Joe Costello (Dublin Central, Labour)

I am delighted to have an opportunity to say a few words on the important issue of recent developments in the eurozone. It has often been said that a week is a long time in politics, but a couple of days is a long time nowadays. Such fast and furious changes are most evident in the eurozone during the current economic crisis. It is positive that EU member states, particularly eurozone countries, have started to focus properly on the extent of the problems facing many eurozone countries. They are no longer blaming smaller peripheral countries as they did some months ago. Ireland had argued strongly in favour of a wider focus. At last, Germany and France have taken the initiative and started to take this issue seriously. Germany, in particular, seems to be displaying a new and vigorous determination to consolidate and protect the eurozone, which is very important.

There have been many developments in recent times. A substantial package was put in place at the summit of 21 July last. The establishment of the European Financial Stability Facility and the economic governance proposals are major measures. The European semester is an absolutely fundamental way of conducting our business. All countries will co-ordinate their budgetary facilities. We will come together - not in convergence but in consultation and co-ordination with each other - to ensure there is no breach of the Stability and Growth Pact and we are keeping within the lines that have been set.

On 23 October, a major proposal in relation to the growth agenda was agreed by the European Council. As we know in this country, growth is everything. In the absence of a growth policy, we will not get out of the crisis and the whole consumer side of things will continue to stagnate. On 26 October, it was decided to strengthen the monetary and economic policy of the member states, which is important. Under the package that was proposed for Greece, a 50% write-down will be done on a voluntary basis, largely by the EU banking sector. That, taken with the €130 billion that has been put forward in the new EU-IMF programme, is an extremely significant contribution to bringing Greek public debt back to 120% of GDP. The quid pro quo is that Greece has to reach a certain debt target through further fiscal consolidation, privatisation and structural reforms.

That is the point we had reached when the Greek Prime Minister decided to seek a mandate from the people for austerity measures. Many of us may disagree with that decision, or with the manner in which it was announced. There was an element of surprise. He did not consult his colleagues in the European Union or, as far as I can gather, his colleagues internally in the Greek Government. It was sprung on the people. It certainly left a lot to be desired. It unsettled the markets to an inordinate degree. If the referendum is successful, it will enormously enhance the position of the Greek Government by giving it a mandate to move forward with austerity measures and deal with the situation we see daily on our television screens. I refer to the rioting on the streets, which is causing enormous difficulty for the Greek Government as it tries to act in a cohesive fashion. It is absolutely crucial that a decision be taken soon and any referendum be put before the people as quickly as possible.

The position of Ireland is totally different. We are an export-oriented country. We need to have security in relation to our exports and global trade. Any default on our debt, structured or otherwise, could incur huge difficulties for us. This Government was elected six months ago to deal with the economic crisis. The general election was essentially a referendum on the economic crisis. Last week's elections - the by-election in Dublin North-West and the presidential election - were both won by candidates nominated by the Labour Party. Clearly, there is strong support for the Government's side of things and very little support for the Opposition. We should not forget that.

I look forward to seeing the report that will be published in December by President Van Rompuy, which will examine how to strengthen fiscal matters within the eurozone. It will be a major report, even though it is an interim report. It will merit major debate in the House very shortly. Difficult decisions may be required in response to the report, some of which will determine the direction in which the eurozone will move. In the months ahead we will need to decide whether we are able to move in a certain direction, whether further convergence will be required or if we will be able to operate on a co-ordinated basis and whether treaty changes may be required.

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