Michael Creed (Cork North West, Fine Gael)

When the history of this period of the European Union project is written, the Lisbon treaty will be seen as the high water mark in terms of political and economic co-operation. The period since then has been characterised, regrettably, by a return to more nationalistic ambitions and a lack of cohesion in terms of the required economic response to deal with the euro crisis that continues to engulf Europe. I am not convinced there is a comprehensive response in place. The response has been piecemeal and has failed to grasp the central issues. If Margaret Thatcher was correct about one thing, it was that one cannot buck the market. Regardless of the statements issued repeatedly by leaders in Europe, the market has not responded positively. We remain in trepidation that countries like Portugal, Spain and Italy will be the next in line. That is because the responses to date have not been confidence inspiring or confidence building in terms of the markets, which is regrettable. That lack of cohesion has been manifest by unilateral solar runs by people such as, previously, Chancellor Merkel and more recently, President Sarkozy not alone on the Irish corporation tax but on, for example, the repatriation of the Roma population in France to Romania.

All of these are straws in the wind which one might say are totally disconnected from the core issue now confronting us. However, they are signals that we should not ignore. We require not a more French or German Europe but a more European Germany and France. As a country that has always subscribed to the concept of confronting problems together, it is regrettable to see these trends emerging.

Europe has a banking crisis. It has not gone away. Irish and other banks here were recently stress tested. We now find those stress tests were not worth the paper they were written on and there are to be new stress tests. There is a beginning of a realisation that this problem is only in its infancy. It is a much bigger problem than Europe has been prepared to confront to date. The public manifestations of this in, for example, a country like Ireland will become apparent in 2011 when the moratorium on mortgages expires and the 35,000 people in mortgage arrears of more than three months and the 12,000 people who have made no payments for more than 12 months will be in the firing line. That is the reality of the banking crisis facing Europe.

The bailout we received from the IMF and EU was effectively a bailout for French and German banks who loaned money to us to loan to mortgage holders here. If a price is to be paid by people who loaned or borrowed foolishly, equally there is a price to be paid by people who loaned foolishly. That is what is missing. We must face up to these problems.

Some 35% of the fund of €440 billion that has been established under the European stability facility is underwritten by what are known as the PIIGS, Portugal, Ireland, Italy, Greece and Spain. It is an inadequate fund by multiples of ten in terms of what is going to be needed to deal with the banking crisis in Europe. We would do well to face up to that rather than bury our heads in the sands and hope it will go away. If not, the words of former British Prime Minister, Margaret Thatcher, namely, "There is no way in which one can buck the market" will come back to haunt us.

On the Taoiseach's response to changes to the Constitution not being required as a result of treaty changes, he might be right. The Taoiseach receives good advice from the Attorney General and I have no doubt that this is the case. However, I believe there is a need for an independent mechanism at arms remove from Government that will adjudicate on these matters. The last thing this body politic needs is to be dragged kicking and screaming to the Supreme Court, with all the attendant negative publicity that goes with it because we will all be tarnished for taking the same view in terms of legal opinion.

I suggest to the Minister of State that he and his Government colleagues submit this treaty amendment to the courts. They should do so unilaterally and should not be out-flanked by the usual crackpots who have opposed at every juncture our closer integration and co-operation in Europe, which I believe is on balance a good thing. The Government should submit this matter for adjudication in the courts rather than, as is inevitable, wait for someone to take a court case on it. To be vindicated in that sense will give the Government greater moral authority than will its stating it knows best, having taken advice from the Attorney General. I accept that may be a mere window dressing issue.

We have a serious problem, namely, a European banking crisis which will manifest nationally. Now that the big issues such as cleansing of developer loan books and recapitalisation of the banks have been dealt, the banks will go after Joe and Joan in terms of their mortgage, which is the real problem for 2011. The State needs to get its act together and to assist in an innovative way people with mortgages, in particular those on sub-prime mortgages, getting onto high street variable rates.

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