Eamon Gilmore (Dún Laoghaire, Labour)

In December, it was agreed that, as part of our collective response to the current economic crisis in the euro area, we needed to further strengthen economic policy co-ordination and to construct a new "fiscal compact" to achieve this goal. Negotiations are ongoing on a draft treaty to give legal effect to this agreement. This work is being advanced outside the framework of the EU treaties because it was not possible to secure a basis on which all member states would participate.

As the Deputy will be aware, an initial draft text was circulated before Christmas. Further drafts have been brought forward since. The text is still a work in progress and it is hoped that significant progress towards agreement will have been made before an informal meeting of the European Council scheduled for 30 January. Once agreement is reached, the text will then be prepared for signature and subsequent ratification by each of the participants, according to their respective constitutional requirements. Only when a final text is available will it be possible to reach a view on what will be required by way of ratification in Ireland. The test will be whether the proposed treaty is compatible with the Constitution.

As the Government has confirmed previously, the Attorney General will study the legal implications carefully and will advise on what steps will be necessary to enable Ireland to ratify. Until then, it is simply not possible to be definitive. As the Government has made clear many times, if a referendum is required, one will be held.

On the specific issues to which the Deputy refers, it is necessary to recall the extensive obligations that already exist in EU legislation, including under the strengthened Stability and Growth Pact, SGP, provided for in the six legislative measures adopted towards the end of last year. Inter alia, when a member state exceeds the 60% debt to GDP ratio in the SGP, it will be expected to adjust its debt downwards by an average of one twentieth per year. In addition, the legislation requires a differentiated medium-term objective for each member state which is within a defined range of between -1% of GDP and balance or surplus in cyclically adjusted terms. The fact is that tough rules already exist and these are necessary if we are to secure the stability of the common currency into the future.

See this speech in context