Micheál Martin (Cork South Central, Fianna Fail) | Oireachtas source

I am entirely correct.

All that is left is the hope that Europe will again turn up with something which will make up for the failures in budget planning.

As I have said previously, I believe there will be a deal in respect of the promissory note. The justice of the Irish case demands an outcome which would lengthen the term and reduce the rate to halve the impact of repayments on the Irish deficit across a few decades. The case for Ireland has been repeatedly hampered by the refusal of the Government to put aside domestic politics. However the Taoiseach summed up our case well in Paris last October. He has not repeated this line since then, so perhaps it was an accidental slip on his part. Certainly, it was an unusually non-partisan point for him to make. He said: “Ireland was the first and only country which had a European position imposed upon it in the sense that there wasn’t the opportunity, if the government so wished, to do it their way by burning bondholders”.

Any deal which replicates the handling of the repayment made in January this year would be deeply unfair and cause serious economic damage. While the Tánaiste and the Minister for Communications Energy and Natural Resources, Deputy Pat Rabbitte, appear to believe we did not pay the promissory note in March, we paid it and received a "thank you" note from the ECB. The national debt continued to reflect the full value of the promissory notes but the interest paid out of current funding increased very significantly as a result of that deal. Millions of euro extra were incurred as a result. This muddling through will have to end and it should end in the next three months, yet so far the Government has refused to publish even a single sheet of paper setting out what it is seeking.

No technical papers have been provided and no details supplied. All we can be sure of, no matter what happens, is that the claims of Ministers cannot be taken at face value.

Since the rotating Presidency of the Council was created 40 years ago, it has been an absolute principle that the holder does not promote its unique national concerns. This Presidency will be significantly less influential than in the past because the Taoiseach will not lead the Council. The principle, however, will remain the same. Ireland is fortunate to have an excellent group of diplomats working on European issues in Brussels, Dublin and throughout our network of embassies. They are ably assisted by public servants in the various Departments who carry a heavy load of EU-related work. I have no doubt they will ensure that the Presidency is carried out to their usual, incredibly high standards of professionalism and effectiveness.

What is unhelpful, however, is when members of the Government seek to grandstand at home in an attempt to impress people with sabre-rattling about using the Presidency to secure Ireland's goal. I agree with the Minister of State, Deputy Lucinda Creighton, that Ireland being asked to chair the Organisation for Security and Co-operation in Europe was a mark of the high esteem in which we are held by European colleagues. Of course, it is never acknowledged that this invitation issued a year before the Government took up office, yet another sign of the growing party politicisation of this area by Members opposite. In fact, I was Minister for Foreign Affairs when we were approached with a view to taking the chair of the OSCE, not only by fellow EU member states but by countries throughout the globe. The Taoiseach should instruct his Ministers to stop the empty grandstanding in the media. It has already caused us problems, with the German Government expressing displeasure at Dublin consistently over-spinning deals.

The summit deal in regard to the issue of banking union is a cause for major concern. Banking union has always encompassed three fundamental elements, namely, a single supervisory mechanism, a common system of guaranteeing deposits and a common system for closing down failed banks. All that has been agreed so far, however, is an incomplete supervisory mechanism, the operation of which is yet to be decided. Moreover, the new supervisory system will include only extremely large banks, meaning that fewer than 2% of the eurozone's banks will be covered. Certain leaders have pointed out that the new supervisor will be able to step in when banks get into trouble, an incredible observation given that the entire point of supervision is to prevent trouble in the first place. It also ignores the reality, as we know all too well from the experience at Anglo Irish Bank, that it is smaller, rapidly growing banks that nearly always cause the trouble. The €30 billion assets limit will become a target to be worked around by creative financial management. It amounts to a foolish capitulation of the principle that was supposed to have been agreed in June.

The resolution and deposit guarantee issues have been kicked down the road as a result of this summit and there is no sign whatsoever of a growing consensus. As one commentator pointed out on Sunday, the decision to exclude 98% of banks from direct supervision may have already scuppered the other elements of the banking union. This particular observer wrote, "If there are hardly any German banks in this new system, why should one expect Berlin to take part in a resolution system?” Europe's leaders left the summit patting themselves on the back for what they had agreed – we have had more of the same from the Taoiseach today – but, in reality, they may have fatally undermined a vital element in the effort to restore Europe's financial system.

If it were not for the President of the European Central Bank, Mr. Mario Draghi, there is no doubt that 2012 would have turned out to be the most destructive year in the Union's history. He deserves our gratitude for his intervention to prevent a potential economic meltdown. By stretching the ECB's remit to its very limit and facing down fundamentalist opponents, he did the citizens of Europe a great service. There is more he should have done, but his work in 2012 deserves our praise. By contrast, the political leaders of Europe have actually used his work to step back from taking urgent decisions. Even though an imminent collapse was avoided, so too were major forward steps avoided. This summit postponed every single major reform proposal for the future of economic and monetary union. Twelve months ago we were supposed to be committed to urgent, time-bound and radical action. As of last Friday, all radical actions have been removed from the agenda, there is no urgency and agreement is targeted for some indefinite time after the formation of the next Commission in late 2014.

This is not the leadership the people of Europe deserve. This is a clear betrayal - I recognise this is a strong description - of the spirit which built the EU and earned it the right to receive the Nobel peace prize. The leaders who attended to receive that award should be dissatisfied with their performance and should reflect on their behaviour in the past two years. They have presided over a collapse in public confidence in the European Union. They have engaged in selfish agendas and shown no ambition or ability to show consistent leadership. There must be no repetition of these failings in 2013. There should instead be a determined effort both to tackle fully the urgent economic issues and put in place a real framework for sustainable growth. A first step in this regard would be for all leaders to be open and honest in setting out their own proposals and ending the practice, which is now out of control in this Government, of caring only about the public relations strategy.

In regard to the foreign affairs agenda, I asked in advance of the summit last week that the Taoiseach raise the issue of the Israeli settlement policy as recently articulated, which has seen a major expansion of disputed settlements, and press for this activity to be condemned. I am disappointed that there was no reference to this in the Taoiseach's statement. These provocative actions could further delay the achievement of a peaceful two-state solution.

In conclusion, this was a complacent summit which may prove in time to have caused considerable long-term damage to the prospects of the Union.

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