Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

While this Bill has many pages in it, most of it is a copy of the agreement that has been reached at European level. This section and the other sections just approve that agreement in Irish law. I will just go through a couple of points on this section, which will probably deal with the issues with the overall Bill. I have outlined Sinn Féin's view on the changes to be made to the European Stability Mechanism, ESM, under this agreement. Some of these are positive and some are not. Some could cause serious issues in accessing different credit lines. We in Sinn Féin, and the Irish people more broadly, have a view on this. We are all too familiar with the conditions and austerity that were placed on the Irish people as part of the financial assistance programme following the crash of 2008 and 2009.

In this legislation, we see reforms regarding the memorandum of understanding on the precautionary credit line. This is replaced by a letter of intent to be submitted by a member state. In submitting that letter of intent, the member state would outline its main policy positions, which would then be assessed by the Commission. Despite symbolically abolishing the memorandum of understanding and replacing it with this letter of intent, the eligibility criteria are hardened so much that they effectively kill the instrument and put it out of reach for most European countries. That is the core concern we have in respect of this agreement.

Under Annex III, an ESM member qualifies for the precautionary condition credit line provided it meets the following criteria. It must not be under the excessive deficit procedure, it must have a general government deficit not exceeding 3% of GDP and it must have "a debt benchmark consisting of a general government debt to GDP ratio below 60% or a reduction in the differential with respect to 60% over the previous two years at an average rate of one twentieth per year". We have made the point that some of these criteria are outdated. Indeed, the ESM itself has suggested that the criteria need to be changed and yet we are enshrining an agreement subject to these criteria in Irish law. As we argued at the time, these were never the criteria we should have been using.

Let us consider these criteria. The credit line would obviously be called on during downturns. During the financial crisis, all eurozone members, with the exception of Luxembourg and Estonia, were under the excessive debt procedure. Is it then a credible criterion that a state cannot be under the deficit procedure? As I have said, during the financial crisis, every single member of the eurozone, bar Luxembourg and Estonia, would have been excluded. What are the Minister's views on that criterion? I also have a number of other questions.