Shane Ross (Dublin South, Independent)

I welcome the tone of the contribution from my colleague, Deputy Healy. He unapologetically introduced the word "default" into the debate. It is time this option was put centre stage in Europe as well as this Chamber. Ministers are fond of claiming, correctly, that our standing in Europe has never been lower. Their political intent is to blame the previous Government. They are also right about that because that Government reduced us from Celtic tiger heroes to the bottom of the European pile. The problem with our low standing is that little notice is taken of what we do. Our EU colleagues are not particularly impressed by our stand on various issues and they are able to kick us around and bully us. Apparently that has been happening at European Council meetings, the evidence for which is our inability achieve a reduction on our interest rate.

I welcome the decision by the Minister for Foreign Affairs to embark on a diplomatic initiative to get the message across to our European partners about our intent and the state we are in but that is not enough. If we are being bullied, we have to fight back. It is clear from the various European meetings that we have accepted lying down the diktats from German and France, which think they can push us around. As the U-turn on burning the bondholders made clear, we lack an alternative to the strategy pursued by the previous Government.

I would welcome a reasonable debate on this issue rather than an emotional or political one. Why did we not embark on the different programme championed from these benches in what I hope was a non-political way? The first step would have been a referendum. I would like the Minister to reply to my question because I raise a serious point. It is fair to accuse our proposal to hold a referendum as populist, although there is nothing wrong with being populist. However, while the referendum in Iceland is not a direct parallel, once the people in that country rejected the terms of their debt settlement by a majority of 93% their Government renegotiated much better terms with the British and Dutch Governments. These terms were once again rejected last Saturday by a much narrower margin but the nation was strengthened by its vote. If we told Europe our people will not stomach the deal without getting something in return, our hand will be strengthened. If any subsequent settlement involved a structured default, they might consider it.

We have other cards to play but we are not playing them. What in the name of God is wrong with announcing we will move our corporate tax rate in the opposite direction to that demanded in Europe? It might drive other governments barmy but we are not in the business of keeping these people happy. We could declare that we intend reducing it to 9.9% rather than raising it. That might have the effect of waking them up to the fact that we are still in charge of our tax affairs and they could do absolutely nothing about it. We have to go on a counter offensive and develop an alternative strategy to going to European Council meetings and doing what we are told by our larger neighbours.

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