Pádraig Mac Lochlainn (Donegal North East, Sinn Fein)

There is a financial crisis in Europe, one that is fast becoming a political farce. The spectacle of yet another Franco-German summit in recent days sends a clear message to the world about the current status of the European Union as a so-called partnership of equal sovereign states. Ireland's citizens have been forced to accept punishing austerity budget after budget over recent years. Along with the citizens of Greece and Portugal, we have been forced to bail out the banking system in the core, powerful European countries and have this labelled something else to the rest of the world.

Our elected political leaders are reduced to playing the bold child who must sit on the stairs until their disappointed parents are satisfied that they have learned their lesson. That is the level of influence this Government now has on EU policy. We were once in a lead role, but were reduced to the chorus line. It would now appear that we walked off the stage and now sit in the audience. We are spectators to the decision-making of others. This Government has allowed the partnership of equals that was Europe to be reduced to the sole ownership of Germany and France.

Last weekend, we were told of a Franco-German summit that would resolve the European crisis. Were we invited? Were our views sought? Was the Government consulted? By the end of the weekend, we were told that a deal had been reached that would resolve the crisis. Were our views sought? Was the Government consulted? We were then told that the summit was postponed and that no deal had been reached. Were our views sought? Was the Government consulted? A two-handed farce and we are the audience. We are now told that President Barroso has a plan, will unveil it today and will tell the Taoiseach tomorrow. Were our views sought and was the Government consulted by Barroso? A two-handed farce and now a one-man show. It would be funny if the stakes were not so high.

The economic and political world is looking in, wondering what is going on. What line will the EU agree to for the G20? Will it be the French way, the German way or President Barroso's way? We know for sure that it will not be Eamon Gilmore's and Labour's way. This lack of clarity at a European-wide level is matched only by the confusion within this Government. We have had the Taoiseach say "No" to treaty change, the Tánaiste claiming rather sheepishly that there is no need for a referendum but that the issues could be dealt with under the existing treaty and yesterday, the Minister of State, Deputy Creighton, opened the possibility of treaty change. While this circus is ongoing, we have unemployment continuing at 14.4%. Almost half of those on the live register have been unemployed for a year or more. We have 80,000 young people on the live register and at least 40,000 of our people are expected to emigrate this year.

I say to the Taoiseach that another way is possible. It is about putting the needs of our people before the needs of the bankers. A number of key steps must be taken at European and national level if we are to have any hope of delivering social and economic recovery. First of all, we need honesty, a word not used lightly in the banking world. We must honestly assess the level of banking undercapitalisation. The EU stress tests are not robust or honest, as demonstrated as one banking crisis follows another. On the basis of the most recent round of crisis meetings in Brussels and Frankfurt, it is clear that the critics of the European Banking Authority were right and that the extent of the black hole at the heart of European banking is not yet clear. Rigorous and compulsory stress tests are now required as a matter of urgency. Once we know the full extent of the problem, we can begin to act.

The banks must shoulder their responsibility. They must be forced to write down the cost of their bad debts as a prerequisite to any recapitalisation. The cost of recapitalisation should not be borne by ordinary taxpayers, particularly given the crippling levels of austerity being imposed on people across the EU.

This is an issue not only in respect of EU-wide debt. The same approach should also be applied by national Governments with regard to their own banking sectors. Sinn Féin has long argued for a significant write-down of banking debt imposed on the State by Fianna Fáil and maintained by this Fine Gael-Labour Government. The Greek Government has managed to secure significant private sector participation in its debt restructuring yet our Government has failed to secure the same. It is not credible for the Minister of Finance, on behalf of the Government, to claim that a similar deal cannot be secured for Ireland. The changes that have been achieved to date, which have led to some assistance to the Irish people, have been due to the crises in Greece, Portugal and Italy. Negotiating such a write-down, including the Anglo Irish Bank promissory note of over €74 billion, must be a priority for the Government in any talks on a long-term solution to the eurozone crisis.

Following a robust assessment of levels of debt and the debt write-down by banks, there is a need to begin the process of recapitalisation. An enlarged EFSF is not the vehicle for meeting the funding requirements of cleansed banks. Rather, the ECB must become the lender of last resort for the European banking system. The ECB is already performing this function in a number of countries, including in Ireland. Rather than printing euros to buy the bonds of European economies, the ECB would be better placed to redirect these facilities to stabilise the European banking system. These measures will only deal with the banking crisis. However, we need to promote economic growth and employment as complementary and concurrent to action taken to deliver jobs and economic growth.

The EU must once and for all abandon the orthodoxy of austerity. It is failing and leads only to hardship and recession. The banking crisis has led to a crisis of under investment. Each round of austerity further reduces investment in the domestic economy, forcing more people out of work. In the absence of private sector investment, we need the State to fill the investment vacuum. We need a Europe-wide stimulus programme to compliment stimulus programmes in individual member states. The European Investment Bank has twice the lending capacity of the World Bank. It must use that capacity with national Governments to increase the level of investment and create employment and build our infrastructure.

I have laid a path that must and should be followed at a national and European level. We have choices to make and we can continue as spectators to the farce that is enveloping the EU institutions. Regardless of our differences now, we share a common republican heritage, a republican heritage in which our leaders were told that no change was possible, that we were not in control of our destiny and that we should know our place. Yet history tells us that we always have choices to make and that these require leadership, determination and leading from the front. Wolfe Tone recognised it when he met with his comrades on Cave Hill in Belfast. The leaders of 1916 in Dublin knew that when they set out on Easter Sunday morning. Bobby Sands knew it as he lay alone in his hospital bed. The Taoiseach has highlighted what needs to be done in his speech to the Institute of Directors when he said: "We will regain our economic sovereignty. We will restore the good name of Ireland among the nations of the world. This is my mission. This is the Government's mission. This is our mission. And there will be no rest until we succeed." If we are to achieve this, we must begin to act. We must assert the interest of the Irish nation. We can put the brake on the idea that Europe is led by Germany and France. We can make it clear in the coming summit that we will not countenance further losses of sovereignty and that it is the will of the people of this sovereign State. It is not that of Germany, France, bankers or the President of the EU but the people and the Government must act on the will of the people. We will end the process of being spectators and will begin to assert our national interest. It is time that we began the process of shaping a Europe that serves the people and it is time for the Government to act and assert the will of the Irish people. Our sovereignty is not in the gift of others. We need to assert our sovereignty. I hope this Government will act but I travel more in hope than expectation.

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