Micheál Martin (Cork South Central, Fianna Fail)

During the past decade the formal meetings of Heads of State and Government at the European Council have involved significantly less substantive negotiations. The formal agenda has become more focused on simply putting through matters decided in preparatory meetings, with the final communiqué issued frequently almost exactly as drafted before Council met. There have been times when the difference between the media hype outside the Council and what goes on inside has bordered on the ridiculous.

This week's meeting looks like it will be significantly different. Substantive issues remain to be decided and the outcome will give a major signal as to the future direction of the Union. The outcome of the Council is important for Ireland but it is not about Ireland. Fundamentally, this meeting is about whether the spirit of solidarity remains at the heart of Union and whether the Union is capable of responding in a comprehensive and credible way to what has been rightly described as the first crisis of globalisation.

This Council represents the culmination of three years of ongoing discussions about the role and responsibility of the Union in tackling the economic crisis which continues to impact on large parts of the Union. Even the most euro-positive person must accept that the Union's response has been at best halting and faltering. The crisis has been unique and so there has been no easy blueprint to follow. All too frequently there has been a sense that the driving agenda has been not to find solutions to the problems of today but rather to try to push forward long-standing national policies.

At this week's Council there will be a clear choice before member states. They can recognise the collective benefit which comes from giving sustainable support to countries experiencing difficulties or they can fail to act and thereby risk the sustainability of the euro and a rising tide of euroscepticism in many countries, which would be destructive of the foundation of public support vital for the Union. The stakes are as high as they have been at a Council meeting for many years. Given this and the work done in recent months, I believe there can and will be a good outcome to the meeting.

One of the most dishonest parts of the debate as it has evolved is the idea that the problems facing Europe today are as a result of the wild periphery being allowed to act without the adult supervision of others. Under this view the problems are uniquely contained within the policies of the member countries and would have been avoided if the views of the centre had been listened to. Unfortunately, this is a superficial stereotype deployed in the pursuit of narrow electoral and broad political advantage. It is an argument which at its core is a cop-out, removing the necessity to look at many parts of the crisis as it has evolved, in particular here, in Portugal and Spain. It is also what creates the idea that countries seeking assistance need to pay a price for the assistance.

The European Commission and the Council took a clear view of the Irish economy in the years before the crisis and published regular commentaries and recommendations. In 2006, the Commission stated, and the Council agreed, that Ireland's "budgetary position is sound and the budgetary strategy provides a good example of fiscal policies in compliance with the Stability and Growth Pact". In 2007, the Commission stated, and the Council again agreed, that not only were things okay here but we provided a "good example of fiscal policies conducted in compliance with the pact".

Equally, as written in recent weeks by former Taoiseach, John Bruton, it is not credible to look at what happened and to miss the failures of European Central Bank, ECB, regulation. The rights of oversight and ability to act were in place and to write them out of the story avoids asking uncomfortable questions of the ECB and risks the possibility that these serious failings will remain unrecognised and unchallenged.

Every country has legitimate domestic concerns which must be understood in the context of the debate on the financial stability facility. Where the danger lies is in inflaming these concerns with damaging rhetoric about teaching lessons to other countries. This sets up the false opposites of the national interest versus the collective interest, something which only ever undermines the capacity for collective action.

As the House knows, the terms under which Ireland agreed a support programme under the European Financial Stability Facility were set out for all countries in a series of meetings in the early and middle parts of last year. They were not subject to negotiation because no negotiation was or is possible for an individual country. I know that there are those who would like to present it as a new phenomenon but from a point soon after the support programme was agreed, Ireland has been seeking to have the EFSF's conditions changed. It has been argued to our colleagues in the Union that the interest rate is simply too high and undermines the ability of the programme to achieve its core objective of helping our economy to recover. At the start of the process quite a few countries did not accept that the terms of the facility should be changed. As the discussions progressed, this changed to the point whereby a few weeks before the general election all countries signalled that they accept that this is not about whether the facility's terms should be changed but rather how they should be changed. This was a welcome development.

The recent eurozone summit had never been intended as the place to reach the final deal and the offer of a rate cut in return for abandoning our corporation tax policies was in no way a serious attempt to reach an agreement. The countries involved in this attempt to force the issue had repeatedly and strongly been turned down by the previous Irish Government and foolishly hoped that they could push something through.

The argument which the Taoiseach had with President Sarkozy was an exact rerun of an argument which former Taoiseach and Deputy Brian Cowen had with him earlier this year. Ireland's Government has changed but its negotiating position has not for the simple reason that it cannot. A deal on the support programme is worthless if to win it we would have to undermine a major proportion of economic activity in the country. We will have more time to debate corporation tax later when the Dáil will have the opportunity to give a strong endorsement to current policy.

I believe there will be a deal on Friday and that it will restructure the facility and reduce the interest rates to be charged to Ireland and anyone who subsequently accesses the facility. This is the clear implication of the statements of other countries in recent months. It will happen because it is in everyone's interests for it to happen. Ireland can be quite clear at the Council in saying that it has fulfilled its responsibilities. The scale and pace of fiscal retrenchment is unquestioned. In return for support and in light of our common interests with other eurozone countries, Ireland has accepted very significant constraints on its policy options in relation to the financial system. We have not acted unilaterally. So when we hear the statement that in return for a deal, Ireland must give up something, the answer has to be that we are giving up many things already. Instead of obsessing about non-relevant issues, what others should now face up to is whether they really want not just Ireland, but Portugal and Spain to be restored within a secure euro. Attempts to exploit the current situation to push other points are both cynical and damaging. It is a classic case of marginal issues being mishandled so that they become more important than they are, with domestic opinion being inflamed to no possible positive end.

Chancellor Merkel is a person of considerable abilities and undoubted commitment to the founding ideals of the Union. The nature of the German system means that she and her party face an almost continuous round of important elections and as we saw here last month, she pays close attention to elections. However, that particular electoral photo-opportunity does not appear to have had any particular impact on her views. What has been missing from Germany and France in recent times has been the type of instinctive understanding of the need for a balance between centre and periphery which was a hallmark of their past leaders. Those who constructed the engine of integration and progress from the mid-1980s onwards would not have become almost fixated on the policies of a small nation when the future of monetary union is at stake.

What should happen at the Council meeting, and I believe will happen, is that there will be a balanced agreement. The facility will be made more flexible and less onerous, benefitting Ireland and, just as important, ensuring it is of more credible assistance to Portugal and Spain should it be required.

It is reasonable that there be a specific response to the failures of fiscal policy here and elsewhere in the eurozone. The agreement of new fiscal rules to be introduced on a national level would not only be acceptable but would be welcome. A fiscal responsibility law which would give a stronger basis to the planning, agreement and oversight of fiscal policy is one part of it. There are also measures to which we could reasonably commit about limiting the scope for agreeing spending outside of the Estimates or a so-called pay-go system which requires the matching of costs and income for new initiatives. There will be no one-size-fits-all approach available because of the different constitutional systems operating in member states. However, Ireland can offer a detailed and credible plan which addresses the demand that fiscal policy should be more sustainable.

It may be tempting for the new Government to focus only on our domestic issues at the Council meeting. To do so would be a mistake. Ireland's international position and influence is real and significant and was hard won. Despite our current and temporary problems, we have a wider responsibility as a positive and progressive modern nation in the wider world.

In this context, specifically with regard to the situation in Libya, the Council should express its strong support for the principles of democracy and human rights to be respected. The recent action in support of the democratic aspirations of the Libyan people is welcome and, it is hoped, not too late. The early support for the no-fly zone strategy which has come from the Arab League is surprising but encouraging. Ireland should show these countries that when they take a principled stand, they can rely on the support of small but principled countries throughout the world.

I note with some disappointment that our new Tánaiste and Minister for Foreign Affairs has been quite slow to take a strong stand in support of the action to halt this violence against the Libyan people. As a nation, we know only too well the effects of Colonel Gadaffi's willingness to use arms and explosives on innocent civilians. Why has the Minister, Deputy Gilmore, not taken the opportunity to express strongly Ireland's solidarity with the innocent civilians of Libya and support for the action to halt this slaughter? Now is the time to re-examine the issue of Gadaffi's role in the conflict in the North of Ireland and to establish once and for all the extent to which this man and his regime contributed to the suffering experienced by so many in these islands over the decades of conflict which we suffered. Now is the time examine what intelligence material from the various security agencies can be published. Now may also be time for the wider provisional movement to look to their own records and, in the spirit of the Eames Bradley process and following on from the work done in helping to find the bodies of the disappeared, assist in establishing the extent to which Gadaffi and Libya contributed weaponry, finance and other assistance.

This weekend's referendum in Egypt showed that the Arab world's largest country is moving forward and there are equally hopeful signs in Tunisia. There is a need for the largest club of democracies in the world, the European Union, to be active and generous in supporting democracy, human rights and development in these countries.

People throughout Europe who believe in the ideals of the Union are looking to member states to agree credible and generous measures at this European Council meeting to help to get Europe and the euro through this crisis. These include measures which help individual countries to recover, protect the common currency and reinforce the vision of a Europe of shared interests.

The price of failure is also significant. It would mark an encouragement of euroscepticism and promote the idea that narrowly defined national interests should prevail. At the same time it would suggest to peripheral countries that the views of the strong centre must prevail. Now, more than ever, the European ideal can offer the best hope for our country and the people of Europe as a whole. However, Europe must actively choose this path. Its leaders must remember the principles upon which the Union was founded and they must take this opportunity to remind the people of Europe why they supported the Union in the past and why it deserves the continued support of citizens.

The outlines of a deal have been clear for months. There has been significant movement in the right direction from almost all countries. It is vital, therefore, the new Government holds the line that was established by the last Government, does not allow any fudge on any element of our corporation tax policy and ensures the principles upon which the European Union was established and upon which the country's support for Europe is based are protected and maintained.

See this speech in context