Éamon Ó Cuív (Galway West, Fianna Fail)

I am glad that the ability to read the Constitution and to understand its implications survives.

There is simply no doubt the sole thrust of negotiations since 9 December has been to finalise a treaty that can be ratified by the Oireachtas and will withstand the inevitable Supreme Court case. Ireland was not alone in trying to reduce the radicalism of December's agreement. To deny this is to deny the obvious. In spite of the Taoiseach's comments, the truth is that he has received legal advice at every step on whether a vote might be required. I noticed his clever use of the word "formal" today. He is getting good at word crafting. The Taoiseach must wait for a final text to get a final piece of formal advice, but I am sure he already has informal advice. He knows exactly what is the Attorney General's view of the current text and he should be honest enough to outline it before he signs off on the treaty.

The text that will go to the summit does not represent the implementation of December's deal. The provisions have been carefully drawn to leave out legally binding provision for, in effect, a two-speed Europe. Enhanced co-operation may happen, but there is no legal obligation to agree in advance to be covered by policies with which one disagrees. In addition, for all of the fighting in December about the place of existing EU treaties and institutions, existing treaty law will remain fully in force.

The draft treaty explicitly states that the issue of real change is being kicked down the road with a target of doing something within five years. As currently drafted, it is a minimalist treaty that appears to do little more than put a small amount of extra enforcement behind policies already incorporated in EU regulations. The specific fiscal targets are those that were agreed last year and finalised in a regulation that came into force in November.

What is new is the idea that the European Court of Justice would be able to fine member states through cases that will be easier to initiate. At the heart of this is perhaps the most ridiculous idea in the construction of the Stability and Growth Pact, namely, the way to deal with a government in debt is to fine it an amount that is a fraction of that debt.

No doubt others contributing to this debate will speak forcefully about how the treaty spells the end of the world and is revolutionary. In truth, it is nothing of the sort. As drafted, it is a tokenistic effort that entrenches already agreed policies but fails completely to address the causes of the crisis.

Various parties and individuals have already started a competition for who can get to the High Court fastest when the Government tries to ratify the treaty through the Oireachtas. Just as the Government's main interest is in avoiding a vote, the main interest of these parties lies in having something to campaign against. What people ignore is that since we joined the European Union, there have been at least eight treaties between member states which have not required the holding of a referendum. For example, the 2003 accession treaty included amendments which were agreed for Ireland in response to the referendum in the State on the Nice treaty. Not every change automatically requires the holding of a referendum. The important issue is to see the final text first.

The problem with the treaty is not that it does too much but that it does nothing about the real causes of the crisis. In particular, it completely ignores the policies required to return growth and job creation to Europe. Not a single provision in the treaty would have prevented the current economic crisis. In Ireland's case, we fully met every provision therein, right up to the start of the recession. Others would have had to run slightly tighter budgets, but they would not have been obliged to adopt any policies which would have averted the crisis. It is a great pity the Taoiseach put party politics first by repeatedly linking Ireland's problems with the failure to operate to these fiscal rules. In doing so, he has significantly weakened Ireland's hand.

We support the idea of greater efforts to ensure long-term fiscal stability in Europe. What we do not support is the notion that strengthening fiscal control will solve any problem. Britain, the United States and many other countries with no sovereign borrowing problems have worse fiscal balances than in the eurozone. In the case of the United States, the yields on Treasury bonds are at an historic low. Outside of the governments of a handful of European countries and, tragically, the board of the European Central Bank, nobody believes the crisis will be ended by showing greater resolve on borrowing and debt. In fact, the recent downgrading of France and other countries was explicitly justified on the basis that the agenda agreed in December was the wrong one.

The core cause of the sovereign debt problem in the eurozone is the lack of a lender of last resort for the primary bond markets. Investors are losing confidence that the money will be available when they seek to redeem bonds and, consequently, have been driving up yields. In the past month there has been some respite, but the evidence is that this is because of background manipulation of the market in an effort to restore confidence. In reality, we have the ridiculous situation where the ECB is lending money to banks in the hope they will buy up sovereign bonds. Other central banks are buying them directly, with lower costs and risks and a much greater impact. The failure of the draft treaty to include a single word about any reform of the ECB is the greatest indicator of its irrelevance to solving the crisis.

The policy of the European Union remains the funding of bailouts rather than preventing them from being required. The failed policy which drove Ireland and then Portugal out of the markets in the past year and a half remains untouched. If the leaders of Europe want to address the causes of the crisis, they should at least indicate an intention to explore a series of specific steps. The fist and most significant of these is the need to change the mandate of the ECB. At a minimum, the bank should be given a mandate to target economic growth as well as low inflation. Equally, it must lead a unified financial regulatory approach. Second, before trying to establish a fiscal union, the leaders should agree to establish a significant fund to assist countries in facing major economic shocks. The former President of the Commission, Jacques Delors, showed he understood this when he pushed for Cohesion funding, but it appears to have been forgotten by those who believe growth can come from control without investment.

Third, the leaders should agree to a significant increase in funding for employment creation in the worst affected countries. The reason people here and elsewhere developed a growing respect for the European Union was that it played a major role in tackling unemployment. That should be remembered and addressed in the agreement next week.

Fourth, the leaders must signal that they will no longer tolerate the fracturing of the European Union and the arrogant behaviour of a couple of leaders more concerned with domestic opinion polls than the worst economic crisis since the 1940s. They have been helped by the timidity of the Taoiseach and others who have failed to build alliances or forward an alternative agenda. If President Sarkozy and Chancellor Merkel turn up on Monday with a prepackaged agreement and demand that everyone shut up and sign, they should be told "No". All 27 member states have rights which must be respected.

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