Enda Kenny (Mayo, Fine Gael)

I thank Deputy Ross for his kindness. His question is valid. Clearly, there is a difference between fiscal union and fiscal discipline. What the German Chancellor, Angela Merkel, has talked about is fiscal discipline. She believes that if countries sign on for a set of conditions, then they should be seen to be enforceable. At the recent meeting I had with her, she stated the European Court of Justice should be enabled to impose sanctions on a country that did not measure up in its budgetary fiscal discipline. The French President, however, has a different view about the requirements for fiscal union, an entirely different matter, in areas such as tax harmonisation.

The Government has made the point that Ireland never breached the Stability and Growth Pact. We support regulations and conditions that are enforceable. We have actually gone beyond this with the EU-IMF-ECB troika regularly forensically analysing our budgetary position. Next spring, the Government will introduce legislation to establish a debt break for the State's finances.

Under the Constitution, any changes to the EU treaties are subject to legal advice from the Attorney General as to whether a referendum is required. Treaty change is a large process of intergovernmental conferences, conventions and so forth, unless it is decided to be done by a specific narrow amendment which may still require a referendum here.

The crisis is now. It has to be addressed with the facilities and tools available. From our perspective, I have not hitched our wagon to the concept of eurobonds because one might well store up serious trouble for the country further down the line. Our view is that the ECB should be the backstop of ultimate and infinite firepower to deal with the question of contagion that affects every country.

As Deputy Ross will be aware from his study of history, in the 1930s, people assumed that banks that were well managed and well run could survive when in fact they could not. They cannot, and will not, in the future unless a credible backstop is provided. That backstop must be dealt with in the immediate future by political consideration because even if one assumed treaty change would be accepted by everyone, one could still not do it in time to deal with the crisis that affects us now.

My perspective for the meeting on 9 December is to deal politically with the crisis we have now and that means making political arrangements to provide a sufficiently credible backstop. The Ministers for Finance are attending a meeting today to discuss some technicalities around this. The EFSF has failed to attract the confidence of the markets and, whether it is a combination of the ECB, the IMF or whatever, that is where the focus of political leadership should be and decisions have to be made and made quickly. The question of anything beyond that is a matter for serious consultation in this Parliament and so on.

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