Vol. 749 No. 2
I move:
That Dáil Éireann demands that the Taoiseach, Deputy Enda Kenny, resist all efforts to force Ireland into a fiscal union at the European Summit in Brussels, and that he refuse to sign up to any treaty changes that hand over our economic sovereignty to a European body.
I wish to share time with Deputies Maureen O'Sullivan, Catherine Murphy, Thomas Pringle, Mick Wallace and Mattie McGrath.
Is that agreed? Agreed.
This is an extraordinarily important day for the euro, but it is also an extraordinarily important day for Ireland. We should not confuse the two issues which, although separate, are intertwined. My primary interest lies in the role the Taoiseach will play when he gets to Brussels from Marseilles tonight. I am concerned about what he will do in the interests of Ireland and with ensuring he will not be stampeded in moving away from Ireland's interest to save the euro. We are in a crisis. In the past few days, as everybody in the House knows, not only has there been frenzied political activity around Europe, among the heads of Europe and officials in the European Community, there has also been a sensational and unhelpful — in terms of finding a solution — downgrading of European banks by Standard and Poor's, the timing of which is something about which we must be suspicious. It certainly looks as if it was aimed at torpedoing a solution or, certainly, putting enormous pressure on people to come to a certain solution.
I am very worried that the Taoiseach will be powerless in the negotiations he will enter into in the next few days. The record of the Government on negotiations with the European Union, the troika and others in recent months has been feeble and craven. We only have to look at the extraordinary flamboyance shown in saying at one stage that it would burn the bondholders and then, having talked to the ECB and been told it could do this, accepting it. My first demand and request to the Taoiseach is as follows. If he intends to put Irish interests first, the first item he should put on the table is the issue of the Irish debt. The strongest and most important card we have to play is that because I have not come across a reputable economist who thinks that at any stage, we will be able to pay off the Irish debt. It is a debt which will be restructured. There must be a change in it or we will default. It is time the Taoiseach took advantage of this critical day and these fragile negotiations to say that one of our demands is that the Irish debt is on the table and that we want a write-off of that debt. That is not an unreasonable demand. The masters of the European banks are dictating the pace of the talks tonight and decided to put us in this debt in that irresponsible way. The meetings this evening and tomorrow is the forum to put that debt on the table and to demand a write-off of it as a price for an agreement.
I listened to what the Tánaiste had to say on the Order of Business. We are, in theory, equals among 27 member states but if we are equals, we should be fearless and we should put Irish debt on the table because it makes the other 26 feel uncomfortable. The last thing they want to hear tonight at the dinner or tomorrow is Ireland coming forward and saying all right but Irish debt is on the table, so pick it up.
I am very wary of what is happening tonight and tomorrow. The big meeting tonight is a dinner and the big meeting tomorrow is a plenary. Bloomberg and Reuters have reported that before the meeting tonight, there is a pre-summit meeting. Who will be at it? According to the Reuters report, it will include the chairman of the euro Finance Ministers, Jean-Claude Junker, the chairman of EU summits, Herman Van Rompuy, the President of the European Commission, Jose Manuel Barroso, the EU Economic and Monetary Affairs Commissioner, Oli Rehn, Nicolas Sarkozy, Angela Merkel and the president of the European Central Bank, Mario Draghi.
Why are all the top European apparatchiks setting up a meeting before the 27 meet? Why are Merkel and Sarkozy the only two insiders invited to that meeting? What is happening in Europe is quite clear. This may not be a stitch up, because they may not be able to get it through, but the intention of the top eurocrats and the Chancellor of Germany and the President of France is clear — they are going to dictate the pace and set an agenda before the meeting which can be accepted or refused. That is why that meeting is happening.
All the top apparatchiks and the two people dictating the pace in Europe are meeting before the meetings today and tomorrow. What does that tell us? It tells us quite simply who is in charge. There is an increasing tendency, which we saw this week, for the eurocrats to dictate the pace and tell us what will happen. The report from Herman Van Rompuy, an unelected eurocrat, said not to worry, that he had a solution to this problem, that they would get treaty changes through without any need for a referendum, that Ireland is a bit of a problem but that they would bypass it. Let us hope the Taoiseach does not agree to any of that little trickery. Mr. Van Rompuy did not just say that. He said they would get it through with an obscure device, at which I think some of the others have baulked at this stage, without referendums in Ireland or in any of the other member states and without even consulting any of their parliaments. That was the proposal early yesterday morning.
If all 27 leaders agree unanimously to fundamental treaty changes, which would lead to fiscal unity, we would not have to have a debate on it next week. It would not have to go through the French Parliament, the German Parliament or any other one. It would be simple and would be agreed by the 27. Something cooked up this evening by non-elected European officials would be agreed and democracy would be bypassed. That is unacceptable and I hope the Tánaiste will assure us it will not be allowed to happen tonight or tomorrow.
The agenda for fiscal unity is undoubtedly there. The two leaders want fiscal unity. That means giving up our economic sovereignty. The Tánaiste may say we do not have any economic sovereignty — I think he has said that many times — but it means we will give it up permanently when the treaty changes go through. The other agenda is what they call "harmonised tax". It was the tax base that was in the letter from Sarkozy and Merkel to Van Rompuy yesterday. Let me remind Members that the Taoiseach said on 16 March of this year that the tax base and any alteration to it was the back door to any changes to the tax rate. I do not believe he has changed that view and he was right to hold it. There is undoubtedly an agenda for fiscal unity which means tax harmonisation which means that Ireland would lose its corporate tax rate and its right to it. I ask the Taoiseach to promise us that he will use the veto, make any change to our corporate tax rate absolutely non-negotiable and reiterate his view that any change to the corporate tax base is the back door to change in the tax rate.
This weekend we are in danger of giving up our independence on a permanent basis. The euro must be protected and defended but Irish interests must come first. The British Prime Minister, David Cameron, is making life very difficult for the other European leaders because he is playing the nationalist card. We need to play it more than he does. We are in danger of losing our sovereign independence and our corporate tax rate and we should use the veto to ensure this does not happen.
There is a point of view on this side of the House that democracy is being sacrificed on the alter of the markets, and I say that as a free marketeer. However, as free marketeers, we must not be prepared to sacrifice the democratic wishes of our people and other peoples in a panic because the markets have put us in that situation.
I very much support the Private Members' motion that we are not forced into fiscal union at the summit in Brussels and that the Taoiseach should refuse to sign up to any treaty changes which hand over our economic sovereignty. When he addressed the nation on Sunday, he said he wanted to be the Taoiseach who retrieved Ireland's economic sovereignty. We are all witnesses to that and I hope that statement does not get diluted in any way.
I admit to never being a supporter of being in Europe. I voted against the Nice treaty and the two Lisbon treaties. I have always felt there were threats to or an undermining of our identity, independence and our capacity to manage our own affairs and that we were very much leaving ourselves at the disposal of the Goldman Sachs of this world. Certain sections of society did very well out of the EU. We know of the billions of euro that went to the farming sector. The IFA would say that many of these payments were between €12,000 and €14,000 but massive amounts of money was provided. The Greencore Group received €83 million as a result of exiting the sugar business. Was that really a good move? Billions were received from the structural, region and cohesion funds but many structural projects came in grossly overpriced — again, a waste of money. In the main, the fishing industry has been decimated.
Would we have been better off staying out of the eurozone? If we had not joined, would we be in this dire economic situation? Some economists believe that the euro facilitated the crisis, as Irish banks could borrow from other eurozone banks without exchange risks and lend that money on to customers. According to these economists, our membership of the EU removes the cap on bank lending and halves the cost of borrowing, resulting in a significant increase in the availability of credit and the halving of interest rates. According to one journalist, "This was the economic equivalent of crack cocaine." The property market suffered considerable repercussions. Had we stayed with our own currency like the UK, Sweden and Denmark did, we might be on the other side of the recession. When the global credit crunch struck in 2007, we might have had a solvent Exchequer and banking system. This would also have depended on having men and women of integrity and with the common good at heart in decision-making positions in banks, finance and public office.
Consider Europe's history. Without being too simplistic, the two world wars were caused by aggression on the part of certain countries. Two countries that were bitter enemies are driving this move. As Arthur Beesley wrote in The Irish Times, “Angela Merkel and Nicolas Sarkozy take lunch together in Paris, the rest of Europe looks on for clues as to where they will lead us next.” Is this democracy àla the EU? Do we really believe that they have Ireland’s best interests at heart? Perhaps they do, but no doubt it will only be if doing so is in the better interests of Germany and France.
Those who are making a profit out of our misfortune are gaining from our bailout. It seems to be the case that, unless France and Germany give us their sanction, this will continue to be the situation. We have the added spectre of the European Court of Justice, which has the power to assess whether national budget rules comply with a country's European obligations.
The possibilities are treaty change, a Schengen-type solution for eurozone states, enhanced co-operation under the Lisbon treaty, tightly focused economic governance, a major revision of treaties and a federal approach. While I am not an expert on economics, it seems that national fiscal policies will need to be deliberated on with partners and there will be penalties for those who breach the agreed benchmarks.
"Save the euro" is the mantra. Perhaps this is right, but Ireland cannot and should not allow itself to be scared or bullied into sacrificing its economic, political or fiscal independence. There is a danger of being relegated to an inferior or subordinate position under the more dominant states. According to Germany, greater fiscal consolidation and control by national governments will ensure the continuation of funds from the new European Stability Mechanism, ESM, and possibly the ECB, but Ireland would not be in control of its budget and would face further fiscal penalties.
We must defend and maintain our democracy and not allow it to be dictated to by the markets. We must prevent a scenario in which smaller, weaker European states have no input and become marginalised and where further fiscal discipline will plunge us into a deeper recession. We have seen the effects of an austere budget, but we must reach a point at which we can make decisions with the common good of this country at heart. Perhaps Iceland and Argentina can teach us lessons.
Like others, I am deeply concerned about this week's developments in Europe. We are approaching the time by which we must act. While I am on Ireland's side, I am also on Europe's side and I want the project and our Government to succeed, but the way in which events are rapidly developing is giving me serious cause for reflection. Never before has the principle of unanimous consent been so recklessly abandoned by the heads of the EU's powerful countries. Never before has the process of intergovernmentalism gone into sixth gear to the detriment of institutions that were designed as safeguards. Democratic legitimacy is becoming a footnote. This is serious.
In a recent essay, Jürgen Habermas stated that Angela Merkel and Nicolas Sarkozy had agreed to a vague compromise and that all signs "indicate that they would both like to transform the executive federalism enshrined in the Lisbon Treaty into an intergovernmental supremacy of the European Council that runs contrary to the spirit of the agreement". The larger members in the intergovernmental process could dominate the others. We have seen it already. Deputy Ross referred to the pre-summit meeting. I wonder whether it is the case that we are not so much at the table any more as we are on the menu. Even the most committed Europeans are questioning the legitimacy of these developments.
During the Lisbon treaty, there was much debate on the loss of our voice at the Commission table, but that table has become irrelevant. Transparency was a primary element of the reform agenda articulated by the Government, yet we are being told to trust it. We do not know what the bottom line is. This is what the last Government did. Citizens saw the bank guarantee in the middle of the night and it went disastrously wrong. We are still working through the consequences this week. While the troika deal was being done, senior members of the Government were oblivious. Parts of our budget were presented to the European Parliament with the phrase "we have decided", yet we were told that everything was on the table. If we are to rebuild trust, we need transparency and we must know what the bottom line is. We cannot rely on media leaks. We do not need to be patted on the head and told that the Government knows what is best for Ireland.
The Minister of State, Deputy Creighton, has welcomed the leadership she has seen in the past week. This is terrifying, as I have not seen leadership, but something more akin to a dictatorship.
Hear, hear.
If there is responsible borrowing, by definition there must be responsible lending. While the disastrous policies followed by recent Governments caused many problems, including the property bubble and the way we exceeded the 3% government deficit figure by a mile, which is one of the criteria for joining the euro, exceeding the 60% government debt to GDP ratio by an unsustainable amount has more to do with irresponsible lending. We were forced to absorb private debts in favour of European banks. For example, the Germans were in hock to Ireland to the tune of €105 billion. We appeared to be bullied into that disastrous decision. We must stand up for ourselves in the negotiations.
I agree with Deputy Ross that while the European backdrop must be kept in mind, we must act for Ireland first and foremost. I want the ECB to be a lender of last resort, but what is Ireland's position on the costs of this and other decisions currently under discussion in Europe? This is an important week for Ireland and Europe.
I welcome the opportunity to contribute on this important motion. The EU is in a crisis of epic proportions. It is not of our making, as the Taoiseach acknowledged in his state of the nation address, yet he is forcing the Irish people to pay for the reckless lending of German and French banks. At the time of the bailout, Irish banks owed German and French banks €103 billion and more than €60 billion, respectively. We have saved their banks for them, which is the reason we are the best boys in the class.
The so-called markets, the ECB and "Merkozy" have forced regime change on two European democracies. Governments of technocrats have been forced on Greece and Italy. It only took the Greeks to consider having a referendum on austerity for the German-French axis to overthrow them. Is this the democratic union of partners of which the Irish have been told every time we vote in referenda? Recently, German Government advisers warned against loose talk, advising against statements that Europe will speak German as this could provoke hostility abroad. They stress that Germany must appear conscious of its power while exercising modesty and discretion in its comportment to avoid provoking resistance. That is a dangerous precedent. If passed, this motion gives the Taoiseach a clear mandate from the democratic Parliament of the Irish people to go to Europe and state clearly where the Irish people stand on the proposals for the creation of a fiscal union, basically forming a federalised super state dominated by Germany with the French hanging on to the coat tails trying to look like they are relevant.
The Taoiseach has to defend Irish sovereignty at the summit at the weekend. It is not enough to go there and meekly take what is dished out by "Merkozy". Looking for concessions on bailout interest rates or coming back Neville Chamberlain-like, waving no increase in corporation tax in the air, will not cut it at this week's summit. In his state of the nation address the Taoiseach invoked the treaty of 1921 as his model of independence. If he comes back from Brussels with a federal fiscal union then he will be the Taoiseach that will have made Ireland a province once again.
Things are reaching crisis point in Europe and are not all well. The chances of Europe being saved this week are pretty slim but it will probably not be saved this week, this month or next year. It will be an ongoing process. Ms Merkel seems to have different ideas to everyone else, mainly because Germany is in a better state than Europe as a whole. She is in a difficult place with her own people and it is hard for her to be a good German and a good European at the moment. They are all hell bent on trying to get the market on side. Doing this will be difficult unless they give the markets everything they want and the notion that another patch-up job, half Ms Merkel and half Mr. Sarkozy, will fix things means that it will be a compromise. Not many of us believe there will be a solution from this. The markets are unlikely to be completely happy until the ECB becomes a lender of last resort, eurobonds can be issued, which may not be enough to please the markets, or the ECB starts printing money. If I had to bet on it, I think the ECB will eventually print money because there is not another way out of it. I do not think Greece will go back to the markets before 2020 and Ireland will not go back in 2013 or 2014. Our debts are too great and unless Europe is prepared to deal with its impossible debt problems in Ireland, Greece, Spain and Italy, I do not see how it will work out. The figures do not stack up anymore.
Next year, Italy must raise €250 billion to re-finance expiring bond debts. Will the markets buy bonds and at what price? It will not be easy and unless there is a whole change of approach from Europe, either by using the ECB as a lender of last resort or by printing money, I do not see the problem being solved. The notion of fiscal union arose at the Oireachtas Joint Committee on European Union Affairs and I asked the Minister of State, Deputy Creighton, whether she agreed that Ms Merkel was more interested in fiscal union than fiscal discipline at this stage. The Minister of State threw cold water on the idea and said that Ms Merkel was not remotely interested in fiscal union. I beg to differ and if the Germans are to fund the problems of Europe, we must play the game their way. That involves a huge loss of democracy for Ireland. Who will oversee this process if we introduce new rules to oversee how we carry out our financial business in Ireland, Italy or Spain? Who will decide that we are behaving well? Will these be elected people or will it be the European Commission? Will the European Commission become electable? No one wants to see the collapse of the euro, which would not be good for any of us, but neither do we want this country run from Brussels and Frankfurt. This is not what the Irish people want. The Irish people want Ireland run from this Parliament. While Irish people may be content to have European influence and direction, they do not want complete control yet that is what is being threatened. It will not be called fiscal union because there are so many different names one can call something and so many different ways around things. In the end, it will amount to the same thing and it is intolerable for Ireland to go down this road.
The current austerity measures are the opposite of Keynesian policy and Germany wants to inflict them on everyone else so that we meet some of the rules they would like us to meet and so that Europe functions in a manner pleasing to them. I find these rules too draconian and I do not see austerity bringing growth. In his state of the nation address on Sunday night, I could not count the number of times the Taoiseach referred to jobs but I do not believe the budget has created a climate that will create jobs. Austerity cannot do that. So many world economists disagree completely with how Europe is dealing with this and I think we must do a U-turn at some stage. If we want growth and jobs, there must be investment. It is not rocket science. Austerity here may be good for Germany but it is not good for us and if austerity does not bring growth and jobs over the coming years but helps Germany, the Netherlands, Finland and Austria to grow, it will widen the gap and worsen the political problem. The economic thing goes down the Swanee because there are two different groups and the elite group is racing too far ahead of the rest of us. They undermine any chance of a political consensus where we live and work at the same table. This is not working and I plead with the Government not to take the running of Ireland out of this House.
I am delighted to speak on the motion proposed by the Technical Group and I thank Deputy Ross for allowing us to bring this important topic before the House. Deputy Peter Mathews has left the Chamber and there is now not one Fine Gael Deputy in the Chamber. I thank the Tánaiste and his colleagues for attending.
This issue is serious. We must all wear the green jersey. I am a great believer that when we go abroad we are all united and of the one mind. We must be.
I was privileged this morning to watch proceedings here from the RTE studios, where I was commenting on the debate. I was worried because the Tánaiste is not the same Deputy I listened to on the Opposition benches for the last four years, with the body language, the passion and the strong words. There is some mealy mouthing going on, that they know our position on the 12.5% corporation tax rate. That is not what the Tánaiste should say; he should say it is sacrosanct and that they have their own tax schemes, France especially, that are way under 12.5%. I saw the Minister of State, Deputy Creighton, going into the meeting and I wish her well but she needs to wear the green jersey and to stand up and be counted. We must fight for our people.
Other speakers have referred to the fact that we are not getting a fair crack of the whip. We are getting the whip all right but we are not getting fair play. We must stand up, be counted and assert ourselves. I said on that programme this morning that if this does not work out, I see a well-concocted, two-tier Europe coming out of these meetings before meetings and side meetings with these elite people. Deputy Catherine Murphy said we are on the menu, and we are. We are on the afters, the leavings, the scraps. That is not good enough.
We must be proud of our country. We are in trouble and the Government keeps blaming the last Government, and rightly so for a lot of it, but it is time we all stood up and took our position seriously. We cannot accept any diminution of our situation in Ireland. The public will not thank us for it and they will certainly not thank the Tánaiste because he made so many promises. That is his problem. He had such strong language and clever script writers who put it out there what he would do. Hell fire would not be hot enough for the bondholders. He has gone back on so many things that we are worried now that he will cave in on this one. This one is too serious and we cannot cave in.
We are all on the national team and our electors expect us to stand up to Merkel, Sarkozy and Van Rompuy, who will end up like Humpty Dumpty because there will be no wall and no Europe. I should not bring in a children's rhyme but that is what it looks like to have feeble attempts over the last 12 months having these highly publicised meetings and coming up with nothing. There is some engineering ingenuity here and they are creating a situation of desperation so we must have this crisis summit tomorrow and we must sign up. We will get the pickings if we sign up and be good boys.
We have been good boys by crucifying our people with austerity and with this budget. The Taoiseach made a state of the nation address on Sunday night but he would have been better off having a chat with the lads in his local in Castlebar because he might understand more then about the lack of jobs. He mentioned jobs so many times but this budget was anti-jobs and inflationary. The CE schemes were mentioned here this morning and the sooner the Government overturns that decision, the better. The budget was anti-work and anti-jobs, although there were some good points in it and some attempts by the Minister for Public Expenditure and Reform to deal with the public service. I cannot understand why this business has not been dealt with by the IMF and all. I said the other day Croke Park should be scaled back to the Aviva stadium or Fraher Park in Dungarvan or Tralee. It is a monster we cannot afford.
I am not knocking the ordinary public servants. I am knocking the boys at the top, the cosy cartels, the people who are giving the advice today to the Minister of State, Deputy Creighton, and the Taoiseach. They are never at the table but in the next room, and by God they know how to mind themselves.
The Deputy has two minutes.
I thought the Leas-Cheann Comhairle was telling me to finish up.
No, but I was going to remind the Deputy that we are talking about the European summit.
Of course we are, and that is what I am saying. I am trying to address my remarks to the people representing us out there. It is so important that they do the business and assert themselves, that they tell Sarkozy, Merkel and Van Rompuy that we have to be people of our own destination. We have passed treaty after treaty for Europe. We have been good boys. We failed with Lisbon so we did it twice. We must tell them that nothing else will be accepted from austerity and from the lessening of our powers and rights as equals in the 27 member states. It should not be two or three member states. That is my worry, that they are engineering the situation. We have come to such a desperate situation in trying to please and placate the markets and the ECB has been standing idly by while Rome burns. It stood idly by when the reckless lending went on by these countries as well that came into our banks here. When they did not have it themselves, they got it from European banks so they are 50% responsible.
We are in charge of our destiny and must try to bring it back, maintain it and defend the smaller states. When we entered the project in the 1970s, I was only in school and that was the dream and belief we had. We were a proud nation among the other nations, since extended to 27. We are not and we will end up not even getting the afters. I want the Minister of State and the Taoiseach and every Deputy to fight for our dignity, our rights and our democracy, to wear the green jersey with pride and to come home if necessary without signing any treaty. We have experience of what happened with the last treaty back in the troubled times and there are rumours afterwards about what happened.
We are not sending anyone out there to cod them. We are sending the Government out as our representatives of the people of Ireland to make sure we are not trampled on, that we are not walked over and that we on the periphery of Europe are not forgotten about with the Germans in the centre. They played on that in the Second World War so this is the third time around without a bullet. It is being done with pound notes and euro and whatever kind of a new dream currency of German extraction that they might peddle up. We are being sold pups and it is now time our dogs started to bark and make sure we bark loud enough and that we are heard and maintain our rightful position in Europe.
I move amendment No. 1:
To delete all words after "Dáil Éireann" and substitute the following:
"supports the Government in its efforts to secure an agreement at this week's meeting of the European Council that fully protects Irish interests and that contributes to the restoration of stability in the Euro area."
I am pleased to respond on behalf of the Government to the motion which has been tabled by eleven Members of the Technical Group concerning Ireland's position at the meeting of the European Council which will begin in Brussels tonight and which will continue tomorrow.
At the outset, I want to recall that this House had a lengthy and energetic debate on issues arising at today's meeting of the European Council on Wednesday of last week. As we undertook to do in the programme for Government, prior to each European Council meeting, the Taoiseach has briefed this House on what was to happen at the forthcoming EU meeting. This structured debate in this House prior to European Council meetings never happened during previous Dáil sessions. This is one element of the Government's ongoing efforts to improve the way we do our business and most of all to strengthen the role which the Houses of the Oireachtas play in engaging with EU business, which is of critical importance not alone to the European Union but also to this country.
It is in that context that I welcome the opportunity for further discussion of the December European Council here today. I must, however, inform the House that the Government does not accept the motion tabled by the Members from the Technical Group. It displays a fundamental misunderstanding or at any rate a misrepresentation of the European Union and how decisions are reached by the Union, including at the highest level in the European Council. Let me be perfectly clear, Ireland will not be forced into anything at a European Council. The EU works by compromise and accommodation. Decisions are taken at the European Council on the basis of consensus, where every Head of State or Government has the opportunity, and indeed the responsibility, to raise, advocate and defend their vital national interests. That is, of course, exactly what the Taoiseach will be doing in Brussels tonight and tomorrow.
Similarly, the Taoiseach is not in the business of handing over our economic sovereignty — quite the contrary. This Government intends to be the one that retrieves our economic sovereignty, which has been severely diluted by dint of being dependent on funding provided by our EU-IMF programme since the agreement reached by the last Government a year ago. Anything that this Government does will be in the interests of Ireland and the Irish people. On that this House can rest assured.
In view of the inappropriateness of the premise on which the Technical Group's motion is based, the Government will propose an alternative motion to the House, as follows:
That Dail Eireann supports the Government in its efforts to secure an agreement at this week's meeting of the European Council that fully protects Irish interests and that contributes to the restoration of stability in the euro area.
I believe that the Government's motion sends a far more positive and constructive message from this House as the Taoiseach heads into tonight's crucial European Council meeting. It is unfortunate that some in this House are more fixated on what they are against than on what they are for.
The Government amendment addresses that deficit and I ask the Members opposite to agree to the amendment so that the Taoiseach can go into that meeting tonight with the unanimous support of our national Parliament. Members opposite have talked about wearing the green jersey — we all need to wear the green jersey here. Let us not divide the House and let us agree to support the Government's amendment that this House supports the Government and supports the Taoiseach in what he will attempt to do tonight, tomorrow and at the European Council.
Tonight the Taoiseach will join the other EU Heads of State and Government for an informal dinner discussion of the latest developments, in both financial markets and the economic and financial crisis. Leaders will take stock of the very extensive range of measures which have been already agreed at the European level, including the creation of the European Financial Stability Facility, EFSF; agreement on a future permanent mechanism, the European Stability Mechanism, ESM; the decisions concerning budgetary surveillance and co-ordination of economic policies, in addition to an even more extended governance structure for the euro area which were taken by the euro summit on 26 October; and the package of six legislative measures on European economic governance — the so-called "six-pack" -adopted last month.
We should not underestimate what has been already agreed. Similarly, we must now ensure the commitments and undertakings made by each member state are implemented in full and without delay. An important element of our credibility, with the financial markets and with the public, depends on wholehearted implementation. It is on these very considerable foundations that leaders will be agreeing to build a stronger economic union.
As the House will recall, euro area leaders asked President Van Rompuy to prepare an interim report for consideration by the December European Council on possible steps to strengthen economic union, with a particular focus on strengthening economic convergence within the euro area, improving fiscal discipline and deepening economic union, including exploring the possibility of limited treaty changes. Tonight's discussion will be based on that interim report from President Van Rompuy and on draft conclusions prepared on foot of it. The Government has been impressed with the approach taken by President Van Rompuy to this challenging and highly time-constrained task. From the outset, he has approached this, firstly to see what needs to be done and only then how that can best be done, an approach I wholeheartedly support.
Similarly, with respect to tonight's discussion at the European Council, President Van Rompuy has placed a strong and clear emphasis on the strengthening of the short-term crisis-management tools available to Europe and particularly the euro area, as well as acknowledging the need to adopt, over the medium term, measures which will also fortify economic union. As far as we are concerned this is the right way to go.
Ireland is deeply involved in the preparations for the summit. The Taoiseach set out the approach he will take in a letter to President Van Rompuy. In this he highlighted the urgent need for leaders to make — and more importantly to implement — clear decisions to protect the currency and to restore stability to the euro area. This is profoundly in Ireland's interests. He also highlighted our support for stronger rules and more effective governance. Ireland has a strong national interest in a stable currency.
While approaching the meeting with a constructive and open mind, the Taoiseach cautioned against allowing pressure for treaty change to distract us from correcting the immediate situation. In this he suggested that the task before the meeting tonight and tomorrow is twofold — putting in place measures to address the immediate situation and strengthening governance structures within the existing framework to the extent possible. The Taoiseach will be reminding colleagues of the efforts the Irish people are making to ensure our economic recovery and will highlight the particular burden we are shouldering in regard to banking. He will explain why we are looking for the support of our partners in ensuring our debt is sustainable.
Senior Irish officials are also involved in intensive consultations with partners in Brussels on the basis of President Van Rompuy's interim report, a draft of which was made available to the Government on Tuesday. Similarly, we received a copy of the promised Franco-German proposals just yesterday. Both these documents are now being digested. We have had to assess, in great detail, the possible economic, legal and political implications for Ireland and for the Union of the various options, proposals and ideas. That intensive work of analysis is continuing today. In parallel, work is ongoing in Brussels among member states in identifying elements that might form part of the conclusions the European Council will adopt on Friday.
Members are well aware that the situation in the euro area remains of serious concern, while financial markets remain highly volatile. It is critical that, when EU Heads of State and Government meet in Brussels tonight, they make and implement clear decisions quickly, to demonstrate our collective rock solid determination to protect our currency; to support member states that are working towards economic recovery; and to introduce strong rules to ensure fiscal discipline.
Ireland has consistently argued, and will continue to argue, that the top priority must go to answering the immediate crisis in the euro area. Firm and decisive action will provide us with the breathing room required to put in place new strengthened structures which put our economic union on a similarly solid footing to our monetary union. EMU, Economic and Monetary Union, was never intended to be just about a shared currency. It was always also about ensuring that shared currency was appropriately underpinned by economic and monetary policies. We have seen, to our cost in the euro area that the Stability and Growth Pact, which was intended to ensure a shared policy approach across all member states using the currency, lacked the teeth to get the job done. We must now learn from that experience.
The stability of our common currency, the euro, is of critical importance to Ireland and to our people. We are not disinterested bystanders when it comes to the future of our currency. This is a case where Ireland has a vital national interest which we will pursue and defend. Our priority in this instance is to find a credible and durable solution to the immediate crisis. Central to this will be to demonstrate clearly that we have the financial firepower necessary to stabilise the situation. This could come from the ECB playing a stronger role; however other possibilities and mechanisms are feasible. It is the ends rather than the means which are critical at this stage.
It is worth repeating that the defence of the euro is in Ireland's vital national interest. It is the vital national interest of every man, woman and child in this State. The euro is a strong currency that is respected and accepted around the world. Without the euro, the economic and financial challenges we face would be considerably greater than they are already. The inescapable reality is that Ireland's prospects are inextricably linked to those of the euro and we need to support whatever measures are necessary to sustain it.
When Ireland joined the process of Economic and Monetary Union which led to the creation of the euro, most of us hoped we had seen the end of the boom and bust cycles which were a feature of Ireland in the 1970s and 1980s. We expected, and were entitled to expect, that the treaty obligations which came with the euro would lead to prudent economic management and a stable economy. Instead, unregulated access to the cheap money and the mistaken incentives introduced by the previous Government created a property bubble of such magnitude that, when it burst, propelled our nation into the hands of the receivers. The Government is determined to regain fullest possible Irish sovereignty over our economic governance, consistent with membership of the eurozone, and to ensure that the kind of economic mismanagement which forfeited our economic independence, can never again be revisited on the Irish people.
There is a gathering consensus among eurozone governments, markets and commentators that confidence in the euro can be restored only by measures to ensure that in the future, members of the eurozone meet their obligations on economic management and budgetary discipline. The Government shares this view and is ready to take on such responsibilities. Such measures should be welcome to every citizen of this State who is today trying to come to terms with the service cuts and tax rises which the Government has been obliged to introduce to pay for past failures of management and supervision in this country.
Ireland has nothing to fear from strengthened economic governance — in fact, we are now paying the price for the absence of such rules and their implementation in the past. The current crisis has made it abundantly clear to all reasonable observers that there is great scope for spill-over effects, particularly between countries that share a common currency. This is not a hypothetical threat, it is the reality in the euro area now. The Government already intends to put new rules on responsible budgeting into domestic legislation in the first quarter of next year. These rules will go beyond many of those being envisaged at European level.
I want to address head-on the possibility of treaty change. As part of President Van Rompuy's mandate in bringing forward an interim report to this meeting, he was asked to examine the possibility of limited treaty changes. That issue is on the table. We, however, have consistently argued that the first step is to stretch the existing treaties to the limit and to do as much as we possibly can within the strictures of the rule book already in place. We have maintained that position for good reason. To launch a process of treaty change risks a lengthy and uncertain process.
As I said earlier, we have been firmly focused on ensuring that we find solutions now to the very serious situation which faces our currency. The existing treaties provide us with scope to go further. We should, before setting about a longer term exercise of seeking to amend the treaties, avail of that possibility. These efforts should go hand in hand with those intended to put in place the kind of structures that will serve us over the medium to longer term. It should be well understood in this House that the Government is open to looking at all reasonable proposals to reinforce economic governance and, in the process, protect and defend the stability of our currency. If it is in Ireland's interest, we will consider any serious proposal. The Taoiseach will engage positively on behalf of Ireland in these debates at the European Council tonight and tomorrow.
One of the major issues to be debated by Heads of State and Government in Brussels will be precisely how best to ensure that the obligations assumed by eurozone members are fully implemented and rigorously overseen. There are those who believe that if the arrangements are to be sufficiently robust then treaty change will be required. It is safe to say that no one around the European Council table wants treaty change for the sake of it, but I expect a determination that whatever it takes to sustain the euro will be done. It may be that whatever measures are to be introduced will be done on a phased basis.
The simplest and most immediate response would be to exploit the full potential of the existing treaties. President Van Rompuy, who was asked to bring forward an interim report to the European Council, has set out a number of possibilities of doing just that. He has also identified other options which would involve amending the treaty. Chancellor Merkel and President Sarkozy have expressed a clear preference for treaty change. Heads of State and Government will have to arrive at a conclusion that is guaranteed to restore confidence in the euro, domestically and internationally, not least in financial markets. They cannot afford to fall short of expectations and they must be prepared to do whatever it takes, regardless of the inconvenience. In certain circumstances, that may involve treaty change. If, despite the concerns of many in Irish politics we nevertheless find ourselves obliged to have another referendum in this country on the EU treaties, then so be it. If that is what we have to do to save our currency, to restore our economy, to be able as a sovereign nation to borrow again on the financial markets and to ensure that no future government can ever again bring us to such a sorry state, then let us not be afraid to put that choice to the Irish people.
There are no easy alternatives, regardless of what the Opposition and some political commentators might suggest. Yes we want to be ourselves again, to regain control of our own affairs and we will if this Government has anything to do with it. To be alone in our current circumstances would be a very cold, lonely and penurious place to be. It is clear also that treaty change cannot be achieved overnight. There are processes set out in the treaties that have to be followed, for good reasons. Of real importance to Ireland also is to ensure that the integrity of the European Union, at the level of 27 member states, is maintained. This view is not born out of some starry-eyed sense of Europe or the European Union. One of the cornerstones of the EU — I would argue one of its most significant achievements — the Single Market of 500 million people, which is by far the biggest market for our traded goods and services, must not be allowed to be compromised or undermined. Our strength as a Union comes from our unity and solidarity among all 27 member states.
Similarly, Ireland remains a steadfast supporter of the Community method and a leading role for the European Commission. As a smaller member state, it is undoubtedly in our interest to have an active and strong Commission as guardian of the treaties to ensure with impartiality that the rules are followed by all member states at all times, regardless of whether big or small or from north or south. The answers which the European Council finds to the very real threats posed to our currency and to the type of Union which we will continue to have must ensure that the fundamental principles of political accountability and democratic legitimacy are cherished and respected.
As well as addressing the various issues surrounding the euro area, the December European Council will also return to the question of growth enhancing measures which it previously considered in October. It is expected to endorse an initiative to fast track a range of measures aimed at boosting growth and job creation. This is very welcome and the Taoiseach will be strongly supporting these moves. Progress in meeting the commitments entered into by the 23 member states, including Ireland, taking part in the euro plus pact will be considered by leaders at this meeting.
Enlargement of the Union will be discussed by Heads of State and Government tomorrow and it is expected an extensive set of conclusions will be endorsed. On the margins of this European Council, the Taoiseach, with other EU leaders, will tomorrow morning sign Croatia's Accession Treaty to the EU. I warmly congratulate Croatia on this achievement and look forward to them joining the EU as a full member on 1 July 2013. The question of Bulgarian and Romanian accession to the Schengen Area is also expected to arise, as will international issues, including Iran. Leaders will finally adopt a brief set of conclusions which will take stock of progress concerning negotiations on the next multi-annual financial framework.
As the Taoiseach told this House last week, the Government is committed to working for an outcome from this week's European Council that fully protects Irish interests and that can restore stability to the euro area. That was the case then and it remains the case as the Taoiseach travels to Brussels for tonight's meeting. I wish him every success in this important endeavour and ask that the House, by agreeing the counter motion proposed by Government, support him in working for Ireland's national interest and for stability in the eurozone.
I understand Deputy Áine Collins is also sharing time with the Tánaiste. I draw the Minister of State' attention to the fact that there are ten minutes remaining.
On a point of order, Standing Order 53 states that an amendment to a motion cannot be a direct negative of that motion. I believe the Government's amendment is a direct negative of the motion tabled by Deputy Ross on behalf of the Technical Group. I ask that the Leas-Cheann Comhairle, in line with Standing Order 53, rule the Government's amendment out of order.
My only function in this matter is to call on the Tánaiste to move the amendment.
The Chair must implement Standing Orders.
I understand that.
Standing Order 53 clearly states that an amendment cannot be a direct negative of a motion.
Deputy Ross moved the motion. It is normal practice for another person to move an amendment to a motion. It is normal for the Government to move an amendment to a Private Members' motion.
The amendment cannot be a direct negative of the motion. Standing Order 53 clearly states that the amendment must speak to the motion.
It is not a direct negative: it is a restatement.
My information is that the amendment is not a direct negative of the motion.
Any reading of it would indicate it is.
The Government is entitled to move its amendment, as is normal practice every week in response to a Private Members' motion.
An amendment can only be moved in line with Standing Orders.
It is in line with Standing Orders.
It is in line with Standing Orders. We are running out of time. I call the Minister of State, Deputy O'Sullivan, followed by Deputy Áine Collins.
I thank the Tánaiste for sharing time and for allowing me the opportunity to respond to the Technical Group's motion and to speak to the Government's amendment.
I reiterate the Tánaiste's call for this House to unite behind the Taoiseach as he puts on the green jersey to represent citizens of Ireland at this important summit. I note that an amendment has also been tabled by Fianna Fáil and other members of the Technical Group. This is the time to unite behind the Taoiseach who will be negotiating on behalf of the Government and Irish citizens.
I welcome the opportunity to debate issues related to the European Union. In the past nine months there have been many more such debates. This is to be welcomed as it is a positive development. The work of the European Union affects the lives of people in Ireland daily, whether through the provision of continued support for rural communities, the Common Agricultural Policy or the provision of support for high-end innovation and research and development initiatives. Moreover, the European Union has helped Ireland to provide educational opportunities for its citizens for many decades. It also provides Ireland with access to a vast market of 500 million people. For a small, open trading nation that depends for its living on interacting with the outside world, the ability to access 500 million people through the internal market is critical to Ireland's present and, more importantly, its future to assist its return to economic security and growth.
These are but a few of the real-life aspects of the European Union that should also be recalled and reflected on when some in this House speak about Ireland being forced to do things within the Union. That patently is not the case, nor will it ever be. It is simply not that kind of union. I could have mentioned other aspects such as the open skies across Europe policy that has seen an explosion in the availability of low-cost air travel, of which Irish people avail in large numbers. I could have mentioned the reduction in mobile phone roaming charges delivered by the Union or perhaps the support Ireland has received to protect its environment or the development and codification of Irish people's rights as workers, women and citizens of Europe. The European Union is important to us.
It is unfortunate that this debate is on a motion tabled by the Technical Group that appears to depict the European Union as the other, when, in fact, it is us: Ireland and its people. I reject absolutely the depiction by Deputy Mattie McGrath that somehow or other this motion pertains to a bunch of people who are telling us what to do. Ireland is an integral part of the European Union. While meetings take place in Brussels for the most part, that does not mean the debates that take place or the decisions reached are not ours — they most certainly are. At each meeting Ireland is represented either at official or ministerial level or, in the case of the European Council, at the level of Head of State or Government. The Taoiseach will be in Brussels this evening to represent Ireland at the critical meeting of European Union leaders. He will be there to represent Ireland's interests and, in so doing, co-operate with his colleagues and peers with a view to finding credible and lasting solutions to the very real threat posed to the stability of the common currency. He is working to ensure an outcome that will be good for Ireland and the European Union.
We find ourselves in the midst of a severe economic and financial crisis which has engulfed the European Union. It is only through continued close co-operation with our EU partners that we will manage to find a way through the crisis. The Government has been consistent in stating what is most needed to emerge from the European Council meeting tomorrow is a credible solution to the urgent crisis facing us. This is absolutely critical. In the longer term, Ireland, in common with the rest of the European Union and the euro area, has a pressing interest in ensuring the necessary measures are put in place to strengthen economic union. We do not seek to strengthen it for its own sake, as it is a means to an end. Increased discipline and enforcement consistent with the principles of democratic accountability and legitimacy would be good for Ireland. One must ensure negative spillover effects from one euro area member state do not have an impact on all the others. We should have nothing to fear from the codification and implementation of a clear set of rules to be implemented by all. Ireland plays by the rules and wishes to ensure others do too.
I am confident that what will emerge from the European Council meeting will set the European Union and the euro area on a path by which we can move ahead and stay ahead of the current crisis. That is what the Taoiseach is working towards at this important summit. Consequently, I am happy to support the Government's amendment, as moved by the Tánaiste, that Dáil Éireann "supports the Government in its efforts to secure an agreement at this week's meeting of the European Council that fully protects Irish interests and that contributes to the restoration of stability in the euro area".
I welcome the opportunity to speak to the motion and pass on my best wishes to the Taoiseach in his endeavours to save Ireland's future. I remind the Technical Group that since Ireland's decision to enter what was then the European Economic Community in 1972, each change in our contract of relationship within the Union has been ratified by treaty. Moreover, each treaty change has been ratified by the Government and changes to the existing treaties can only be made either within the parameters of the existing treaties or with the agreement of the people as expressed in a referendum. There never has been, nor can there ever be, use of force and the use of such language is scaremongering.
The issue for discussion at the European summit pertains to the European leaders coming together to work out a solution to calm the fears of financial markets. We need political leadership now more than ever to ensure the stability of the euro and secure Ireland's future. Ireland has been taking part in fiscal co-operation with its partners in Europe for some time. When it signed the Maastricht treaty in 1992, we entered into Economic and Monetary Union, EMU. I remind the Technical Group that the Maastricht treaty was not forced on the people. They voted in favour of it with a majority of 68.7%. The Treaty of Maastricht led to the creation of the euro and by adopting the euro as its currency Ireland agreed to the criteria laid down under the treaty which had a direct bearing on fiscal matters.
In addition, we have an existing fiscal relationship under the Stability and Growth Pact. This is a rule-based framework for the co-ordination of national fiscal policies within EMU. The purpose of the pact was to ensure fiscal discipline would be maintained and enforced within EMU and the real problem is that this did not happen. Warnings given were ignored and available sanctions were not implemented. The former Fianna Fáil Minister for Finance, Charlie McCreevy, ignored warnings from both the European Commission and the European Central Bank with regard to his 2001 giveaway budget which was aimed at nothing more than buying victory for Fianna Fáil in the general election that took place the following year. Perhaps had the Government listened then to the warnings given by its European colleagues all those years ago, we would not now be in this mess. Instead, it opted to introduce a series of budgets that can only be likened to reckless drunken spending.
Other member states have also been in breach of the Stability and Growth Pact, including Germany and France; consequently, closer monitoring and surveillance should not be perceived as a threat. It would, in fact, prevent governments from spending recklessly before elections or at other times. The need to have some checks and balances is crucial. A method whereby someone could shout "stop" is needed, given the manner in which the finances of this country were so badly managed in recent years. We are now paying the price for a lack of regulation. Some fiscal oversight rules must be implemented and they must be enforced to prevent a recurrence of the crippling problems besetting the eurozone.
I wish to share time with Deputies Timmy Dooley and Bily Kelleher.
I welcome the opportunity provided by the Technical Group to debate this issue. While the Tánaiste referred to last week's debate, things have changed again since. The proposals submitted by President Van Rompuy who has been virtually anonymous during the crisis and by President Sarkozy and Chancellor Merkel have completely changed the dynamic. Once again, our corporation tax rate, the foundation of much of our industrial policy, is under attack. The investors who are considering locating in Ireland are thinking to themselves, "here we go again." It is welcome that the Tánaiste has been so straight in saying this issue is not on the table and not a matter for negotiation, but he might also tell this to President Sarkozy. Every time something arises, he returns to this issue, as though he is trying to take 1,000 cuts at it in the hope he will cause its destruction. Will someone explain to him that the majority of the jobs attracted to Ireland on the basis of its corporation tax rate and everything else it offers would not be created in Europe otherwise and would be lost to the European Union? For someone who is perceived to be interested in job creation in the European Union, although I suspect this proposal has more to do with his own job than any other, this is a message that must be hammered home to him.
The Tánaiste and, to a certain extent, the Minister of State, Deputy Jan O'Sullivan, were trying to induce the House not to divide on the issue as it would weaken Ireland's case. Of course, all Members wish the Taoiseach well and want him to bring home a deal. However, one cannot ignore the fact that the European institutions and the European Central Bank, in particular, have completely failed to deal with the crisis. The summit tomorrow will be the 14th to deal with it. The ECB is refusing to adopt its wider economic role. It should not be focused only on inflation but job creation and economic growth generally. Under the leadership of Mr. Jean-Claude Trichet in particular, it was obsessed with inflation and drove many countries into the situation in which they are in today by refusing to become the lender of last of last resort in the manner in which other central banks did. What we need out of this process is for it to take on that role.
I welcome that the new President of the ECB, Mr. Mario Draghi, seems to be bringing in some changes and making the ECB more relevant to people's life. I hope the banks will pass on the interest rate decrease that is expected today. The Government needs to push for the ECB to take on a far greater social role than it currently takes and to take a far greater role in the development of the economy of Europe and not only for it to have an obsession around inflation to the detriment of many of the smaller countries.
Clearly, what is proposed by the German Chancellor and the French President is not in Ireland's best interests. We all welcome and look forward to the proposals the Government will bring forward on economic supervision and that is needed, but the other measures they have come up with are not in our self-interest. We joined a Community of equals in 1973 and we re-affirmed and maintained our commitment to that in several referenda since then. That is the reason we are a member state of the Union. I would nearly put my week's wages on betting there will not be an agreement tomorrow. That is the problem. We have been brought to the levee many times with talk of an upcoming summit being the big summit, the one where we will get an agreement that will sort out the markets but then nothing happens. This was supposed to be happen in July, October, September and it is supposed to happen tomorrow. That leads to rumours such as those being floated around this morning that the Central Bank is printing punts, which it has denied. That collapse and failure of political leadership at European level had led to rumours which have driven the markets to where they are at, and that is what must be stopped tomorrow.
The leaders should be kept negotiating, even if they have to stay there for a few days, to get a deal, one that works for Ireland and one where we can once and for all scrap the arguments put forward by those who are trying to take up the issue of our corporation tax rate.
I welcome this opportunity to speak on the motion. I wish the Taoiseach and others success in negotiating at the summit to protect what is in the best interests of Ireland and, more importantly, what is in the best interests of the European ethos, which is an ethos of a community of small and large states coming together in a manner that recognises their differences but works for a community approach in developing and enhancing the lives of citizens throughout the European Union.
I am disappointed with the European Commission. It has been a failed entity in recent years in that it has been simply sidelined. The President of the Commission has been sidelined and the Commission is effectual, incapable and, more importantly, it is not even assuming the role of guarantor of the treaties we entered into in the context of the Treaty of Rome and the other treaties up to the most recent one that was passed. The Commission is the guarantor of those treaties. It has fundamentally failed to address that serious deficit that is now at the heart of Europe in the context of the Franco-German alliance of Chancellor Merkel and President Sarkozy in promoting their own national interests above and beyond the interests of the Community. That is a serious matter and it goes to the heart of what the European Union is about. The Taoiseach must defend the interests of the Irish people at the summit but often the interests involved are intertwined. Clearly, the European Commission has been pushed to one side, the French President and the German Chancellor have decided to implement their own national agendas in view of elections coming down the track and that is very much jeopardising what is happening to the European Union.
It is unfortunate that we have a time slot of only five minutes for these contributions because I would like to elaborate substantially on the matter of the European Central Bank. It is independent in its nature and cannot be interfered with. Under its charter and establishment under the various treaties, there is an onus on it to take into account social and economic issues over and beyond the narrow approach of just monitoring inflation. The European Central Bank, without any treaty change, has a duty and a fundamental obligation to look at the broader picture rather than only inflationary figures that are the obsession of the German Chancellor.
In discussions on these issues, the European Union and in particular President Sarkozy have become obsessed to a certain degree with the issue of corporation tax. Divergence within a community is a positive development in the sense that it creates competition and innovation in the broader sense. The European Union should strive for the Union to be competitive as a whole and for countries to compete with each other in the interests of all our citizens rather than some countries having a narrow defined focus on what is in their interests. This debate is about making sure the euro survives first and foremost to ensure there is no cataclysmic meltdown of the broader European economy and that there will be some transfer not of powers but of oversight. The oversight failures of the European Union and national governments have caused every citizen pain. While people would blame the previous Irish Government for a lack of oversight, there was a lack of oversight at the heart of Europe in the context of the European Central Bank allowing cheap money to be sloshed around economies that were in an inflationary mode. That was a failure of governance and oversight by the organisation now lecturing us.
I welcome the opportunity to contribute to this debate but it is unfortunate that we do not have more time to contribute to it. The crisis that has enveloped Europe during the past year or year and a half should require and demand a much greater level of scrutiny and discussion in this House in particular. We talk a good deal about the necessity to remain engaged with Europe but we become somewhat reticent when it comes to discussion in this House. The fact that the House is almost empty for this debate is a sign that people do not engage to the extent that they should.
On this side of the House we believe that the focus on greater budgetary control will solve the debt crisis. While we support stronger fiscal rules, this is not the answer to the immediate problem of restoring market confidence. We certainly believe that the ECB must intervene immediately to become a lender of last resort and that this can be done without changes to the EU treaties. The list of measures which France and Germany have put forward this week, and will put forward at the EU Summit, are flawed and would cause great damage to Ireland and Europe if implemented. There needs to be solidarity and each member state must be treated equally. Ireland's corporation tax rate must be protected at all costs. I have heard much comment from the Taoiseach and the Tánaiste in recent days which seems to suggest that they are fully behind a motion passed in this House to ensure our corporate tax rate is protected at all costs, recognising that it is a fundamental aspect of our capacity to attract foreign direct investment to this country. Notwithstanding that, everything that is emanating from President Sarkozy is clearly aimed at undermining the tax policies of other member states.
There has been the dog and pony show between France and Germany in recent months where, clearly, President Sarkozy has sought to encourage the Germans to move in terms of where the ECB stands, in terms of eurobonds and in terms of Germany coming in to support French banks in regard to the significant losses they have to undertake. From Chancellor Merkel's perspective, bringing President Sarkozy on board has raised expectations that he will get his way on other issues. That is the reason I am extremely concerned that the Taoiseach appears to be driving headlong into a deal that is effectively an abdication of the responsibility of not only the Commission but the entire architecture of the European Union. We have seen the architecture that has been put together, through various treaties and negotiations by all member states, sidelined in the past 12 months. The ongoing bilateral arrangement taking place on a weekly basis is almost like a soap opera. We see the latest episode of the "Merkozy" soap opera taking place on a weekly basis. It is nauseating to people who believe in the principle of a Community. There is nothing of a community involved in what is no longer a sideshow but the engine that is driving Europe at present. I am disappointed by the role of the Irish Government in this. We had the spectacle of the Taoiseach, prior to the election when he was leader of the Opposition, jumping on a plane to Berlin for a photo opportunity with the Chancellor, which looked good and sought to convince the Irish people that somehow we would be connected if we elected Fine Gael.
We got a number of good changes since then.
We did. We got changes that were going to be made for other member states anyway. With the greatest of respect, the Government was negotiating at a particular level——
We got changes that you could not get.
You woke up one morning and got a deal in the post that you could not believe because other member states were negotiating it.
That is not true.
You know the facts.
It was one you said we could not get.
You were negotiating a particular interest rate that was surpassed by the efforts of others because it was being done on a broader level.
The Deputy's time is up.
You have sought to dress this up——
Thank you Deputy. You are eating into other people's time.
——and we will run with you. My central point is that the Irish Government needs to engage more fully——
The Irish Government is fully engaged.
This is not about photo opportunities or being seen going in and out of meetings and looking good on the red carpet.
We got a much better deal than you ever got.
This is not the Oscars; it is a community that requires a much better level of engagement and the Government has failed utterly in this regard.
I call on Deputy Adams and I understand he will share time with Deputies Mac Lochlainn and Mathews.
Ba mhaith liom tacú leis an rún. I thank the Technical Group for tabling the motion. Sinn Féin has seen the document detailing the European Council's package of measures to be presented to EU leaders in Brussels tonight. It is amazing that I, as leader of an Opposition party, must bring the document to the Dáil. The Taoiseach refused to share the Van Rompuy proposals with the Opposition. The document contains a number of significant treaty changes aimed at imposing austerity on EU member states. It also includes proposals for forcing member states to enshrine the same golden rules of austerity in member state law. What we saw yesterday could become law.
The proposals also seek to give the European Commission and the euro group far-reaching powers to interfere with state budgets. They want to take decision making on crucial areas of economic and fiscal policy from democratically elected politicians and hand them to unelected eurocrats in Brussels. These proposals are bad for the Irish people and for people throughout the European Union. They will plunge us all into not just a few years but a decade or decades of stagnation. The proposals are bad for our economy and for our democracy — or what passes as democracy.
The proposals include a prohibition on any burden sharing aimed at reducing the unsustainable levels of debt held by countries such as this State. This week the Taoiseach ruled out a debate I have called for on four occasions since the French President and German Chancellor came forward with their proposals and it emerged the Government had sight of the Van Rompuy proposals.
There is much talk about political reform and transparency but leaving everything else aside, this is no way to deal with negotiations as serious as these. It is reflective of the arrogant way the Government treats the Dáil. An bhfuil cóip de na moltaí ag na Teachtaí Dála Rialtais? Have Government Deputies seen these proposals? Munar bhfuil, cén fáth nach bhfuil? Why are we being kept in the dark? Why are Government and Opposition Deputies with a mandate not being shown these? Tá cearta ag gach duine a chaitheann vóta anseo, mar aon leis an Fhreasúra, moltaí Van Rompuy a fheiceáil anois. The other problem is that the Taoiseach supports these proposals. He has made clear that he is in favour of enforceable conditions and stronger governance for the European Union and the eurozone. This is a major mistake.
Is léir ó na moltaí seo go bhfuil deireadh le haon chumhacht fhioscach á mholadh, rud a théann i bhfad níos faide ná leasuithe teoranta ar an chonradh. Bhí an Taoiseach mar cheannire ar Fhine Gael agus mar bhall den EPP a thugann le chéile páirtithe eile cosúil lena pháirtí féin trasna na hEorpa. Aontaíonn an Rialtas gur cheart tuilleadh lárú a dhéanamh ar an AE.
I Meán Fómhair 2009 d'iarr an Taoiseach agus an Tánaiste ar dhaoine vótáil ar son chonradh Liospóin le tuilleadh cumhacht fhioscach a thabhairt don AE. Anois, áfach, níl an Taoiseach ansin mar cheannaire Fhine Gael nó mar bhall den EPP, tá sé ann le seasamh ar son chearta na nÉireannach.
The reality is that what is being proposed outside of the document goes far beyond limited treaty change. It clearly involves the loss of any remaining fiscal powers. Last night it was announced the French President and German Chancellor propose a new framework with the goal of creating a common tax base which would see the end of our corporation tax rate. This could be a negotiating ploy and no more than a ruse. Whatever the truth, it is time for the Government and its Teachtaí Dála to face the truth and facts.
The EU and the French and German Governments want a stronger centralised fiscal union which requires the Government to give away more of our economic sovereignty. The Government seems to be sleepwalking into this proposition and in my view this is because it agrees with it. The question put by the strong states must be answered with a very firm "No". This is the only legitimate position the Taoiseach can take. It is also a position which in my opinion is favoured by citizens throughout the European Union as well as Irish citizens because progressive citizens from all political backgrounds are concerned at the loss of their rights. As was stated earlier, the Taoiseach needs to put on the green jersey.
Sinn Féin is the only party which has been consistent in our position on successive EU referendums. The Labour Party in the form of its various manifestations from Sinn Féin, Official Sinn Féin, Sinn Féin The Workers Party, The Worker's Party, New Agenda — I forget the other various titles——
Democratic Left.
The Labour Party.
I thank the Deputies. One leader of some of these factions has split every party of which he was a member and put to rest some of these parties forever and a day.
All of these latest developments show that what Sinn Féin warned against has come to pass. We argued that the Single European Act and the Maastricht, Amsterdam and Nice treaties were all steps in the transformation of an economic community of independent states into one big European state. An é go bhfuil an Rialtas tar éis glacadh leis nach dtabharfaidh sé cead do dhaoine a vótaí a chaitheamh i reifreann anseo san athbhliain?
Not only have some parties in this and previous Governments taken the wrong position on referendums and disregarded the outcome of some of them, but now the Government refuses to make it clear there will be a referendum. There should be a referendum. Why is the Government afraid of citizens having their rights?
We are for Europe.
Europe is bigger than the European Union, but we are for a Europe of equals. We are for co-operation and a different type of European Union. One of our objections was the fundamentally undemocratic nature of the Union that has been evolving. The behaviour of the French and German leaders in recent weeks has demonstrated this very clearly.
My party leader has just held up a synopsis of the package that will go before the European leaders, but it is quite incredible that we must obtain these reports through newspaper leaks. That is what our Parliament has been reduced to. Some of the most critically important decisions which impact on our State, including the further transfer of economic sovereignty to others who are not accountable to our people, must be accessed through newspaper leaks. That is what is happening here today and it is what we have been reduced to. We are seeing an attempt to bypass democracy and deny the Irish people a say in this matter. On two occasions the Irish people have rejected propositions put to them in referenda, which were endorsed by Fine Gael, Labour, Fianna Fáil and a plethora of their friends in business and civil society. The people rejected them but were not allowed to say "No", so the propositions were put before them again. The most recent episode was the Lisbon treaty, when the people were promised jobs and prosperity. They were promised the sun, moon and stars if they would only change their minds.
One of the issues that Sinn Féin warned about was article 26 with the passarelle or escalator clause, which would allow governments in future to amend treaties without recourse of the Irish people. They could then make profound decisions without having to come back to the people. Sinn Féin warned about that but we were told that we were scare-mongers. We now know that Mr. Van Rompuy is putting that exact proposition to our leaders in the coming days. Will they bypass the will of the Irish people? Will our Government transfer more of our economic sovereignty to those who have failed us?
Let us be very clear about this matter. In the late 1990s, the Irish economy was moving in the right direction. We could see the beginnings of what would have been a genuine Celtic tiger. Investment in education was starting to provide a return, exports were growing and it was an exciting time. We then entered the eurozone and our banks were fed with a river of credit from other European banking institutions. Twinned with a dramatic reduction in interest rates, it was like crack cocaine. It created a massive bubble in our economy whereby people could access credit without an difficulty and the housing sector was exploding. This pressed up wage demands creating all sorts of crazy difficulties and we ended up with a perfect storm.
There is a collective responsibility at European level for what went wrong in private banking institutions in Ireland. We have been asked to shoulder that burden. Seven times in a row there have been fiscal adjustments that delivered unbelievable hardship to our people. What will the Government do? It will reward the very people who created this mess, giving them even more powers without recourse to the Irish people. If the Taoiseach comes back this weekend having agreed to an amendment of the Lisbon treaty that concedes more of our economic sovereignty, then shame on him and his Ministers. If they betray the Irish people this weekend, then shame on them if they stand on the 100th anniversary of the 1916 Rising outside the GPO and claim to be the inheritors of that tradition.
I thank the Technical Group and Sinn Féin for their generosity in affording me four minutes to speak. On Monday and Tuesday, we had our budget speeches. That budget was constrained by the troika agreement we signed up to at the end of November last year. Even though the moment has passed, the opportunity is still there to underscore for the benefit of our EU partners, both in and outside the eurozone, that our budget was framed under a cosh. Our Ministers did the best they could, but the cosh was not identified. We now have an imperative to encourage our Taoiseach, at his business dinner tonight and the meeting tomorrow, to say verbally and in letters writ large that our economy has been saddled with at least €75 billion of debt that should not be there. We need a restructuring, a write-down or a deferment of that debt into the distance so that it does not bring unnecessary austerity on our people.
In Europe at the moment there is a crisis that is not really of fiscal origin, although that is what the newspapers tell us. It is a financially-based crisis. It goes beyond the eurozone and moves in and out of the dollar and sterling, just as it does with the euro. For almost two decades the lack of controls, governance and proper, principled financial behaviour ran riot. On the Reuters' website today, there is an article referring to the hypothecation derivative credit that is off the balance sheet and created by some of the biggest banks in the world. Because of the contraction of liquidity at the moment, six central banks met a week ago yesterday to ensure that liquidity would be provided wherever it was needed. As a result of the liquidity contraction in recent days, the hypothecation derivative business, which is highly geared and is like operating on a margin, adds to an already huge crisis.
More than two and a half years ago, Mr. Greg Pytel, an economist and mathematician based at the London School of Economics, wrote a prescient article. He said that the pyramid created in derivative credit around the world was so big it was immeasurable because it is off the balance sheet.
If the EU summit meeting today and tomorrow does not deal with providing the necessary funds, we will have a really big problem. We must ensure that the message comes from our Taoiseach, and the other 165 Members of this House, that such a decision is imperative and cannot be ignored.
Too much discussion is a bad thing. The League of Nations discussed a phoney war for years. Phoney means voices all the time. The war broke out in 1939 and three men with action plans — Roosevelt, Churchill and Stalin — solved it with no advisers.
I wish to share time with Deputies John Paul Phelan, Gerald Nash, Seán Conlan, Alex White, Patrick O'Donovan, Eamonn Maloney, Eoghan Murphy and Paschal Donohoe.
Is that agreed? Agreed.
It is essential that European leaders make and implement clear decisions quickly to prove our shared determination to protect our currency, support member states that are working towards economic recovery, and introduce strong rules to ensure fiscal discipline. Those are the words of the Taoiseach. A philosophical debate needs to take place within this House about the nature of our membership of the European Union. We either have an inter-governmental model or an inter-institutional or community method based model. The question the Opposition must ask itself if it proposes a strong inter-governmental model, is if it will be based on one country with one vote or a qualified majority vote mechanism.
Notwithstanding the current economic morass in which we find ourselves, since 1972 Ireland traditionally has always done much better through a community method. It is through strong inter-institutional links, a strong European Parliament and smaller member states binding together that we can act as a contrary force to the weight of the larger countries. If we implement a raw inter-governmental model, the "Merkozy" effect will always continue to hold sway. We must have a qualitative debate about what membership entails, and this must be based not just on short-term political gain by certain parties in the House but in a proper discussion of membership.
I do not see how a position can be reconciled where a party believes a referendum must be put on membership but it also argues that the powers of the ECB should be extended to cover more than its remit with regard to inflation. The premise of the belief is that the referendum would be supported as it would expand the powers of the ECB. The Sinn Féin Party must grapple with that idea. Nobody should come to the House to talk about such wide issues as the loss of economic sovereignty without spelling out in detail what that means. There is a bit of a Tadhg an dá thaobh approach from Sinn Féin on the matter, and its position is fundamentally contradictory.
I compliment the Technical Group for putting down this motion and I listened to most of the contributions earlier. I used to find myself agreeing much of the time with Deputy Ross when we were both in another place, and I share his view on most of the points he raised. The Minister of State, Deputy Sherlock, has outlined the position quite clearly.
There are two issues being discussed in the Chamber, including the nature of our relationship with the European Union. We need a full discussion on the shape of that relationship into the future. We also a need, over this weekend and in the coming weeks, to bring some sort of resolution and certainty to the difficulties which surround the single currency at present. That is why this weekend's discussions are vital.
I oppose any moves that would lead towards fiscal union and surrendering the right of any Irish Government to set its own rates of taxation. I know I do not contradict Government policy because the Taoiseach and the Tánaiste, in an earlier strong contribution, outlined the Government's view on that position. As part of any potential agreement that might emerge, we will see increased co-operation between the member states of the eurozone, and we should have a full discussion at the earliest possible opportunity on that.
With regard to our relationship with the European Union, I agree with Deputy Ross and others — including Deputy Adams, with whom I do not often agree — on what has developed in the past 12 or 18 months. The French President and German Chancellor have had private meetings which almost dictate the direction of the European Union. That is not the Union to which I or the majority of Irish people want to belong. There must be consideration of such actions, and Ireland is one of 27 states. The European Union which the Irish people want to develop into the future is one of co-operation rather than directives from the most powerful member states within that Union.
Some of the earlier contributions were interesting. Deputy Mattie McGrath managed to state that a budget which took €3.8 billion from the economy was inflationary but even by a stretch of economics, the comment was strange. It is important to have this discussion and I ask members of the Opposition to support the Government amendment and give the Taoiseach a strong hand in negotiating on our behalf this weekend.
We all agree that stability in the euro area is vital to Irish economic and social interests. The insidious instability we have witnessed in the past two to three years, compounded by gross inaction and a slow creep from one crisis to the next, is politically very destabilising and socially damaging. There has been an excessive focus on the primacy of the markets, to the detriment of any real dialogue on the effects of the chaos we are currently experiencing in the lives of Irish and European citizens. Absent from the debate has been any proper consideration of this fundamental issue.
Markets and economies do not exist — as far as I can establish — in a vacuum. They should exist on the basis of their value to humankind, and not to serve the base interests primarily of the international gambler or speculator. Fiscal stability in Europe and across the world is critical to enable the delivery of social justice. Fiscal crises and uncertainty, coupled with a failure to comprehensively deal with them, leave those weakest exposed, with the poorest and most vulnerable damaged.
There is a massive urgency to stop the rot in the eurozone. The last thing Ireland needs in the coming days is another episode of the "Grand Old Duke of York". The Irish Government is making common cause with those states who see the EU, the eurozone and its future as much more than a duopoly dominated by two major power brokers. The solution lies in a radical and definitive response, in the first instance over the next two days and consequently with a common agreement that would demand the democratic support of all states, either across the European Union or just the eurozone. There is a mutual dependency in that regard.
To borrow a phrase, we should not waste a good crisis. Irish priorities, worked in partnership with EU colleagues, must be brought to provenance, which is what Deputy Mathews and others suggested. Irish interests are European interests and EU interests are Irish interests in this multi-dependent framework we are currently working towards. I find interesting the remarks of some colleagues during the course of the debate which essentially request the Irish Government to show its negotiating hand. That would be pure stupidity.
It has already been shown.
We have some experienced negotiators in this House with some successes to their name. They know that one does not show one's hand in advance of negotiations. There is an insinuation that a treaty has been agreed before the summit has taken place but that could not be further from the truth. I have every confidence in the Irish Government and smaller states to work in partnership to achieve the best possible result, not just to resolve the fiscal crisis but to identify the best way forward for social Europe.
The key outcome of the meeting tomorrow must be a resolution which limits further damage to Ireland and other eurozone countries caused by an unwillingness, thus far, to agree a common approach to fiscal policy, and more importantly, there must be a decision on which countries wish to abide by those rules and which are insolvent and must restructure. Primarily, this crisis has resulted from design flaws in the euro that have existed since its inception. Many economists warned against the introduction of the currency on the basis that countries would lose their ability to devalue or set their own interest rates. Others argued that the euro's creation was a triumph of bad politics over economics and that a monetary union without a central fiscal authority was very risky. They pointed out that in the US the federal tax and transfer system was important in lessening the effects of regional shocks.
The politicians of Europe knew this at the time but they also knew that the people of Europe would not be willing to agree to a fiscal union. Eurozone interest rates were set to suit countries with low growth and low inflation like Germany. This resulted in almost a decade of negative real interest rates in Ireland, facilitating cheap credit which led to the property boom. I would be guilty of lazy analysis if I did not point out that a responsible Irish Government could have tightened fiscal policy by running budget surpluses and limiting banks property lending by introducing higher capital requirements. That would have prevented the property crash.
The Irish Government's duty at this week's summit is to protect Irish interests, and this must involve measures to protect the euro. I am opposed to full fiscal union. I do not believe moves in that direction would be in the country's best interests. The proposal made earlier in the week by Germany and France suggests two major changes — that the sanctions for breaching the 3% deficit rule under the Maastricht treaty be made automatic, and that all eurozone counties implement a balanced budget rule under their own constitution which would be verified by the European Court of Justice. This suggests sovereignty in budget making would only be affected if the rules were broken and national courts would intervene before the European Court of Justice became involved. That is similar to the fiscal rules signed up to by the previous Government in the EU-IMF loan agreement; in summary, there would be fiscal rules, surveillance and enforcement of these rules. A major flaw with this approach is that while it would, undoubtedly, strengthen the euro, it would also make it more difficult for countries on the periphery to introduce counter-cyclical measures to deal with recessions. What we are being offered is surveillance only allowing pro-cyclical adjustment. We are being offered a long period of austerity rather than debt sharing.
No country or group of countries can pursue national self-determination and protect democracy while at the same time moving towards further globalisation. Something has to give. If we want to protect and deepen democracy, we must choose between the nation state and further economic integration. If the European Union wants to pursue globalisation on our behalf, that will affect the nation state and the democratic process. These are the fundamental choices facing each country in the Union. Deeper European integration will inevitably limit each country's ability to tax in a way that its own citizens want.
This is an important debate to which I am sure we will have an opportunity to return. The first thing that strikes me about the original motion is the wording. I do not know if others read them, but I tend to read motions and counter-motions. I do not know whether that puts me in a minority. The motion includes phrases such as "resist all efforts to force Ireland into a fiscal union", "that we refuse to sign" whatever it is that we are fearful of, and that we are trying to resist "changes that hand over our economic sovereignty to a European body". Whatever we have achieved since we achieved independence and sovereignty, the Technical Group, or any Member of the House, could do better than pursue that line of argument, that it is entirely about resistance, that there is a threat and that there are bogeymen who are coming to get us. That comes across in the Sinn Féin speeches also, to which I will return.
There has been much advice for the Taoiseach on what he should do at the meeting, which is fair enough. There is reference to items that should be protected, the bottom line, a red line, "don't do this, don't do that, don't listen to this, don't argue about that, don't attend to this or that proposal," but there is nothing about a vision for the future in many of the speeches made, about what we should do or consider. Would the Opposition not be prepared to consider anything in the greater interests of the people and Europe? Is it all about resistance and putting up a wall around the country? Is it all about ourselves alone, as if ourselves alone, sinn féin, could solve the big problems of the people or Europe?
People have moved on from the notion that we can settle things ourselves. We are part of a global world. I do not say this as a cliché; rather it is a central political question and I say it as a social democrat. I think some members of Sinn Féin are social democrats, although I am not sure. Unlike some in the House, I have respect for that party which has considerable numbers in this House on this occasion, but I would like to hear a little more from its members about the future of the country and a vision for Europe. Deputy Adams says he is in favour of a different type of European Union. What is he talking about? Where is that different type?
Can we address rampant, unregulated global capital by ourselves? Is Sinn Féin joking? Can we solve the problem of labour standards internationally by ourselves? The answer is absolutely not. Can we solve the problems of climate change ourselves? Pull the other one. Sinn Féin may have fooled some people during the years with that line of thinking, but it does not fool me and colleagues in this House. This is a significant issue and challenge for the people. Members of Sinn Féin can smile, but they have nothing to say in response. I appeal to them to come into the House on a future occasion and join in the political debate. They should give us their answers as to how we should address the issue of global capital which has no interest in the sovereignty of individual nations. It has moved on from the question of sovereignty. The issue of democracy is now more important than the threat to the sovereignty of individual nations vis-à-vis each other.
The Deputy will have to leave his argument for another day because I must move on to Deputy Patrick O'Donovan.
I welcome the opportunity to speak on something as important as the motion, which I welcome. I concur with Deputy Alex White that it is not an unusual motion from the Technical Group. It is negative, all doom and gloom. The world is going to fall in on top of us and the Taoiseach should make sure that does not happen. Needless to say, the motion is not ground-breaking.
Deputy Billy Kelleher has made a ground-breaking acknowledgement that we are where we are thanks to a lack of oversight. It is nice to hear a representative of the Fianna Fáil Party finally acknowledge that it did play a huge part in the destruction of the economy.
There is no doubt from a European point of view that serious lessons must be learned. The motion the Technical Group has put before the House indicates that we have learned nothing. It suggests it is business as usual and that we will continue to pretend everything is fine, that we will not change anything and that we will prepare for the next bubble that will blow up in our faces, leaving us all with another massive problem to try to address. We can either take that route or do what the Government, led by the Taoiseach and the Tánaiste, is doing, namely, looking at alternatives to ensure the European Union works for citizens and that it is not narrowly focused, as Deputy Alex White indicated.
There is a temptation to take the Sinn Féin line on this issue. There is a growing fear that the Sinn Féin line might be beginning to resonate in some places. It is that there is an alternative; that there is another type of European Union. Sinn Féin is dead right; there is another type, the Europe prior to the Treaty of Rome——
We are back to reds under the bed again.
——in which there were continuous armed conflicts and narrow nationalistic views perpetrated on smaller countries, with the result that the sovereignty of individual states and their citizens was always under threat.
Perhaps Deputy Gerry Adams knows about a time on the European continent when a longer period of peace was enjoyed than has been enjoyed since 1957, but I am not aware of it. The current European model is not perfect. Uniting 27 countries with different cultural identities, fiscal and economic needs was always going to be difficult. However, when we weigh up the fact that the Continent has enjoyed the longest period of economic prosperity and peace in the modern era, would we want to sacrifice this and run the risk of breaking up the European Union, or perhaps having two types of European Union, one on a fast track and the other on a slow one? Sinn Féin would obviously have us on the slow track, which would run the risk of the whole thing unravelling. I would be totally opposed to this. The world is looking in at Europe and countries such as this. People want to see positivity and creativity. They are weary of negativity. I wish the Taoiseach and the Tánaiste well in their endeavours to bring an Irish suggestion to a European problem.
On the amendment, I state my support for the Taoiseach who I am sure will do the best he can for all citizens of the State. It is not an easy task, but I am sure he will do his best. I concur with what others have said in supporting him in that respect.
I am pro-European Union for a very good reason. Anyone with even a slight understanding of the history of this country in the past 50 years would know that protectionism did very little for the ordinary people. The ruling classes did very well out of it, while the rest of us emigrated.
Deputy Alex White referred to the social democrats in the development of Europe. I remind Members that some of the most staunch pro-Europeans were members of the French, German, Spanish and Italian socialist parties because they could see that a union was the only way for working people to transform their countries. In fairness to Deputy Pádraig Mac Lochlainn, he was the only one to refer to the technology introduced in this country in the 1990s. It was the only chance in the history of the State for working class children to attend secondary school, let alone third level.
I am pro-European Union. I hope Deputies will not be offended by what I am about to say. I am sure everyone present has their own sense of humour, although it is perhaps not as extensive as my own. The people who say they are for Europe often remind me of the sort of white man we have become used to in Ireland who says, in the supermarket or pub, "I am not a racist but....".
People who continually question Europe should put down a motion for a referendum on leaving the European Union. When they are formulating the motion they should not forget that on the last day of each month our good neighbours in Europe send us a cheque for €1.2 billion, and that it was our own, and not the Europeans, who got us into this situation. When the cheque comes I do not hear anyone saying we should send it back.
I support the Taoiseach and others in their endeavours to get the country back on its feet and, perhaps, regain economic sovereignty which was lost on the night of the bank bailout. However, I did not hear too many people talking about a referendum on that.
I thank the technical group for tabling this motion. The Government amendment states that we support efforts to secure an agreement at this week's meeting of the European Council that fully protects Irish interests and contributes to the restoration of stability in the euro area. I might have added my own words to the amendment, hoping that the agreement "also restores the founding principles and ideals of the European project".
The democratic ideal behind the European Union is under threat. This ideal is unique in the international system of states. Independent nations of different strengths have come together in co-operation. That co-operation is structured around an equality among sovereignty, with one member one vote.
The crisis in the eurozone threatens all of this. If we cannot save our common currency everything we have built, all the co-operation and all the good things that have happened could come under threat. We could lose the common market, our common laws and all the benefits we have derived over many years of prosperity.
At the same time, the manner in which we attempt to save our common currency also threatens the European Union as certain members and unelected institutions seek to assert their will over others, undermine the democratic ideal and bring us back to the era of realpolitik , where the strong do what they will to survive and the weak do what they must.
We have a good and unique thing in the European Union and a good and unique thing in the euro currency. If war is an extension of politics by other means then so, at the other end of the spectrum, is economics. With economics, through the European Coal and Steel Community, the Common Market and the euro, we sought to do in Europe what others could not achieve with war or politics. However, we may have taken economics too far, and further than the people were willing to go. In establishing the eurozone we did not put in place the proper structures for the functioning of that common currency. We did not heed the warnings given by many at the time, including prizewinning economists.
We can not go back to the past. We are faced with a genuine dilemma. How do we protect Irish interests and sovereignty over our fiscal affairs? How do we protect and stabilise the euro area in a manner that is both credible and fair while restoring to the European Union that fundamental principle of equality among sovereigns where no member is more equal than another? That is the challenge that faces us now. This is the biggest decision the Government, the Dáil and the people will face, now or for many years to come.
It is not clear if there will be a decision in the coming days, but something will come soon. The status quo cannot last. It is important that we Deputies ready ourselves for the decisions that will come and the debates in which we will partake as elected Members on behalf of the people we represent.
I begin by challenging the assumption in the motion that Ireland had until very recently full economic sovereignty and autonomy, and that sovereignty was recently taken from us through our participation in the troika arrangement.
Over time, we have traded elements of our national sovereignty in return for economic progress. In the 1950s, various Governments looked to deliver economic progress through greater exports, and different international agencies were formed to support that. Every Government since then has said that the way to deliver greater national prosperity is through greater integration with the global economy. Even before the current crisis, we were the second most globalised country in the entire world, through our participation in global capital flows and due to the size of the multinational community in Ireland. Over the last 18 to 24 months, despite the difficulty we have been going through, we have gone from being the second most globalised state in the world to being the most globalised.
Professor J.J. Lee, in Ireland 1912-1985, Politics and Society, makes the point that countries do well when they counter their loss of influence at home with greater strategic planning in how they deal with the outside world. The huge mistake we made during the last ten years was in the quality of our strategic planning in dealing with the outside world and the global capital flows, to which Deputy White referred, and with creating employment. That strategic planning was lost. We are now paying a terrible price for that.
The answer is not to turn our back on forces with which we have been able to engage positively during our history. The answer is to reassess how we do it and ask how we can do it better now. Two elements of this are essential. First, we must get ourselves to the point where Irish public services are paid for by Irish taxpayers. The greatest thing we can do in restoring our sovereignty and improving where we are at present is to reduce our need to borrow from others. Second, we have a huge interest in the improved economic governance of Europe as opposed to the delivery of economic government in Europe. We would be in a better place if events outside our control, in countries outside our control, had not gone in the direction they did in the past 18 to 24 months. Putting in place mechanisms to ensure that bad decisions are not made, as opposed to taking control of those decisions, is not something we should be afraid of. It is something we should embrace.
It is important that we have this discussion. Despite the fact that I disagree with much of what was said on the other side of the House, I welcome the seriousness with which some of the contributors on the Government side have engaged with the debate, which we badly need to have. Some of the comments were glib and off the point, although that was not true of any Deputies in the Chamber at present. There were several references to green jerseys. That is glib. This is not a football match. There were also suggestions that Deputies on this side of the House are anti-European. This is particularly misplaced with regard to the Deputies of the United Left Alliance, who have tabled an amendment to the motion. I hope Deputy White has read our amendment because it puts forward positive proposals. The starting point of the United Left Alliance is thoroughly and completely internationalist. Our critique of what is going on in the European Union and of the eurozone crisis stems from a completely internationalist perspective. This is why we have put ourselves on the side of the people of Greece, Portugal, Spain and, for that matter, Egypt, who are resisting what is going on in the global economy.
It is important that we understand what is at stake in the current crisis. We are facing the most severe crisis since the 1930s. People should ponder what that means. The depression of the 1930s led to the Second World War. It does not overstate the seriousness of the situation to say we could be propelled to such a crisis if we get this wrong. In that regard, EU leaders, including the Taoiseach, do not seem to get what is going on. They are debating the degree to which we should dismantle democracy within the European Union to ram through a certain economic agenda — of bank bailouts, austerity and market measures. Every statement they make is about the need to assuage the markets. The issues at stake in the European debate are not the ones on which the media are focused, nor are they the ones that will be debated at the European Council meeting. It is not what they disagree on, that the Government disagrees with them or that they disagree among themselves that is the problem, but what they agree on. They all agree that we must continue to bail out banks, impose austerity — let us call it fiscal responsibility — and assuage the markets. However, this fails to understand the fundamentals of how we got into the crisis in the first place. If we do not understand how we got into it, we have no chance of resolving the issue. It was the markets that led us to the crisis. They were unregulated, frenzied and profit-hungry. It was their trillions sloshing around in the international markets, looking to make the quickest buck, wherever possible, whether through speculation in property, derivatives or bonds, that brought us to the crisis and they are still doing it.
Nevertheless, the policy being proposed by all sides of the European leadership, including the Government, is that we must continue to assuage the markets, that the issue will be resolved when the markets are happy. However, even the markets do not believe this is possible, which is why they are downgrading European debt, even Germany's. The European economy is being smothered in the bankers' debts and cannot recover with them. Even the markets which caused the mess know this. They also know something else — that austerity is crippling growth in the European economy. The need to bail out the banks and the resulting austerity measures demanded of economies are crippling growth and making a bad situation worse. None of them will debate this issue. It is not being debated in the media and is not and will not be debated at the European Council meeting. In fairness to Deputy Peter Mathews, in referring to derivatives and the craziness of the European and global financial system, he is pointing in the right direction in terms of the madness of the markets in the way they are operating.
It is in this way that what is happening elsewhere in Europe intersects with the austerity being imposed here. These are not separate issues, they are connected. Many of the budget measures being imposed are directed at young women, single women living in poverty and their children, who want to educate themselves. They are trying to get on community employment and FETAC schemes to educate themselves in order that their children will be able to contribute to society and they can help economic recovery. These measures will drive them back further into poverty. This is but one example. If the Government keeps doing this to the people who produce the wealth in the economy and continues to deny them an education and does not invest in them in order that they can work, the European economy will not recover.
The Government's hopes that the ECB will solve the problem are mistaken also. It is a false debate. If they print money — the solution being pursued by Chancellor Merkel and President Sarkozy — there will be inflation. That is what happened in the 1930s. If they just print money and there is no real economic activity, there will be inflation. Both sides of the argument are wrong. The only alternative is investment and the only way investment can happen is if the trillions now in the hands of the financial markets are taken from them and invested in rational economic activity, in infrastructure, strategic enterprise, industry and putting people back to work. If we do not do this, there is no chance of recovery.
To do this, we must consider redistributing wealth. If the Government does not put the redistribution of wealth on the agenda, we will not be able to control what the markets are doing. They are running amok. If they are not happy with what comes from the summit — they will not be — they will start speculating again. We must remove the power from them This can only be done by redistributing wealth, which means measures such as wealth taxes, progressive income taxation and so on. It also means democracy, with ordinary people deciding how resources should be invested.
Like my colleague, I am speaking as an internationalist in support of the ULA positive addendum to the Technical Group's motion. The idea that one cannot be pro-Europe if one is against the European Union is nonsense. The current position makes it clear to people everywhere that there is dictatorship by the markets is not an exaggerated claim by left wingers in respect of a global capitalist plot, rather it is the reality in Europe which has been laid bare before the eyes of ordinary Europeans everywhere. What is under way is a monumental assault on democratic rights by European bondholders, bankers and speculators, facilitated by the leadership of the European Union.
The reaction to the crisis in the eurozone has been compared to being like a house on fire, while the owners stand around arguing about the fire safety measures they need to put in place. It is clear that the European establishment is incapable of cobbling together anything to put out the fire and defend the interests of ordinary working people throughout Europe. The problem is not over-borrowing by governments but excessive lending by private banks which fuelled bubble-led growth and a crisis which has been transferred to ordinary people. I remind the Deputy from the Labour Party that the cheque we receive every month is not a present. It is a loan at extortionate interest rates to pay the debts of banks and private individuals.
It is obvious to everybody that the markets are calling the shots and demanding restructuring. Agencies such as Standard and Poor's are increasing the pressure on all countries in the European Union in order to get their way. The point has been made that they are threatening to cut the ratings of 15 countries, including Germany and France, and Reuters predicts a situation where we will see a 40% reduction in eurozone output. This is critical. What is being demanded is fiscal control over member states' budgetary policies to try to persuade the ECB to increase its bond market intervention. That is the game under way and it is being spearheaded by Chancellor Merkel and President Sarkozy. In order to achieve this, what is up for grabs is a further erosion of democratic rights. Measures being considered go way beyond the EU six-pack governance measures which, to be honest, already go far enough, in strengthening penalties on countries for not reaching targets, thereby facilitating the creation of a situation where the European Commission would come in and demand the liberalisation of labour markets or privatisation and so on. What is being discussed goes even further than this, with the possibility of powers being given to the European Court of Justice to decide whether countries are breaking the rules.
We are in the era of supreme rule by technocrats. We are aware of the process under way in countries such as Italy and Greece and now see the influence exerted by former Goldman Sachs managing directors and advisers at the heart of the European Union. Should we seriously believe they are coming to power to protect the interests of ordinary Europeans? Clearly, they are being imposed to protect the interests of the bankers and the wealthy elite. The process under way which suggests there might be a change to the Lisbon treaty without a referendum or without coming back to national parliaments is a step too far down that road. There is talk, too, about attempting to use the protocol in the Lisbon treaty to bring about treaty change without a referendum. This is confirmation of the warnings given at the time the treaty was debated. Those of us on the "No" side warned that it included self-amending powers. These warnings have come to pass.
One of the key purposes of the motion is to issue the Taoiseach with a warning that under no circumstances should he entertain any attempt to change the protocol on excessive budget deficit procedure. He must exercise a veto if that debate or choice is posed. Any attempt to push through these measures without a referendum will simply not be tolerated. As a minimum, we guarantee the Government will face a legal challenge based on the Crotty judgment, not to mention the opposition that will be built inside and outside this House.
The key questions are why all this is being done and in whose interests these democratic rights are being eroded. The only reason this is being considered is to enforce and institutionalise austerity. They are afraid of the idea of a referendum in Ireland, the only country which must hold one, because they fear it would not be passed. It is a very legitimate fear because who in his or her right mind, in Ireland or in any other EU country, would vote to increase the retirement age, cut spending, unleash a massive scale of privatisation and allow the EU have control over his or her national budgets? No one would vote for that so instead they are trying to dispense with the luxury of democracy.
Part of the reason for this debate is to let the Taoiseach know that they will not get away with it and that these policies are being resisted all over Europe. Those of us on this side of the House and in the United Left Alliance very much support the struggles of people all over Europe against austerity. Last week we saw one of the largest strikes in Portugal against increases in VAT, hikes in gas, electricity and public transport costs and plans next year to force all workers to work an extra half an hour every day unpaid, which is the equivalent of 17 days unpaid per year.
Last weekend, there were 80,000 people on the streets in Belgium protesting against cuts very similar to the ones the Government has imposed on people here. There was the massive strike in Britain and Northern Ireland last week and there are planned strikes in Italy next week as part of a national strike movement there.
We support all of those campaigns against austerity. That is the vision for a new Europe where ordinary people come together and say they did not create this crisis and they will not be forced to pay for it. Standing firm against austerity is a very positive alternative as is putting on the agenda the idea of making bankers pay for the crisis and a Europe run in the interests of the majority rather than the profits of a few.
I welcome being part of this debate, which is a very important one to have this week, and I thank the Technical Group for tabling the motion. I speak as an internationalist, a European and an Irish person. It is important to put on the agenda what is happening now and the lessons of the past because I do not believe we have really learned from the lessons of the past.
Many economists and economic historians believe the economic collapse of the 1930s could have been avoided. They agree that what should have been a normal period of contraction in the capitalist cycle was turned into a great depression by the wrong policies of central banks and governments. Those policies of those banks and governments were to stick with the gold standard, balance the books, drive down wages, cut imports and boost exports. In today's terms, that translates into austerity and what is happening here — a programme of austerity which deflates economies, slashes demand and creates mass unemployment.
A US presidential candidate from an earlier period said at that time that mankind was crucified on a cross made from gold. I am not an economist or an economic historian but anyone who is prepared to look at things clearly will see that the policy of austerity, attempting to cut the deficit, driving down wages to achieve competitiveness and cutting welfare and social and infrastructural spending are not and will not work and, even worse, risk repeating the disaster of the 1930s.
At the insistence of the IMF, the EU Commission and the ECB, all unelected bodies, Greece, Italy, Spain and Ireland have been told they will be put on rations. Greece and Italy, which were slow to follow orders, experienced regime changes. Now Merkel insists that this policy, which is completely undemocratic and condemns millions of unemployed people to unemployment, lower living standards, reduced social services and years of economic stagnation, could be enshrined in treaty changes.
The response of our Government is to ask if this cannot be done some other way because treaty changes and referendums are a problem for Ireland and the people keep getting it wrong and saying "No". Will we tweak the Lisbon treaty to try to avoid a referendum?
What really gets my goat is that we are being told by this Government that following three years of austerity, this country must face another three years of austerity and that we could potentially have to hand over our fiscal independence to the ECB and a finance minister in Europe who will control our economy.
We should also be clear that the German Government is offering nothing in exchange. Sarkozy may believe he has a deal with the ECB moving to become a lender of last resort but he does not. German Government sources are busy briefing that no such deals exist. Despite this, I have no doubt that the Government will continue to follow orders and hope for the best.
Europe is heading for yet another disastrous period in its history unless the majority of working and unemployed people build a mass movement of solidarity in opposition to these insane policies, challenge the markets dictating our lives and impoverishing us, put the rights of people first, enshrine those rights and put people to work to protect those rights.
I support the motion in the name of the Technical Group and the amendment in the name of United Left Alliance Deputies. In the meetings over the coming days, Ireland's interests must come first and we must resist all attempts to force us into a fiscal union. I make no apologies to Deputy White or any other member of the Labour Party for making that comment. We cannot be dictated to anymore by the markets and we must not be dictated to by Merkel and Sarkozy, the Governments of Germany and France and the EU Commission. We must ensure there is no talk of burden sharing. It is not our burden. Even the Taoiseach told us in his address to the nation that it was not our fault but, of course, he wants us to pay for it. The EU must be told very clearly that we will not pay the private debts of bankers, speculators and bondholders.
We must tell the EU that bank debt must be cancelled because it is crucifying Irish people and will continue to do so if we do not stop this situation. Our corporate tax rate must be protected and the jobs of the people in those industries must be protected. The suggestion that the EU is like the good samaritan helping out a neighbour is way off the mark, as I said before. Reckless lending by European banks, in particular German and French banks, to Irish banks, which recklessly lent to developers, speculators and bondholders, has created this position and now ordinary Irish people, middle and low income earners and poor people, are being made to pay for a recession which they had no hand, act or part in creating. The Taoiseach must put a stop to that at these meetings.
The burden of debt is completely unsustainable. The single biggest rise in Government spending from 2008 to 2010 was an increase from €2 billion to €4.9 billion in debt interest payments. This figure will rise further to €6.8 billion in 2012 and to approximately €10 billion in succeeding years.
This increase is due to borrowing to bail out and recapitalise the banks and to fund the continuing fiscal deficit. Money borrowed to cover the debts of private banks should not be paid. A considerable portion of the debt payment arises from this source and is interest alone. Additional capital repayments will make debt servicing a crushing burden for Ireland for decades to come.
Regarding the promissory note, liabilities undertaken by the State in connection with Anglo Irish Bank and the Irish Nationwide Building Society, INBS, TASC, the progressive research group, stated in its budget 2012 proposals:
If we assume a fairly benign 4.7 % interest rate on Government borrowings after the country has exited the external financial assistance programme, we can estimate that the total cost of these notes between 2011 and 2031, including the interest cost on borrowings, will be 85 Billion. Under this scenario, the annual cost would peak at over 5.3 billion in 2023, and there will be continuing debt interest costs on payments beyond 2031.
This is horrendous and excludes the effect of servicing debt arising from the bailout of AIB and Bank of Ireland. TASC is assuming that the Government will be able to sell bonds at 4.7% after 2015. This is optimistic to say the least, particularly in the context of growing turmoil in the eurozone and in the world generally.
The State has undertaken €279 billion in bank-related liabilities. Were any substantial amount of this called in, the situation would go from horrendous to catastrophic. Not only is it unfair to make the citizens pay debts they never incurred, but it is unsustainable and will continue to cost jobs and fuel emigration. If our debt burden is not relieved, it will continue to destroy the economy, families and jobs.
The main promise made by the Government parties during the election was to reduce the high level of unemployment and to create hundreds of thousands of jobs. This week's budget will remove 20,000 jobs from the economy. In the February-July period, an additional 4,500 jobs were lost. This takes no account of the many people who have emigrated in the same period. An entire generation of people is being consigned to misery. Ireland must stop paying bank-related debts and the interest thereon. Otherwise, there will be no growth in the economy and more jobs will be eliminated. The budget will destroy a further 20,000 jobs, in that approximately 10,000 will be eliminated with the reduction of €750 million in the capital programme and 6,000 public service jobs will be removed. The €3.8 billion to be taken out of the economy will come out of the pockets of people who spend all their income. All of this derives from our acceptance that bank-related debt must be paid. If we do not stop paying those debts, our people and country will be ruined.
At a time when 450,000 people are unemployed and shops on every street in towns, villages and cities are closing, understanding how any government would increase the VAT rate and take €3.8 billion out of the economy is difficult. The budget proposals will create additional unemployment and lead to further closures, particularly of small businesses where employers are hanging on by their fingernails.
Arising from our financial difficulties and private and banking debt, a significant investment strike is under way and has already accounted for a reduction of €30 billion. Paying such a high level of debt is detrimental to the country and families. I support the ULA Deputies' amendment to the motion.
I thank all Deputies who have contributed to today's extensive debate. It is always welcome to have matters relating to Ireland and the European Union debated in the House. As a former Member of the European Parliament and the Joint Committee on European Scrutiny, I have been a strong promoter of better engagement between the House and our European institutions. This is needed now more than ever, given the difficulties at European level.
I deliberately stated "our European institutions". We are part of the EU and there is no "us" and "them". It will never work if such negative, confrontational language is prevalent. However, this motion is all about resistance to Europe. It comes across as negative and lazy and contains no alternative proposals or ideas. I am surprised some Deputies put their names to it. I despise such language, particularly from those who for years embraced the EU while they saw the supports coming through in the form of access to markets, supports for agriculture and funding for industry or when the cheque comes from Europe every week to pay for social welfare, nurses, teachers and doctors, the very people the Opposition mentioned during this week's debates on the budget and Social Welfare Bill.
I ask every Deputy to support the counter motion proposed by the Tánaiste, to wear the green jersey, as Deputy Boyd Barrett described it——
As opposed to a blue shirt.
——and to give a clear, unanimous mandate to the Taoiseach so he can have the House's full support in the critical negotiations tonight and this weekend. As a former MEP, I can safely say that, by and large and regardless of their political colours, our elected representatives in Brussels and Strasbourg wear the green jersey every week and get the best for our country. Irrespective of their political background, I compliment them on their approach.
The Government would want to wear some trousers.
Some of the Opposition could learn from their approach.
During this debate, Opposition Members raised the issue of the common consolidated corporate tax base, CCCTB. The Government has been clear, in that we will protect our right to set our own corporate taxation rate. This echoes what I stated in the European Parliament in November last year, namely, that we would never accept any diktat in this regard. The Taoiseach and the Tánaiste have echoed this view repeatedly.
We need to emerge from this weekend's meeting with credible decisions if we are to demonstrate quickly our determination to protect our currency, to support member states that are working towards economic recovery and to introduce strong rules to ensure fiscal discipline. We should not be afraid of strong and fair rules. We should shape and embrace them. Was it not the laissez-faire regulatory process and easy access to money engulfed by the ridiculous stoking of the property market by Fianna Fáil and its partners that got us to where we are today?
And the ECB.
Future generations of Irish children do not need these conditions to prevail again. That is why this Government through the Ministers, Deputies Howlin and Noonan, are making changes domestically to how we as a Government and country manage our budgets. These changes will bring about greater transparency and rigorous analysis never seen before.
This weekend the challenge for all European and national policy makers is to get confidence back in the euro currency. It is of critical importance to Ireland to have a stable currency, based on rules to which all member states have signed up and by which all are obliged to play. It is in our interest that these rules are enforced fairly, regardless of a country's perceived size or economic prowess. Priority must be given to answering the immediate crisis and taking the necessary steps to restore calm to the markets. Looking to the longer term must not distract us from what needs to be done now.
Ireland will not be forced into anything at the European Council, nor, as the Technical Group says, will the Taoiseach be "handing over our economic sovereignty". He and this Government will protect Ireland's interests as we have done since being elected. This Government is working to retrieve our economic sovereignty, which was stolen from us by 13 years of the previous Administration.
President Van Rompuy's approach to his interim report of first seeing what needs to be done and only then how that can be best done is one the Government supports. President Sarkozy and Chancellor Merkel's proposals are also being rigorously digested by this Government. Let us be clear that we will only embrace the elements that work for us. President Van Rompuy's emphasis on strengthening the short-term crisis management tools available to us, as well as acknowledging the need to adopt, over the medium term, measures that will also fortify our economic union, echoes Ireland's position. The possibility of limited treaty change is on the table and the Taoiseach will engage positively on this. We believe that any improvements should be looked for within the current treaties first. For very good reasons, there are processes set out in the treaties that have to be followed. These are timely processes that involve protecting democracy and ensuring consensus. However, if we have to look at the area of treaty changes then we will do so but only in the interests of the people of Ireland.
I ask everyone to support the Government's amendment to the motion and the amended motion, which is the only motion viable for this Government and the country.
I propose to share time with Deputy Stephen Donnelly. For centuries the Irish people have strived for freedom. Some 90 years ago this week, an Irish delegation led by Arthur Griffith, Robert Barton and Michael Collins negotiated the Anglo-Irish Treaty in London. For the Twenty-six Counties at any rate, we had achieved freedom and the right to self-determination. To many in the British establishment, this was a day they thought would never and should never come about. The reason for this was that they believed the Irish were incapable of ruling themselves. It took great belief, energy and sacrifice over many centuries to gain the freedom we finally achieved. However, within less than a century we are on the verge of giving it all away. We inherited a system of governance from the British whereby the country was run by elected representatives at national and local level. However, over the past 90 years there has been a gradual erosion of powers for those we elect. We began by removing every power elected members of local authorities have and ceding it to unelected and unaccountable county managers. The logic was that the Irish people are incapable of making decisions for themselves.
In the past decade we have seen wars in Iraq, Afghanistan and Libya to fight for the ideal of democracy. If the USA was to apply its democracy fighting logic to the European Union, we should be expecting bombs any time soon. Over the past months we have seen democratically elected leaders replaced by technocrats in Italy and Greece. We also saw the expressed wish for a referendum in Greece denied because the European Union did not trust the people of one of its states to make the right decision. The undemocratic process does not stop there. Today it is reported that "Merkozy", as the leaders are now called, and various euro technocrats will meet up before the summit on the future of the euro. The deal will be done before any of the other 25 states in the EU have their say. At what point will we say that we will accept no more? It appears our Government has no limits when it comes to being humiliated. In February, it was elected to represent the best interests of the Irish people. Sadly, it does not appear to wish to have a say in our destiny.
There are no riots on our streets.
How can the Government stand by and watch while the leaders of Germany and France decide our future down to the last detail? Flawed as the European institutions are, surely if they have any future, the "Merkozy" duo cannot be allowed to continue on as if they are the only two countries affected by this crisis. The European banking crisis has, in a sense, done us a favour. It has shown us that when push comes to shove the opinion of a small country like Ireland is irrelevant. It has shown that further integration would leave us with even less say and that Mother Ireland is close to the grave unless radical steps are taken by this Government.
I agree with the assertion that, for the euro to work, we must have full fiscal union. Anything else is a denial of the truth. It is in the economic interest of Ireland for the euro to survive and it is because of this that we should leave the euro in a structured and agreed way. For that matter, so should Spain, Italy, Portugal and Greece. We will then be left with countries unsuited to a common currency being able to get on with it. The political establishment here attacks the idea of leaving the euro as not being feasible. However, any objective analysis of Ireland's membership of the euro will show that it has been an unmitigated disaster. The euro was introduced when Ireland's economy was starting to overheat and an increase in Irish interest rates was warranted. Instead, the eurozone interest rates set by the ECB reflected the needs of France and Germany, whose economies were in the doldrums, the latter as a result of the enormous cost of reunification. It is not possible to set one interest rate and serve the needs of Germany and the Irish economies.
In his Budget Statement on Tuesday, the Minister for Finance stated "If we need a role model it should be the economy of the mid to late 1990s where over 600,000 jobs were created and growth was based on competitiveness, high educational standards, a credit flow from the banks to enterprise and hard work." The Minister is correct and we need to return to that era, an era when we had our own currency for the only time in this nation's modern history. Some 40% of Ireland's exports go to the UK, the next 20% go to the USA and the remainder goes to the EU and the international area. When Ireland first joined the German-based euro, it was worth 56p and $0.90. Today is it at 85p and $1.35, down from highs of 94p and $1.47. When the Minister for Finance talks about competitiveness, he should consider the fact that, since we joined the euro, we are 50% less competitive than our largest trading partners.
Opponents of this view, who suggest that Ireland exiting the euro will cause multinationals to leave our shores, are being untruthful and pessimistic. During the currency crisis, Digital's hardware plant in Galway was under pressure and a management delegation met the then Minister for Finance, Bertie Ahern, and implored him to devalue the punt. When tied to the Deutschmark in the ERM, the punt had risen to a sterling value of £1.10. The Minister for Finance refused and 1,200 jobs were lost when the hardware plant closed and production was transferred to a sister site in Ayr, Scotland. Scotland is not in the ERM or euro and a short time afterwards Ireland left the ERM and devalued. We should do the same now.
More recently, Dell left Ireland and the euro and relocated to Poland. Poland is not in the eurozone. From 1993 to 1999, while Ireland's currency was outside the ERM, sterling and the euro, foreign direct investment prospered in Ireland and contributed greatly to our 7% annual growth rate. It is estimated that approximately 7% of exports from Irish multinationals go to UK. Following an exit from the euro, Ireland's currency would devalue against sterling and the dollar, benefiting exporting multinationals. Multinationals are well versed in managing currency fluctuations. For the most part, they use currency fluctuations to their advantage. Now, we can throw into the mix the fact that fiscal union will end our 12.5% corporation tax rate. As I am sure the Minister of State is aware, this will not go down well with our multinationals.
Those who argue that leaving the euro would mean expulsion from the EU are simply not supported by the facts. There is no legal mechanism to expel any country from the euro; almost a third of EU members are not in the euro. Why should Ireland be expelled for being no different from one third of all other EU members? Are all non-euro countries to be expelled too?
Ireland was warned about the consequences of joining the euro, most notably by Mr. Anthony Coughlan but also by Mr. Maurice Doyle, former Governor of the Central Bank. When asked about the rights and wrongs of joining the euro, he said that Ireland had already had a political, economic, monetary and fiscal union and we got the hell out of it as soon as we could.
This debate has been triggered by tomorrow's European summit. At that summit, the European leaders, Ms Merkel and Mr. Sarkozy, will discuss treaty change with representatives of the other states, some elected like our Taoiseach and some unelected like the new Prime Ministers in Greece and Italy. I will deal with the summit in a minute but first I will address what is at the heart of this debate.
We are all European citizens. We enjoy free movement within Europe's borders and our businesses enjoy trade free of quotas and taxes. We share many laws, reflecting shared social values and some of us share a common currency. Ireland has done very well out of its membership of Europe and the world is a better place for some of the collective actions Europe has taken, most notably in the areas of human rights law and environmental protection.
Why then is there so much fear and so much concern in this House and around the country regarding current events in Europe? It is because the type of Europe we want and signed up to is drowning. We want a democratic Europe but we see an ever-growing absence of democracy. This has now gone so far that it can replace Prime Ministers with people who are on-message with France, Germany and the ECB. We want a Europe that reflects the social values of western democracy but what we see is lone parents having to deal with cuts and pensioners who must turn off the heat in their houses to cover speculators on secondary bond markets. We want a Europe that champions equality but we see an emerging display of arrogance and authoritarianism that says some are more equal than others. We want a Europe that can do all of this by being economically strong but, instead, we see European leaders destroy that economic strength by acting in narrow domestic political self interest.
Why is there so much fear? Because when the people of France and the Netherlands voted democratically against the European constitution, the choice was taken away from them. When we in Europe were convinced in part by Sarkozy to vote "yes" because we were the only people in Europe whose rights were protected by our own Constitution, he came to this country and gave us his word that corporation tax would never ever be on the table. It is contained in the text of his proposal for tomorrow's sham summit. There is fear because Ms Merkel and Mr. Sarkozy are meeting unelected officials before the summit to agree the strategy for their Trojan horse. If the Government cannot see this is a Trojan horse, it is blind. If treaty change is agreed tomorrow and put before the people, the Taoiseach will come back with a beautiful wooden horse and will say it is only giving teeth to the Maastricht treaty, that it makes us all stronger and richer and more democratic. Make no mistake, that horse is full of bean counters in suits controlled by Germany and France. When the trapdoor of that horse opens, they will head straight into Government buildings and take control of the Department of Finance.
The Government has repeatedly stated that it is in favour of stronger economic governance in Europe. That is shorthand for saying it wants an external European body to have some range of powers over our financial decision making. The Taoiseach and the Tánaiste have spelled out the rationale for handing over decision-making powers to a European bureau. The logic is that we made terrible mistakes in the past and if only we had masters in Europe to enforce prudent fiscal discipline upon us, we would not be in this mess. I can understand why the Government believes this. The current Government makes great play of the mistakes made by Fianna Fáil but even the most cursory glance at its own election promises in 2002 and 2007 will show the Government parties strongly advocated higher and higher spending and strongly advocated lower and lower taxes. Fine Gael voted for the bank guarantee and Fine Gael and the Labour Party are implementing it. I can see why it wants this but if the Government does not think itself capable of running the country in a fiscally disciplined way, it has no business being in Government.
At its most benign, treaty change would give teeth to the Maastricht treaty. What would that say? It would say that the budget deficit cannot go over 3% of GDP and total debt cannot go over 60% of GDP. This position completely misses the point. During the bubble, we ran a budget surplus year on year and we had one of the healthiest debt to GDP ratios in Europe. Signing up to this sort of treaty would not have saved us from what happened. The Government might not understand this but the French and the Germans understand it and that is why their proposal goes far, far beyond Maastricht, including corporation tax.
The Tánaiste stated earlier that Heads of Government must be prepared to do "whatever it takes, regardless of the inconvenience". I say shame on him for that language. He referred to the Commission as the guardian of fiscal discipline. I say that is his job. He stated earlier that European leaders would do whatever it takes to save the euro. Does this include smothering democracy? Does it include turning off the heat in pensioners houses? Does it include surrendering our sovereignty less than 100 years after we got it? Maybe some things should be fought for no matter what it takes but being members of a currency union run by incompetent ideologues is not one of those things.
The treaty changes being proposed have nothing to do with saving the euro; all of the tools required to save the euro are already in place. Those advocating treaty change are refusing to use those tools until they get what they want. Treaty change is about a goal of furthering a federal Europe. Perhaps that is something we should have over time but absolutely not like this. I call on every Member of the House to vote for the motion and I commend the motion to the House.
