European Council: Statements

The Taoiseach

I am pleased to have this opportunity again to brief the House ahead of the forthcoming meeting of the European Council in Brussels on Thursday and Friday of this week, 1 and 2 March. The meeting will begin on Thursday evening, with the customary exchange with the President of the European Parliament followed by a first working session and a discussion over dinner. On Friday morning, we will sign the Treaty on Stability, Co-ordination and Governance in the Economic and Monetary Union. This will be followed by a further working session. As we will have a debate on the question of the Government's decision to hold a referendum on the new treaty in a short while, I intend to focus on the important issues the European Council will consider.

The spring European Council is traditionally the annual set piece review of economic policy in the EU but this is no time for business as usual. The main task for our meeting will be to review implementation of the European Union's economic strategy and to ensure it is fit for purpose in this volatile environment. We are now embarked on a strategy that seeks to pursue fiscal consolidation alongside effective steps to boost sustainable economic growth and job creation. This is a good and balanced approach. We need to ensure that efforts in fiscal consolidation lay the groundwork for creating jobs and boosting confidence and in investment in our economies - Ireland has long been a strong and vocal advocate of such an approach.

In addition to concluding the first phase of the European semester process, this week's meeting of the European Council will see leaders agree important EU priorities for a range of international summit meetings over the coming months, including the G8 and G20 summits and the Rio +20 summit meeting. On the foreign policy front, we will address ourselves to the Union's relationship with our southern neighbourhood, one year on from the Arab spring. We will also consider the unfolding horrendous events in Syria.

It is also expected that the European Council will take a decision this week on granting candidate status to Serbia. Ahead of this European summit, the Government has again been highly active in engaging with partners to lay the groundwork effectively for a productive European Council meeting. Last Thursday, I travelled to Berlin and had a meeting with Chancellor Merkel, Prime Minister Petr Nečas of the Czech Republic and Prime Minister Valdis Dombrovskis of Latvia. This small informal meeting proved to be a particularly useful opportunity for free-flowing exchange on longer-term issues for the Union as well as an opportunity to hear what the economic perspectives are in our respective countries.

The following day I met with Prime Minister Mario Monti in Rome. This served as an extremely positive meeting during which we addressed a wide range of issues across our agenda in Europe at the moment. We have a very strong common accord in our approach to many issues - the pressing need for growth to complement consolidation, the importance of completing the Single Market, and our common and unswerving support for the Community method in our engagement at European level. We also both agreed that the trade agenda for the EU is an important element of future business. We need to step up our ability to trade with strategic partners and to continue to grow our economies including through developing our export markets. I was struck by the fact that the last bilateral meeting at prime ministerial level between Italy and Ireland took place as far back as 2004. Italy was, is and will continue to be a major EU member state, with whom we have a great deal in common across the entire EU agenda.

My colleagues in Government have been very active in advancing Irish positions ahead of this week's meeting. The Tánaiste and Minister for Foreign Affairs and Trade, Deputy Eamon Gilmore, attended the Foreign Affairs Council meeting in Brussels on Monday last, which laid the groundwork for the summit meeting's discussions on foreign policy issues, most particularly on Syria. The Tánaiste also represented Ireland at an international conference on Syria, held last Friday in the Tunis, Tunisia. He was one of more than 60 foreign ministers in attendance, illustrating the engagement and solidarity of a broad swathe of the international community on the evolving situation in Syria. Similarly, the Minister of State with responsibility for European affairs, Deputy Lucinda Creighton, was in Brussels yesterday representing us at the General Affairs Council, which is tasked with preparing the work of European Council meetings.

As a critical element in our ongoing engagement within the Union, I have joined 11 of my European Council colleagues - from a broad cross-section of partners, large and small and from north and south - in addressing a letter to European Council President Van Rompuy and European Commission President Barroso, which sets out eight priority areas on which action can be taken to strengthen growth in Europe. I welcome the fact that President Barroso has already responded to our letter. I am confident this meeting of the European Council is well placed to address economic policy issues, particularly the growth and jobs agenda in a most thorough manner. I will return to this initiative later.

Tomorrow's European Council has a specific role in terms of the European semester process. It must consider the annual growth survey, produced last November by the Commission. This has now been examined by the member states and the different Council formations, especially ECOFIN and EPSCO. The Danish Presidency has produced a synthesis report pulling together the views expressed across these different Council discussions. Tomorrow's European Council is expected to endorse the annual growth strategy. The priorities it sets out are consistent with the Europe 2020 strategy for growth that is smart, sustainable, and inclusive. They align well also with the national priorities established by our programme for Government and we support them.

The European Council will also reiterate its support for Europe 2020, Europe's growth strategy, and to urge member states to redouble efforts to meet its targets. It will call on member states to reflect these priorities through concrete commitments in their national reform programmes and stability or convergence programme updates, which are due in mid-April. Nationally, we will provide a comprehensive review of progress towards achieving our Europe 2020 targets in April.

I note with some satisfaction that, at European level, renewed attention is now being paid to the growth agenda. We have been calling for this for some time. It is an appropriate balance to the established and necessary focus on fiscal consolidation and budgetary discipline. There is consensus in the EU that we need this two-pronged approach. While much of the European semester process looks at the longer-term structural reforms, needed to avoid a repeat of the current crisis, the European Council tomorrow will look also at measures that will have a short-term effect for growth and jobs.

This approach was endorsed by EU leaders at the informal January meeting of the European Council. In order to maintain momentum and ensure that our growth priorities continue to be reflected, last week I joined the Prime Ministers of 11 EU member states in co-signing a further letter ahead of next month's meeting. We called for progress in eight specific areas: the Single Market agenda, and raising implementation standards; a truly digital Single Market by 2015; a genuine, efficient and effective Internal Market in energy by 2014; commitment to the European research area and to providing the best environment for innovation and entrepreneurship; stronger trade links, including with fast-growing emerging markets; reducing the administrative burdens from EU legislation; better functioning of labour markets; and a financial services sector that serves the interests of citizens and business.

Earlier this week, President Barroso wrote back to the 12 authors of this letter, confirming the Commission's commitment to these areas, and listing in detail the action taken or planned by the Commission in each of the eight areas. Other inputs to tomorrow's European Council include a letter from the Finnish Prime Minister on the digital Single Market and a joint Franco-German paper on growth enhancing measures. Our concerns and interests have been reflected in the draft European Council conclusions discussed at the General Affairs Council yesterday, and we are continuing our efforts to ensure these issues remain prominent in our discussions and outputs.

These are not just points of academic interest. The close attention being paid to the Single Market fits with our emphasis on the growth and export potential of Irish SMEs and start-ups. A better functioning Single Market is a better environment for Irish exports, including by removing bottlenecks in key growth areas. We are in the process of rebalancing our economy towards sustainable, export-led growth and we see significant potential in unlocking the full potential of Europe's dynamic market of 500 million consumers.

It is by creating the right conditions for enterprise that we create the right conditions for jobs. Last week saw the launch of the pathways to work initiative designed to help tackle the problem of long-term unemployment by getting people ready to take up jobs. This initiative complements the action plan for jobs launched earlier in the month which concentrates on the economic reforms needed to accelerate the growth of jobs. Both of these national efforts fit well with the renewed growth emphasis at European level.

We must, on the one hand, continue to create the right conditions for job creation and entrepreneurship in an increasingly knowledge-intensive and interconnected global economy, and on the other, we have to improve participation and employment rates with sensible and job-friendly labour market policies. That is the emphasis of the Europe 2020 Strategy, and we believe it is the right emphasis.

The European Council will agree priorities for G8 and the G20 Summits in Mexico in May and June respectively. It will also consider key principles to guide the EU's preparations for the UN Rio +20 conference on 20-22 June 2012.

In regard to the southern neighbourhood question, the European Council will also consider a number of foreign policy issues, including developments in the southern neighbourhood, a year on from the start of the Arab Spring. Although a substantive discussion is not envisaged on this occasion, European leaders will take stock of the latest developments in the region and assess the implementation of the EU's supports to date. Ireland fully backs the approach the EU has taken in its response to the momentous events of last spring. We see developments in the southern neighbourhood as a catalyst for change and an opportunity for economic and social development in the region. We welcome the strong EU focus on promoting an open civil society, with its emphasis on democracy-building, equality and the promotion of the rights of women and minorities.

A key feature of the EU's support to countries in the region is the strong commitment to offer more assistance to those partners who make greater progress towards democratic reform, that is, the more for more syndrome. Those countries that are moving ahead on democratic reforms and good governance are being offered better funding for projects which aim to improve economic growth and boost job creation.

Progress has also been made on the negotiation of deep and comprehensive free trade agreements with countries in the region. The European Council will call for rapid progress in ongoing trade negotiations so as to open up the way for the region's companies and businesses to enjoy greater access to EU markets for their goods and services.

The situation in Syria is one of the utmost gravity which has attracted the almost universal condemnation of the international community. In chilling detail, the Independent International Commission of Inquiry report released last week documents patterns of summary executions, arbitrary arrests, torture, enforce disappearances and violations of children's rights. In the past month, the Syrian Army has escalated its violent attacks, including indiscriminate and relentless bombings, particularly against civilian areas in the city of Homs and the northern province of Idlib. There are thousands of trapped civilians, under merciless assault from their own Government, who urgently require protection and humanitarian assistance.

Ireland has been working intensively with the EU, the UN, the Arab League and other partners in the international community to compel the Syrian regime, through a series of robust economic, political and diplomatic measures, to cease its appalling attacks on the Syrian people. The European Council will strongly endorse the decision of the EU Foreign Affairs Council on 27 February to enforce additional sanctions, including against the Central Bank of Syria, on top of the extensive existing EU sanctions against Syria which already include a ban on oil imports.

I expect the Council conclusions will also voice strong support for the leadership displayed by the Arab League to date, including its peace plan outlined last November and which still provides the best basis for achieving a resolution. The conclusions must also call for a strongly-worded Security Council resolution, which would be a uniquely powerful and resonant demonstration of concern on the part of the international community and would add significantly to the pressure on the Assad regime.

An Ceann Comhairle

Is it agreed that the Taoiseach be given additional time to complete his statement? Agreed.

The Taoiseach

The Foreign Affairs Council and the General Affairs Council considered the issue of granting EU candidate status to Serbia earlier this week. The European Council considered this issue in December but deferred taking a decision until further progress was shown in the dialogue between Belgrade and Pristina. I am pleased to report that sufficient progress has been shown in the dialogue, with a number of agreements reached last week which will contribute towards the normalisation of relations between Serbia and Kosovo. The General Affairs Council has therefore recommended that the European Council grant Serbia candidate status. Ireland supports this decision and I would expect to see the Council confirm candidate status on Friday.

I would like to take this opportunity to commend the Governments of Serbia and Kosovo on the courageous steps they have taken in recent months. I also welcome the decision to launch a feasibility study for a stabilisation and association agreement with Kosovo. Ireland remains committed to the European perspective of all the Western Balkans countries.

We may also address the issue of the accession of Bulgaria and Romania to Schengen. We would support the Presidency compromise proposal in order to see a resolution of this matter which has now been outstanding for quite some time.

Another piece of business which this meeting of the European Council will deal with is the election of the President of the European Council for a two and a half year term from the middle of this year. It has had the benefit of the deft and highly effective stewardship of Herman Van Rompuy since his election to the post at the end of 2009, and I look forward to his continued very able guidance for a further term. Similarly, I expect he will also be appointed to the position of President of the euro summit meetings which will from now on take place at least twice a year. I support this step also.

On Thursday morning I will take part in the Tripartite Social Summit for Growth and Employment. It is a forum for dialogue between the EU institutions and the main European employers and trade union organisations, and takes place just ahead of the March and October European Councils. The theme for this meeting is social dialogue as a key instrument for restoring growth and jobs.

The meeting will be co-chaired by President Van Rompuy, President Barroso and Prime Minister Thorning-Smith of Denmark. The Heads of Government of the two upcoming Presidencies are also invited. This will be the first such summit I have attended. Representatives of IBEC and ICTU will also take part. Tomorrow's summit will be a useful preparation for our 2013 Presidency, as I will co-chair this summit before the March European Council next year.

In the margins of this meeting of the European Council on Friday morning, the new treaty on stability, coordination and governance in the economic and monetary union will be signed. I will sign, subject to ratification, for Ireland. Ratification procedures will then begin in each of the 25 contracting parties, according to their respective national requirements.

As I announced in this House yesterday, in light of the advice of the Attorney General, the Government has decided to hold a referendum on this issue in which our people will be asked to authorise the ratification of this treaty. I have every confidence that, armed with appropriate information concerning the contents and implications of this new treaty, the Irish people will endorse it emphatically by voting Yes to continued and sustained economic recovery and stability, and to our continued commitment to the success of the euro. I look forward to the debate ahead. I will naturally brief my colleagues during the forthcoming European Council meeting on the Government's decision to hold a referendum on the new treaty.

I thank the Ceann Comhairle for his indulgence in going over my time. I am satisfied that at this meeting of the European Council, we will be undertaking our business in a considered and workmanlike way. Do not misunderstand me, Europe and the euro area continue to face momentous challenges. As the Members of this House and as the people of our country know only too well, this crisis is not yet behind us, but critically, we are now moving in the right direction. Each time we meet, we are building another stage on the path to recovery. Our new intergovernmental treaty will be signed this Friday and the new programme for Greece has been agreed. The financial markets have calmed, bond spreads have narrowed and growth and jobs are front and centre. While there is more that needs to be done, we are heading in the right direction, getting there step by step.

We are taking the tough decisions necessary to secure consolidation, but we are now taking a balanced approach, including by focusing on the growth and job creation agenda critical to Europe's recovery. Approaching this European Council meeting in a non-crisis mode is a welcome development and the outcome will, I hope, be all the better for it. I will report to the House fully after the meeting.

I thank the Opposition leaders for allowing me an extra few minutes.

Deputy Micheál Martin

This week's summit has a number of important items on the agenda but only one will receive any real attention. The formal signing of the fiscal treaty will be accompanied by further discussions about the economic crisis. While the sense of panic which prevailed during most of last year's summits is absent, there is still an unmistakable sense of crisis. My main concern is that this sense of crisis be clearly accompanied by the urgency and ambition that Europe needs.

The agenda is a partial agenda which will not tackle the recession or restore confidence. The fiscal treaty is not the answer to Europe's problems, but it is part of the answer. The question for the Government today is whether it is willing to start demanding the other measures, ones which can return Europe to growth. If it is not, it will, sooner rather than later, face a much bigger crisis.

There is a sense of complacency in the agenda for this summit, with minor initiatives being over-sold yet again. The Government's decision to agree to hold a referendum is welcome. It is at best unfortunate that this decision took so long and gave the clear and unmistakable picture of the Government trying to find a way of not consulting the people.

This is a Government that puts great store on media management. It is becoming increasingly clear that no matter how slick and controlled the launches and speeches are, the public is not convinced. There is a large and growing gap between the view promoted by the Government in the Leinster House bubble and the opinion of the public. The addiction to over-spinning and over-claiming on nearly everything has been seen through. We heard more of the same yesterday in the Tánaiste's contribution, where the unrestrained self-praise was exactly the wrong tone to start a process of trying to win the people's support.

This is what we saw last year when a Greek debt deal was extended to Ireland and hailed by Ministers as a great negotiating victory although it was four times the size of what had been asked for. It is exactly the same approach that emerged in this morning's newspapers, with Ministers trying to claim this referendum as part of an ingenious negotiating strategy concerning the promissory notes.

Saying that the Government is "putting it up" to other governments is nothing more than empty posturing. It is fooling no one and it has returned levels of distrust in government to levels the Taoiseach himself condemned as unacceptable.

When this treaty is signed, it will have been almost eight months since it was agreed by Europe's leaders to consider new treaty provisions. It was prepared in a rushed process which limited ambition and maximised disagreements. The biggest problem in Ireland has been that the Government chose to have no public or political consultation. It would not even tell the Dáil what its negotiating objectives were.

Allied to this was the undeniable evidence from sources here and in Europe's capitals that every effort was being made to avoid a referendum. It would have been much better if it had accepted my proposal of three months ago to say that the needs of democratic legitimacy would prevail. A referendum was always necessary, irrespective of the legal opinion.

The Government has yet to publish the Attorney General's opinion. It should do so immediately because it will provide crucial information about the impact in Ireland of the treaty's provisions. From what the Taoiseach said yesterday, it is clear that the referendum is legally required because of there being no full EU treaty and the significance of the requirement to have "permanent" budget rules in national law. This is exactly in line with the legal opinion that Fianna Fáil received.

My party's position on Europe is and always has been absolutely clear. We believe in a strong European Union. We believe it has been a great force for peace and growth. Our supporters have been absolutely consistent in supporting each European treaty and supporting our pro-EU position. A Euro-positive position is a core part of our tradition and this will not change.

I held a detailed discussion in our parliamentary party about our approach to this international treaty. I did not impose my opinion but I did set out a detailed case secured endorsement of it. In accordance with a tradition that goes back over 50 years, in line with the views of our members and supporters, and following a democratic decision of our parliamentary party, Fianna Fáil will support ratification of this treaty in the Dáil and in the referendum.

We will support ratification for a number of reasons. First, it is part of an agenda to show that Ireland and the rest of Europe are dealing with the escalating sovereign debt crisis. It is not a magic bullet that will tackle the crisis but it is a confidence building measure. Second, it provides access to a reserve of back-up funding which will help Ireland to return to the market and do so at a lower interest rate. There is no other funding available if we cannot access the market or do so at an affordable rate. With regard to funding deficits and securing normal re-financing, we need the ESM and, therefore, we need the treaty. If the impact of the Government's VAT increase continues, as we predicted, to drive down growth and undermine the budget, the ESM may become vital to funding public services in the next two years.

We support the introduction of fiscal rules. They make sense and I have not heard a credible argument against them. It was the late Mr. Brian Lenihan who first put them on the Dáil's agenda in the first half of 2010, long before the EU-IMF deal. He subsequently brought to Government an in-principle agreement to proceed with fiscal control legislation and an independent fiscal advisory council. The rules contained in the treaty closely reflect what we supported before and we are not going to switch our position.

Each of these is a positive reason to support the treaty. They stand in contrast to the tone that Ministers set in the past two months. This treaty will not pass if it is sold in an aggressive way. People must be given positive reasons for supporting it. They must be shown that it is a part of the agenda to restore growth to Europe and ensure that Irish public services can be funded. The standard line being used by its opponents is that it is an austerity treaty. It does not matter how often they repeat this; it is just not true.

There is a major gap between tax revenues and spending on public services. This must continue to be reduced. It is nothing less than dishonest to claim we can carry on regardless or that everything would be easy if we defaulted on a bit more debt. It is a classic piece of political cynicism to claim in the House that there is an easy answer, that the money would just be available to pay pensions and keep services going. That is nothing more than the politics of exploiting people's problems.

There are four more budgets in the life of this Dáil and none of them will be significantly tougher because of this treaty. In fact, they may be easier. If the treaty helps to keep our costs of borrowing down, then it will provide significantly extra room to maintain public services.

A core justification for the treaty is that it will help save the euro. It cannot do this by itself; other measures are also needed. What is surprising is that the Government has yet to actually set out a case for why we should retain the euro.

The overwhelming evidence is that any attempt to adopt a new currency would make the current crisis look like a boom time. The transition to any new arrangement would be deeply traumatic and it is ordinary people who would feel it and bear the brunt most. However, we need to push this reasoning to the side since membership of the euro cannot be sold on fear alone. What can the euro's long-term future be if its main justification is that countries have no alternative and are trapped? Fostering resentment of a currency among the people who use it is not a way to secure its future.

There is a positive case which can and must be made for both the success of the euro and its future. The evidence shows that the euro has enabled significant growth throughout the Union that has been maintained even after the declines of the last few years. Some of the countries that have benefitted the most have been rather reluctant to acknowledge the euro's role.

In Ireland, the story is even clearer.

For example, a study released in December by ESRI and Trinity College researchers concluded that the adoption of the euro has had a significant and positive impact on our exports to all regions, which has increased over time. They showed how it has given a boost in markets which ranges from 30% to 60%. Given the centrality of exports to our economy, this in itself is a powerful argument for saving the euro. Without the euro, our already too high unemployment would be dramatically higher.

The key part of securing the people's support for European treaties has been work to provide clear reassurance on legitimate areas of concern. In each ratification process, additional measures have been adopted which go beyond the core text. These measures are never enough to satisfy Europe's opponents who see a conspiracy in everything. They do not care what arguments they use or who they work with. This is how in the Nice referendum, for example, one could end up with left-wing groups and Youth Defence sitting down under the co-ordination of Anthony Coughlan to discuss how to help each other. Where they always get caught out is that they never change their arguments to reflect the proposals before the people. In the first Lisbon treaty they said Ireland's loss of an EU commissioner was fundamental, whereas in the revised proposal they said the retention of a commissioner was irrelevant.

After the 2008 referendum, I faced quite an amount of pressure to try to find a way of avoiding a referendum. I rejected this and secured agreement to engage with the people and reflect their views in a significantly revised proposal. It is not true that the "Yes" vote always declines during a campaign. As we saw then, it can actually increase if the people are properly engaged.

The Taoiseach

Agreed.

Deputy Micheál Martin

Sinn Féin and others are trying to sell the idea that the claims about jobs in the last referendum have been proven false. This is nonsense. Ireland has too high unemployment, but it would be much higher if we had rejected the revised Lisbon referendum. Unlike Sinn Féin and others, I have actually spent a lot of time talking to major investors in Ireland. Every single one of them said to me that investment in Ireland would be lower if we stepped away from the tradition of joining with the advances of the European Union.

Deputy Adams came in here a few months ago and made the incredible claim that his party had been right about Europe for 40 years. If he wants to attack others for their claims during referendums, maybe he could tell us where the nuclear missiles are that he said would be rumbling down O'Connell Street. Where is the conscription that he has spent 40 years telling us was around the corner? Where is there a single major employer who says they will hire more people if we oppose Europe?

Having wasted months, the Government needs to commit today to a programme of real and non-partisan engagement with the public. They need to put aside the aggressive politics which they have introduced into European debates and start a genuine engagement with other pro-Europe parties and the public as a whole. It is mildly ridiculous that the Government has spent a year claiming that the standing of Europe has been destroyed, but has launched only one new EU information programme. This is worthy, but it is directed at children under 12 and is not central to the debates of today.

I want to acknowledge that the Taoiseach has in the last fortnight engaged constructively. I welcome this and I am now calling for a specific series of measures which we should discuss and introduce before the referendum Bill is passed. It is the Government's duty to publish a detailed White Paper which will set out all the issues concerning this treaty and its impact. This must be done well in advance of a Second Stage debate. It should also move quickly to empower the Referendum Commission to begin preparatory work. The ratification Bill must be accompanied by measures which show that this is not the end of the process. There must be measures concerning growth and investment. There must also be a commitment to never again negotiate a treaty in this rushed, secretive and incomplete way.

We believe, therefore, that a formal EU consultation Bill should be introduced, which sets out a process by which the public and the Dáil will be guaranteed a right of consultation in treaty negotiations. We introduced a similar measure relating to EU legislation and this is making a big impact. It should not be the case that the only area where consultation is not required is the most important one of all.

The Oireachtas should adopt a formal negotiating mandate for the Government to seek further treaty changes targeted at the clear design flaws in the euro, which are suppressing growth and employment. This is something which is done in other countries and it would significantly strengthen the Government's hand in negotiations which are obliged to begin once this treaty is ratified.

Ireland must take a more assertive approach to bank-related debts. Last year's policy of talking tough when briefing journalists but leaving the issue off the agenda of summits was foolish. There will be progress on the promissory notes because there must be for the sake of genuine debt sustainability, and because it will have no adverse impact on the wider European economy. This is exactly why it was designed in this way and is entirely separate from sovereign bonds.

This is a referendum which I believe can be won and won comfortably. If the Government is willing to put aside its hyper-partisan and self-congratulatory approach to everything, I have no doubt that a positive message can get across to the people.

As regards the rest of the Council's agenda, we support the Union further toughening its position on Syria. The widespread slaughter of people who want nothing more than a say in the future of their country must be opposed. The regime must be told that there is no way back to the international community and significant support should be given to the opposition. Equally, the Union has a responsibility to increase its support for the democratic forces in other countries that have overthrown dictators but still seek stability.

The summit will also agree a position relating to the G8 and G20 meetings. Those groups are becoming increasingly vocal on the fact that Europe has the means to solve its own problems if it just puts aside rigid policies and orthodoxies. They want a more aggressive policy of supporting sovereign bonds and they are right in this. The Taoiseach should insist that the EU's position at these summits be distinct from that of the members who attend in their own right. It is time to end the timid approach to tackling the crisis. Europe can overcome the crisis and return strongly to growth and job creation, but it can only do so if its leaders begin to show more ambition and generosity.

Deputy Gerry Adams

Yesterday, the Taoiseach reluctantly bowed to the democratic imperative and the right of citizens to vote in a referendum on the austerity treaty. Most of my remarks will focus on that treaty because it will have a profound and long-lasting impact on the people of this State and across the island.

Tá an reifreann seo fógraithe ag an Taoiseach ach ní toisc gurb é sin an rud ceart le déanamh - agus tá a fhios sin ag an Taoiseach - ach de bharr go bhfuil an conradh atá le síniú aige chomh forleathan agus chomh bunreachtúil sin nach raibh aon rogha aige.

The Taoiseach said he wants to be the Taoiseach who retrieves Ireland's economic sovereignty, yet he asks citizens to vote in favour of a treaty that hands significant new powers over to the European Court of Justice and the European Commission. These powers will allow these institutions to impose economic policies on democratically elected Governments and to impose heavy fines where they believe these policies have not been adhered to. How can the Taoiseach claim to be for restoring sovereignty while giving away important Irish fiscal and budgetary powers to unelected bureaucrats?

I am not surprised by the Taoiseach's support for this treaty or indeed Fianna Fáil's - most of Fianna Fáil anyway. Fianna Fáil is in something of a dilemma. The party leader has spelt out his party's support for the treaty while its deputy leader has refused to commit himself to voting for the treaty. What does the Fianna Fáil leadership do in these circumstances? It attacks Sinn Féin.

It is no accident either that Fianna Fáil, Labour and Fine Gael were all part of the cosy consensus for cuts and that this Government is dutifully implementing the economic policies of the last Fianna Fáil-led Government. All three have advocated cuts to public services and to the imposition of stealth taxes as the way of tackling the financial crisis. Sinn Féin believes if ratified, this austerity treaty will have a profound and adverse impact on the economy and people for decades to come.

Irish economic growth forecasts have been downgraded continuously. At the beginning of February, the Central Bank lowered economic growth forecast for this year from 1.8% to 0.5% while the Economic and Social Research Institute predicts growth of only 0.9%. Tá na figiúirí seo ag tabhairt dúshláin dháiríre don Rialtas agus, níos tábhachtaí, ar son mheas an ghéilleagar Éireannaigh agus ar son dhul chun cinn. The reality is austerity is not working.

Earlier the Taoiseach said, "Approaching this European Council meeting in a non-crisis mode is a welcome development". I sometimes wonder in what world taoisigh live. Is it a non-crisis when 500,000 people are unemployed? When one considers the cuts to essential public services and their consequences, the numbers of young people leaving our shores, the cuts to DEIS schools, the slashing of school guidance counsellors, the attack on rural communities, families in mortgage distress, the crisis in our health service and the imposition of cuts to community employment schemes, anyone with any sense would know we are in a crisis.

Recent figures confirmed what many of us on the Sinn Féin benches have been saying for some time. The Government's austerity taxes are disproportionately impacting on lower and middle income families, yet the Government has plans to cut a further €8.6 billion from the economy in the next three years to meet the troika deficit target of 3%. The austerity treaty demands that this be reduced to a 0.5% target. At some point, will the Taoiseach explain how he intends to accomplish this? It has been predicted this will mean a further €6 billion in cuts and new taxes. The people cannot afford this treaty.

I know the Taoiseach is busy having a conversation with his colleague but there is an alternative approach if he cares to hear it.

The Taoiseach

Tá mé ag éisteacht leis an Teachta. Cloisim é.

Deputy Gerry Adams

Tá sin go hiontach. B'fhéidir gur féidir leis rud éigin a fhoghlaim. Molaim dó éisteacht go cúramach liom.

What is needed is a strategy for jobs and growth through stimulus. There are 23 million citizens unemployed across the EU but this treaty will not mean one additional cent has been allocated to job creation.

The Taoiseach

There are also 23 million small and medium-sized enterprises.

Deputy Gerry Adams

The Government and the EU have proposed a treaty which deals with none of the problems facing Europe. It does not deal with the debt crisis, the banking crisis or the unemployment crisis. There are solutions, however.

As I said, we need investment in jobs and growth. I know the Government has pilfered most of it but we still have a National Pensions Reserve Fund of €5.3 billion. This should be combined with the resources of the European Investment Bank to invest in various projects to get our people back to work. The European banking system must be cleansed of toxic debts through a new round of rigorous stress tests and deleveraging followed by recapitalisation where necessary funded by the European Central Bank. Debt-restructuring agreements must be introduced for over indebted economies involving debt write-downs to assist them return to debt sustainability. This would also allow the State to end the €3.1 billion annual payment to Anglo Irish Bank which will cost the Irish taxpayers up to €65 billion before it concludes in 20 years.

Has the Government not considered any of these suggestions? The Taoiseach is not a stupid man. Has anyone at Cabinet considered that we cannot afford this treaty?

The Taoiseach

The man beside Deputy Adams - Deputy Pádraig Mac Lochlainn – was asked earlier how he was going to pay everyone in the public service if we decided not make these payments.

Deputy Gerry Adams

The Taoiseach earlier refused to answer any of my questions around the bank formerly known as Anglo Irish Bank and yesterday refused to answer my questions on a conflict of interest with those in NAMA. I have to make my mind up on why he does this. It is unjustifiable the people should have to pick up the bill for all of this and at such a cost.

I call on the Taoiseach again not to pay the €3.1 billion to a zombie bank at the end of March. He should simply refuse to pay it. It is not contained in the memorandum of understanding with the troika or any of the other measures in which the Government has been involved. We simply cannot afford it.

Within existing EU treaty provisions, the European Council must ensure the ECB - which has a responsibility in this - takes all necessary action to stabilise sovereign bond interest rates and ensure market access for all member states. On the day after the treaty was agreed, the EU released its youth unemployment statistics but it did not release any strategy for dealing with this unemployment reality for our young people. Almost one third of young people in this country and almost half of young Spanish people are out of work. Thousands of young people, not least from the Taoiseach's own constituency and not least from the west, have to leave the State every week to try to make a living elsewhere. The austerity treaty will only make this dire situation worse. It is not right, just nor fair that working people have to pay for the greed, corruption and bad government that led to the economic crisis or the debts created by the golden circle - the big bankers, bondholders and developers.

We will fight the campaign against the treaty within Sinn Féin and across the electorate, who are very sophisticated. The people understand these matters a lot more than the conservative parties give them credit for. I have every faith in the wisdom of the people, their sophistication and ability to come up with the right decision on the future, whether it will be a future of austerity in perpetuity or a new Ireland, a new republic, a just Ireland, one in which equality is valued and the people are valued.

Deputy Mick Wallace

I wish to share time with Deputies Boyd Barrett and Ross.

Acting Chairman (Deputy Olivia Mitchell)

Is that agreed? Agreed.

Deputy Mick Wallace

When the Taoiseach goes to Europe for the European Council meeting, if he gets the opportunity I urge him to ask Chancellor Angela Merkel if she believes that the latest Greek bailout will work, given that it will probably deepen the recession, cause greater unemployment and social unrest. The European Union's prediction is that the Greek economy will only contract by 4.3% this year, 0% next year and will grow by 2% in the following years up to 2020. The Greek economy is contracting at present by 7% and I do not think anyone believes those figures. I would like to hear a direct answer from Chancellor Merkel on the issue.

From the Irish point of view the Council meeting will be very much dominated by the decision to hold a referendum, which I welcome. There should be greater participation of citizens in decisions made in this country. Having a vote once every five years is not enough for citizens. I welcome the decision to allow a referendum, which will be about many things for different people, such as the austerity economics and the insistence that governments should slash spending in the face of high unemployment which has been all the rage with most governments in Europe in recent times. I am not sure people in this country are fond of that.

I am not sure what kind of country the Taoiseach has planned for us but people will have a say on what kind of country they want. While austerity might not do any harm to the export market or fiscal matters, it is killing the domestic market. The domestic economy, which is responsible for 90% of employment in this country, is going down the tubes. We will not have serious recovery until we deal with issues that directly concern the domestic economy.

We must also ask whether we want more or fewer decisions made in Europe. Of late, Chancellor Merkel and President Sarkozy have met in advance of the European Council meetings. It is as if we do not have much say anymore. No doubt the fiscal compact will cede more power to Europe and fewer decisions will be made in this country. I am not sure that is what the people of this country want. In fairness, they will have a decision to make and it is their call.

On whether we want more or less democracy, there is a serious democratic deficit in Europe at the moment and it seems to be on the increase. If Chancellor Merkel has her way we will go further away from real democracy. Sadly, a directly elected European Parliament has failed to bridge the divide between the people and the European Union. I am not sure what the answer is, but I do not consider that the EU is functioning in the manner we anticipated.

Will the Government accept the vote of the people, be it "Yes" or "No" or will we be asked to vote again if we do not get the right answer the first time? It would be interesting to hear the Government make a pronouncement in that regard in advance of the referendum.

The bank bailout is an issue for people. Taxpayer-funded capital injections into otherwise bankrupt banks are bailouts but the country did not get a bailout. We have loans that we are expected to pay back. It is disingenuous to call what the country received, a bailout, in contrast to what the banks are getting. Unfortunately, the main reason the banks got a bailout from the taxpayer and the country got it in turn was in order to ensure that the European banks got repaid.

It is a big concern that the treaty is not the end of the European programme, it is more like a new beginning. We are told that Paris and Berlin are awash with blueprints for what amounts to a eurozone finance ministry with the power to co-ordinate budget and economic policies. Such plans require far more sovereignty to be ceded than will the treaty to be put to the people in a referendum. People must realise that we are going in a new direction if we decide to vote in favour of the fiscal treaty.

Deputy Richard Boyd Barrett

When the German Minister for European Affairs was in Dublin he confirmed that the Government conspired with our so-called European partners to try to avoid a referendum and deny the people of this country the right to have a say on this treaty that will have such far-reaching effects. The Constitution has saved democracy and the right of citizens in this country to have a say despite the conspiring and manoeuvring with our so-called European partners. It says everything about the austerity agenda being pursued by Europe and the thrust of this treaty, which is just the latest instalment in the austerity agenda, that we have already seen two elected prime ministers deposed in order to ram through the policy of bailing out banks and inflicting austerity on the citizens of Europe, and that the Government then also conspired with our European partners to try to prevent a referendum in this country. However, thankfully, the Constitution has ensured that the people will have their say.

Therefore, we must discuss the substance of the treaty, which is very simple. It seeks to deny democratically elected governments the right to borrow, virtually at all. To deny that right at any time to invest in jobs, infrastructure, industrial development, and economic and social development is madness. It is anti-democratic and it is economically stupid, but to do it at a time of recession is crazy. The evidence is clear everywhere. It is not just the left that is saying this, mainstream and prominent economists across the world are saying that especially in times of recession one needs flexibility to be able to borrow to invest in the economy, to provide stimulus. The treaty denies us the right to do so.

The evidence of what the policy is resulting in is everywhere across Europe, most dramatically in Greece. Greece is in trouble, not because it resisted the austerity agenda - the people resisted it - but because the Greek Government capitulated to the austerity agenda and the result has been catastrophic for the people of Greece and for its economy, which has collapsed under the impact. Those same consequences are now becoming clear in this country with the downgrading of growth forecasts for this economy and now for the entire European economy. Austerity is suffocating our economy and the European economy and choking off any possibility of economic growth and development.

The supreme irony and hypocrisy of the treaty is that it tells us that, on the one hand, we cannot borrow to invest in jobs, nor in industrial, economic, social or infrastructural development and, on the other, we must borrow tens of billions of euro to pay off the gambling debts of casino banks and financial institutions. It is one law for the people, their futures and jobs and the prospect of economic growth and another for the banks and financial institutions. We must borrow at a desperate cost to the country to pay off the bankers and speculators but under no circumstances will we be allowed to borrow to fund job creation or economic and industrial development measures, which are precisely what we need to offer us a way out of the crisis.

Acting Chairman (Deputy Olivia Mitchell)

The Deputy's time has concluded.

Deputy Richard Boyd Barrett

There is no point in appealing to the Government but we will appeal to the people strongly to say "No" to this austerity agenda and to fight for a different type of Europe. It is not a question of being in or out of Europe, but of a social Europe with an economic future.

Deputy Shane Ross

God bless the Attorney General. It is refreshing to find that an officer of the State is prepared to take a decision that is patently against the wishes of the Government. She has given the people an opportunity to make a decision and the House to hold a debate that would otherwise not take place. This is not a political point but holding a referendum is against the Government's wishes. It is an encouraging sign that, in some cases, the separation of power exists within the Cabinet.

The Taoiseach should view the referendum as an opportunity. Now that he is lumbered with it, what will he do with it? He should go to Brussels tonight with the view that his hand has been strengthened, not weakened. An enormous amount of trouble was taken in Europe to ensure that Ireland, which is regarded as a troublesome and truculent nation in many ways, would not have an opportunity to torpedo, albeit not sink, the treaty.

The Taoiseach should warn the other Heads of State tonight and tomorrow that there is a real danger to them of Ireland rejecting the treaty. He should use it as leverage for getting something that we would not otherwise get. We have constantly sought an opening or leverage to write down the debt with which we were saddled willy-nilly by the last Government - the Taoiseach was right in that respect - and possibly by the banks and developers. Deputy Boyd Barrett addressed that point. If the Taoiseach openly or, if he preferred, quietly started to negotiate for major concessions in the form of a write-off of the Anglo Irish Bank promissory notes, passing this referendum would be much easier. This is the sort of language that Europe understands. It would be the first time that Ireland stood up for itself in Europe and said that if Europe did not give us this, we would not give it that.

There is no moral or pragmatic justification for repaying these bills. People will make a clear link between what Deputy Boyd Barrett rightly called a series of austerity budgets and treaties and Anglo Irish Bank's promissory notes and bondholders. If we can write off the debt, we can assure the Irish people that there will be less austerity.

I do not want the Taoiseach and the Tánaiste, or whoever is with the Taoiseach, reporting that they rubber-stamped the treaty simply because that is how Ireland behaves in Europe. It may be difficult for the Taoiseach but the referendum gives him leverage. It is a threat. He does not need to go cap in hand to Europe today, tomorrow and Friday. He can tell Europe that the people, who do not like this treaty or its terms, are behind him. He can tell Europe that returning some of our economic sovereignty and writing off some of the debt would make delivering on the referendum easier. It is difficult for him to respond to this practical suggestion publicly, given that these negotiations are held behind closed doors. For the first time, however, he has leverage in Europe. I beg him to use it.

Tánaiste and Minister for Foreign Affairs and Trade (Deputy Eamon Gilmore)

I welcome and appreciate Deputies' contributions to this debate, although I do not share some of their sentiments. As our national Parliament, the Houses of the Oireachtas are the right and proper place for an informed and measured debate on our engagement with our partners and neighbours in Europe. As there will be ample opportunity later today and during the coming period to address in detail the issue of the new intergovernmental treaty and the forthcoming referendum, I will confine myself in these remarks to the European Council meeting itself and to the significant issues it will address during the next two days.

This week's meeting of European leaders will address economic policy first and foremost. As a result of some recent positive developments, including the agreement on the second package for Greece, it will be the first such meeting for a considerable time to he held against a backdrop of calm. This is most encouraging. As I have often stated, Ireland's recovery depends on a return to stability and confidence. Europe is not out of the woods yet and important decisions remain to be taken, including on the strength of our firewalls. Collectively, however, we are on the right track.

The spring European Council meeting is the traditional opportunity for leaders to take stock of where we are in terms of economic policy in Europe. I am satisfied that, due to the proactive steps taken by the Government in concert with like-minded partners, we have ensured that this week's engagement will be framed in a balanced and realistic manner. We have consistently highlighted that the solution to the economic and financial crisis cannot be delivered by fiscal consolidation alone. We have been at the forefront of the member states that have clearly and consistently put the case that, in order to move beyond crisis, Europe must also focus on concrete measures to support a return to sustainable job creation and economic growth. Without job-creating growth, the challenge of getting back on track will be more difficult. It is the lever that will help us lift the substantial burdens we face. As has been the case at home in Ireland, these two elements must happen side by side in Europe.

We are meeting the commitments of our programme on time and in full, which is recognised and acknowledged internationally, including by the financial markets. The improved perception of Ireland, which we have been working hard for the past 12 months to develop, is not some kind of vanity project or beauty contest entered into for its own sake. International reputation matters. As a small, open economy dependent on trade, improved sentiment towards Ireland delivers real results in terms of restoring investor confidence, which reduces the cost of our borrowing, and attracting inward investment, which delivers growth and jobs to cities, towns and villages.

This week's meeting of the European Council will also agree on the EU's approach to a number of forthcoming international summit meetings. EU priorities will be agreed for the forthcoming G8 and G20 summits taking place in May and June, respectively. It is to be welcomed that a common EU approach is agreed for these meetings where Ireland is not a direct participant. Key principles will also be agreed for the EU's preparation for the UN Rio +20 conference on sustainable development, which will be held in mid-June.

In the foreign policy sphere, as well as considering developments in the EU's southern neighbourhood 12 months after the Arab Spring, the European Council will also address the developing situation in Syria. Last Friday, I attended the initial meeting of the Friends of Syria group in Tunis. I was struck by the broad based support within the international community for a resolution to this pressing situation.

This is not a case of Europe or the west trying to dictate the outcome. I salute the leadership being shown by the Arab League and look forward to strong European Council conclusions which reflect the urgency and gravity of the humanitarian crisis that President Assad's regime has inflicted on its own people and which will add to the growing international political and economic pressure. Building on the friends of Syrian people meeting, the Council will call for an end to the violence, access to humanitarian aid and the start of a peaceful and inclusive transition.

On behalf of the Government I welcome the agreement reached yesterday at the General Affairs Council to recommend that the European Council grant candidate status to Serbia. Ireland fully supports this decision and we look forward to its confirmation by the European Council on Friday. I also look forward to the outcome of this week's meeting of the Council in respect of the range of issues it will consider. This House will, of course, have an opportunity to debate these issues once the meeting has concluded.

Dáil Éireann díospóireacht - Wednesday, 29 Feb 2012

European Council: Statements

Dáil Éireann díospóireacht -
Wednesday, 29 Feb 2012