Brian Lenihan Jnr (Dublin West, Fianna Fail)

I am talking about the EU Stability and Growth Pact. It was not fit for its purpose of assessing the degree of risk to which Ireland was exposed. Issues like the competitiveness of unit labour costs and the development of asset price bubbles will be part of the revised Stability and Growth Pact. I have argued strongly for that at EU level. To date, the task force has focused on questions of fiscal rules and practices, such as the example I have just given, which would strengthen the pact and the practices associated with it. It is keen to provide for greater scrutiny and surveillance of national budgets in a Community-wide and eurozone-wide framework.

Deputy Morgan rightly referred to the recent declaration by France and Germany of their wish to see treaty changes. We are examining the implications of the proposed changes in our own domestic legal order, as well as in the European legal order. We have not yet expressed a firm position on the proposals, which lack clarity despite the impressive venue at which the declaration was made. The Government is formulating a position in this regard. I have made it clear that we are not, in principle, opposed to all treaty changes in these matters. However, we would take issue with any treaty change that would involve a fundamental change in the character of the Union itself.

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