Micheál Martin (Cork South Central, Fianna Fail)

This delayed summit marks the last chance for Europe's leaders to tackle the enormous and growing crisis which is facing the eurozone. Europe needs them to agree a dramatic package of supports and the revision of failed policies. The alternative is damage to the economic and political fabric of the Union which may take decades to undo. An unforgivable amount of time has been wasted by leaders seeking easy ways out or clever ways of appeasing national sentiment. The process of halting and half-hearted actions has managed to escalate the crisis. It is more than two months since it became clear that existing deals are inadequate and that the Greek situation could engulf Europe. The contagion which forced Ireland and Portugal out of the bond market has not been contained and confidence has not been recovered. Larger and more systemically important economies are now on the edge with rising concern about bank capitalisation adding an extra layer of instability.

There has been a succession of regular and emergency summits which issued claims to have drawn a line under the crisis. Each summit has been followed by the crisis becoming worse. Today, even Jean-Claude Trichet, the high priest of orthodox financial policy, is warning that Europe is on the edge of disaster. There is one overwhelming message before this summit, which is to act decisively or be prepared for the consequences. There is no room remaining for delay.

As the crisis has escalated so too have the measures required to defeat it. Europe needs the summit to deliver on a series of specific agreements. It must allow Greece to reduce its sovereign debts to a sustainable level; provide for the recapitalisation of banks in order to take account of these and other debt write-downs; ensure that the funds available are large enough to tackle all current and potential needs; commit to the reform of Euro governance which tackles the actual causes of the crisis; and end the destructive limiting of negotiations to a couple of the larger countries and begin to involve all member states.

The failure of Europe's leaders to have an inclusive and active dialogue is at the heart of the escalation of the crisis in recent months. Detailed discussions between France and Germany has always been a valuable part of achieving progress on big European issues. These two countries have often had conflicting policies but bilateral negotiations are essential in helping the functioning of the institutions of the Union. However, this co-operation has never been so exclusive of other countries and never before has it included issues which affect so many countries in such a profound way. No major reform of the Union has ever been achieved in this manner. It should be realised that European ideals cannot be reinforced by acting against them.

Since the beginning of the year there has been intensive contact between different countries in an effort to find a way forward. In February, the key principles were agreed, these being, debt sustainability, sound bank capitalisation, larger and more flexible funding and improved co-ordination. For reasons which are still unclear, the March 11 summit confirmed these principles but delayed their implementation. There were many fine statements about a resolve to act decisively but in reality there was little or no decisive action. The Ministers for Finance signally failed to finalise arrangements while market pressures were allowed to grow again.

The Heads and State and Government, who should have been holding an intensive series of meetings, stepped back and had few direct contacts. The Taoiseach's policy of non-intervention is more inexplicable today than ever. Seven months since taking up office, he has still not met a eurozone leader away from the margins of a major summit. In April he announced that he would lead a major diplomatic offensive but none has followed. In advance of the July summit he neither met nor telephoned any other leader. Having told the Dáil that he had not tabled proposals for the summit, he emerged from it claiming to have skilfully delivered an interest rate cut four times the level of what his Government had been asking for. Once again, spin rather than substance was the priority. The attempt to claim credit for actions taken has trumped the more difficult work of trying to shape events. The last time the Taoiseach had more than a snatched conversation with his good friend, Chancellor Merkel, was when he flew to Berlin for an electoral photo opportunity. Given that he has abandoned most of his policies from that time, the Chancellor is clearly in need of an update.

As the issues have become more serious, the leaders of Europe appear to be spending less time directly engaging with each other. Franco-German co-operation is welcome but it alone will solve nothing. The failure to consult others in a meaningful way makes it more difficult for governments in countries such as Slovakia and Finland to persuade parliaments and citizens to show solidarity with other countries. The Prime Minister of Slovakia has been left to sell a deal to Parliament in the face of a perception that this deal is being imposed on Slovakia. Given that there is no sense of the country having been involved properly in discussions, even pro-European Union parties feel free to attack it.

The Taoiseach's meeting with President Barroso is no substitute for an effort by him to promote Ireland's policies directly to other Heads of State and Government. Given that President Barroso has not been at either Franco-German summit, he is in no position to negotiate about its outcome. The Taoiseach should use this summit to insist on a return to the communitaire approach among leaders. If they do not get back to working together there can be no successful outcome.

The first item for agreement at the summit must be the substantial restructuring of Greek debt. The scale and pace of the budgetary adjustment being implemented by the Greek Government is enormous. There have been problems but yesterday's agreement with the EU and IMF confirms that Greece is moving forward with necessary adjustments. Greece's particular difficulties are being made significantly tougher because of the constraints of eurozone membership. The lack of the options of devaluation or unilateral restructuring puts a major limit on its ability to come out of the crisis. The attitude that everything is the fault of the Greeks shows an ignorance of the facts. Europe is Greece's problem just as Greece is Europe's problem. Helping Greece is a proper recognition of the duties of a currency union which freely admitted Greece as a member.

The contagion argument is bogus if restructuring is done at the same time as providing a credible firewall for others. The markets have traded for some time on the assumption of a partial default. A large section of the bondholders made purchases at rates which had default priced in. On a more fundamental level, the market can see when a debt is unsustainable. Denying the inevitable merely increases its likely impact.

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