campaign should be under way now. It will get very helter-skelter during the month of May. It will be a big rush. In addition to the leaflets being sent to the houses, the Referendum Commission will publish its information which will also be circulated. The polling cards will also be sent to houses. There will be a great deal of activity and it is all very rushed. The €4.2 million is additional to the cost of holding the referendum, such as the cost of manning the polling stations and the count centres on the day after the referendum. I am not sure what the overall cost will be but I am sure the Taoiseach will outline it tomorrow.
One of the most important issues people are concerned about at European level is what I call the democratic deficit. This has increased recently. There have effectively been bloodless coups with the removal of the governments of Greece and Italy, two democratically elected governments, by the European financial power brokers at the European Commission and the European Central Bank. The governments were removed without an election. That is very rare and most unusual. There are now unelected governments in those countries and that adds to the democratic deficit. At home, the Minister for Transport, Tourism and Sport, Deputy Leo Varadkar, adds to it when he says he has no faith in referenda. He said they are not very democratic. Indicating a lack of respect for people's critical assessment of these issues, he said they will talk about anything and everything under the sun rather than the content of what they are being asked to vote on. It is another condescending remark. Such remarks are among the reasons that referenda are lost in Ireland. It is important that the Government is coherent and gets its act together. It is already behind the clock, given that there are only a few weeks to go.
As I said earlier, the ECB's mandate must be reformed and strengthened, and it must operate more like the Federal Reserve in the United States. I wish to refer to some other points that have not been mentioned. There is no mechanism in the treaty for a country to exit the stability pact. That is one of its flaws. A country should have the right to exit if it wishes to do so in ten, 20 or 30 years' time, but there is no mechanism to do so without collapsing the entire process. There is no mechanism for how to respond if a country seeks a modification to the treaty. As I mentioned, the potential incoming head of state in France might choose to do this, and I do not know where our referendum will stand in that situation.
The treaty provides that a country's deficit shall not exceed 3% of gross domestic product, GDP, and the government debt should not exceed, or is sufficiently declining towards, 60% of GDP. They are the targets in the treaty and fines can be imposed by the European Court if they are not reached. Countries whose government debt exceeds 60% of GDP must reduce their debt by an average of one twentieth per year as a benchmark. This is a critical issue. In its effort to secure a "Yes" vote the Government must produce financial projections. This is a financial treaty, but I have seen no proper documents aside from long wordy pages.
I do not have time to quote remarks made by Brian Lucey, either on his website or to the Oireachtas committee yesterday, about the trajectory of our national debt. Most countries that have signed up to the treaty will not have a problem bringing their debt down over a 20 year period to 60% of GDP. However, Ireland's debt is at 120% so we must reduce it by 60% over those 20 years. Therefore, we can have no deficit and must run a surplus of at least 3% per annum to reduce our debt under this agreement. That will amount to €3 billion or €4 billion per annum for the 20 years after we exit the IMF bailout and the transitionary period. I asked the Oireachtas research service what country in the world has ever reduced its national debt by 60% in 20 years. It could not find any country that has ever done it aside from Ireland during the Celtic tiger economy. However, we now know that some of the figures produced at that time were a mirage. No country in the developed or undeveloped world has been able to achieve that target.
The Government must set out how Ireland will live for the next 25 years if it is to meet the debt reduction targets. Deputy Kieran O'Donnell said earlier that countries do not usually pay off their debt but simply roll it over. However, this agreement ensures that a country must reduce its debt. Germany has not paid its debts from World War II but we are expected to reduce our debt over 20 years. No other country in the west has been asked to do that. The details of that must be spelt out. Inflation and growth might make the job easier, but one cannot assume there will be major growth in the years ahead.
I am calling on the Government to put forward financial projections based on the debt trajectory to which Brian Lucey has referred.
The treaty contains a provision for a country that does not join up by 1 March 2013 to join subsequently. On the last page of the treaty there is a provision whereby a country that has not signed up by then is free to enter at a later stage. That would include the United Kingdom and the Czech Republic. I know there can be no renegotiation by a small country, but could Ireland vote "Yes" in 2013 or subsequently and join at a later date? Even if we are not on the train when it leaves the station we can get on at a stop down the line. Article 15 says, the treaty will be open to accession to member states other than those who have already signed up to it. Article 15 makes provision for countries to join at a later date. That is important.
The voting arrangements must be clarified. If a country is in breach of its agreement under the treaty, Article 7 says its obligation shall not apply where it is established among the contracting parties whose currency is the euro that a qualified majority of them, calculated by analogy with the relevant provisions of the EU treaties on which the European Union is founded...is opposed to the decision proposed or recommended. The treaty, therefore, contains a new arrangement for a qualified voting majority to decide if a country is in breach of the terms of the treaty. The number of countries and the percentage of member states and of the EU population that make up a qualified voting majority must be spelled out. In this case the qualified majority is analogous, not identical, to the relevant provisions of EU treaties. A new concept of qualified voting rights is being introduced in Article 7. We must have clarity on this.
I want the issues I have raised to be clarified in the public interest so that we will have the information and be in a position to vote "Yes". Adequate information on these matters must be provided. People who do not have information tend to vote "No". If we want people to vote "Yes" we must give them the answers to these questions. The questions can be answered in a reasonable manner but I warn the Government not to try to hedge and hide and avoid providing those answers. If people feel the Government is not fully open with information they may choose to vote "No".
Notwithstanding the clause in the treaty and the difficulties of the trajectory of our national debt, politically it is better to be part of this arrangement than to be outside it. I call on the Government to provide clarity on these issues during the coming month so that when people come to vote on 31 May they can vote "Yes" on the basis of full information on what they are voting about.