Martin Mansergh (Tipperary South, Fianna Fail)

I may make a few extra points. The leader of the Labour Party correctly talked about the importance of Ireland as an exporting nation and referred to the need for increased demand. I believe he particularly had in mind countries that are running large balance of payments surpluses. While that is true, in addition to increased demand particularly from those countries that are well able to accommodate it, we need to improve and are in the process of improving our competitiveness.

There has been much discussion of stimulus packages which some countries are in a better fiscal position to implement. In our case as a small open economy, the danger - apart from any other consideration - is that much of the stimulus would go abroad. It also misses the point that the best stimulus we can give the economy is a fairly sharp correction to our competitiveness. That relates to reducing our costs. Obviously in some cases reduction in costs would be beneficial and not painful, but in other areas for example in public service pay, which forms part of the overheads of Government, is quite painful. As we know, in much of the private sector, loss of jobs, and pressure on earnings and time worked, etc., are painful. There are relatively few sectors of the economy not experiencing pain at present. It is a necessary process that is part of the logic of eurozone membership.

We are excessively subject to what one might call monetary illusion. In the mid-1970s and mid-1980s we had substantial reductions in real wages, but these were concealed by inflation and devaluation. I have seen studies that showed there was a bigger loss in real incomes in the 1980s than today despite the fact that we now have nominal wage cuts. I would like to see the trade union movement, in particular, taking that on board and absorbing it into its thinking. We owe a great deal over the past 20 years to the broadly constructive attitude of the trade union movement, in particular, as well as other social partners. It is a pity that matters have gone the way they have, for the moment, and we all hope dialogue will resume, on a realistic basis.

I could not agree more with the leader of the Labour Party about the celebrity commentators and one or two others who argue that Ireland should leave the eurozone. There are, undoubtedly, speculative forces that are trying to attack or undermine the eurozone. However, it is a major step forward, with major long-term strategic advantages for this country. The measures we have taken over the past 18 months have been geared towards ensuring we maintain our position within the eurozone as well as our financial and economic independence.

At a regional policy meeting last week, I was sitting next to a Latvian Minister. The IMF has gone into Latvia and there has been a reduction of 50% in public sector wages. The government there has very little say about the measures proposed by the IMF; it simply has to carry them out. In the news today, I notice that the EU Commission either has or is just about to approve the opening of negotiations with Iceland. For a long time, Iceland was fiercely against belonging to the European Union, but it now sees the benefits.

I am somewhat curious about Sinn Féin's policy in relation to this. In the South it has been against all EU treaties, including the one that established the eurozone, but, in the North, part of its policy is that Northern Ireland should join the eurozone. All human life and policy is about overcoming one's internal contradictions, of course, as Marx once said, but I would be interested to know how that particular circle is to be squared.

I pay tribute to the generally constructive tone in the European debates we have in the House. All parties recognise the enormous importance of Europe for Ireland. Certainly, if one wants to see in the future, as I and many others do, a united Ireland on an agreed basis, this is only credible in a united Europe. Therefore, that is why I find the Sinn Féin Party's euroscepticism very odd in terms of reconciling it with its republican philosophy, because the type of national sovereignty people had between the two world wars, and which we struggled with until the end of the 1950s, has gone. Sovereignty is important and, as the German Constitutional Court said, the European Union is an association of sovereign states. I do not believe there are many states in Europe that want to alter the situation, but it means pooling and sharing sovereignty. We have infinitely more possibilities and potential in the situation as it exists now than, for example, 50 years ago when, although we were sovereign, we did not belong to any organisation, apart from the Council of Europe. Nobody else took much account of us.

It is very different today, when what we have been doing, not least in struggling with our economic difficulties, has achieve broad recognition to the effect that Ireland is on the right path and that we are doing the right thing. This model is being recommended for other countries to examine as well.

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