Catherine Murphy (Kildare North, Independent)

We are aware that while we can table any number of amendments to this legislation, the one thing that is certain is that none of them will be accepted. That seems to be the message, and that is deeply troubling. Most Members would be unhappy with that kind of arrangement.

A question that keeps going through my head is what will happen in 2013. We are supposed to return to the markets by then, yet we will have to come up with our share of this new fund. There are many questions in my mind about that.

We are buying into something at a time when there is deep political uncertainty. There is a lack of leadership at European level. It is not that long ago that Chancellor Merkel reminded us that she wanted to be the Chancellor of Germany. Nor is it that long ago since President Sarkozy used the argument of his concerns about our corporate tax rate for his own purposes for internal consumption within France. That lack of solidarity is a backdrop to this legislation and this mechanism. It is not clear from where the required leadership will come but the one thing that is certain is that it is required.

We saw today the downgrading of the credit rating of Italy, a country we are told is too big to bail out, yet the provisions in this legislation allow for a stepping-out of guarantors and a sharing of the amount that must be contributed to the fund. What happens if a very large country steps out? That would put incredible pressure on the other countries.

I was no fan of the Maastricht treaty. I knocked on doors during the campaign for it because I thought it was being sold as a measure under which we would get €6 billion or €8 million. It was not fairly sold on the merits of what was being proposed. If something was going to go belly-up, the people who would pay the price if we could not meet the criteria would be poor people and our public services. It did not take much to figure that out. We were sold the treaty on the basis that we would get €6 billion or €8 billion and we are paying an awful price for the hoodwinking of the electorate. We saw the convincing that needed to be done in regard to the Lisbon and Nice treaties as a consequence of this.

What will be the governance arrangements around this mechanism? Are we moving towards a federal Europe? In the same way as we were mis-sold the Maastricht treaty, are we being mis-sold this measure in that we are moving towards a federal model? If we are, we should know about it. We should decide we will do it if we think it is good for us or decide we will not do it if we think it is bad for us. This is not benign.

The Minister said, as was stated in some of the background material to this measure, that it will give us access to a triple A rating. The agencies that decided our credit rating, Moody's and Standard & Poor's, are the ones that decided to assign a tripe A rating to Anglo Irish Bank, AIB and Bank of Ireland. I do not place a great deal of confidence on their credit rating being some sort of a guarantee for the future when they got it so wrong in the past, and it is not that long ago since they assigned those ratings.

I wish to quote a few extracts from a discussion paper prepared by TASC on the debt and banking crisis. The paper states:

The design of the Euro zone's permanent loan facility, the European Stabilisation Mechanism (ESM), is flawed for a number of reasons. The reasons are as follows:

First of all, the interest rates charged under the ESM will be ... unsustainable high levels. Second, the preferred creditor status taken by the official lenders is a disincentive for investors to purchase member state bonds. This exacerbates the difficulty for member states wishing to access the bond market at sustainable rates. Third, the proposed collective action clauses (the creditor bail-ins) on bonds issued after 2013 will increase the difficulty for member states trying to access the bond markets at sustainable interest rates in the future. Finally, the conditionality of extreme austerity imposed on members states wishing to obtain access to the EFSF and/or the ESM reduces the ability of the members state to grow out its crisis.

Our domestic economy is very depressed. The austerity measures particularly hit that part of the economy that accounts for 60% of it. In all the discussion on this prior to the general election it was stated that we would not be able to cut or tax our way out of this but that we would have to have some element of growing our way out of it. Essentially, we have moved on from that now. It is a question of us being able to reduce the amount we owe if we are going to be able to solve our problems.

The TASC discussion document describes Ireland as an emerging economy. It states that in the case of emerging economies, an 80% to 90% debt to GDP ratio is the danger zone, yet Ireland's debt to GDP level will be approximately 120% by 2013. In this document they themselves say there is no silver bullet, and I accept this. However, we should consider issues other than the simple ability to borrow from a lender of last resort. Governance issues are not being stated. We are moving blindly towards something instead of confronting the possibility that we are opting into a federal Europe.

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