Pádraig Mac Lochlainn (Donegal North East, Sinn Fein)

Sinn Féin has produced a document which it launched last week in Dublin. It is an analysis of the crisis, to which we provide a number of solutions. This so-called fiscal-austerity compact demonstrates that the leaders of Europe, including the Taoiseach, either do not know the causes of the problem or are in denial in this regard. The Government needs to stand back and look at how we got here. The crisis commenced with the formation of European Monetary Union and the eurozone when trade surpluses materialised in Germany resulting in the euro making the German economy even more competitive and in having a considerable bulk of the wealth at the core, followed by irresponsibility in distributing that wealth. The blindness of the European Central Bank allowed core state banks to lend recklessly without regulation to the periphery, including private banks in Ireland and governments, without due recourse or due diligence in terms of what they were doing. That is how the crisis was created. There is a fundamental problem with European Monetary Union as configured. A one-size-fits-all policy does not work for Europe.

I have no doubt that the Taoiseach and the Tánaiste are aware that the saddling of the people with billions of euro of private sector debt is a gross injustice which undermines the principle of the European Union based on solidarity. In the eyes of every fair international commentator and economist we have been disgracefully and abysmally treated. The Government has a huge moral platform to defend the interests of the people. They know this is wrong, as does the Taoiseach.

Sinn Féin's document lists four main solutions to the main elements of the crisis, namely, investment, the banking system and the sovereign debt issue. On investment, the potential of the European Investment Bank needs to be unleashed for a number of reasons, including that it has a solid track record of prudent investment and returns. This would be a good way of sensibly lending from the wealth of the core states to the periphery. This is a core issue. To do this, we need to deploy resources to the European Investment Bank. It is critical at this time that we send the message that there is a plan for job creation and growth in Europe. The European Investment Bank has been completely under-deployed. For example, we could use the National Pensions Reserve Fund in conjunction with the European Investment Bank to address core deficiencies in the State, not least the need for the roll-out of next generation broadband. I could go on.

The second element is the banking system. There must be a cleansing of the European banking system. There must be rigorous stress testing of the core banks, which we know has been avoided to date. This must happen if we are to restore faith in the peoples of Europe and the markets about which we hear so much. When this happens, deleveraging and recapitalisation will be required on a case by case basis.

The third element is the sovereign debt issue, on which we must take a sensible approach. Proper debt restructuring on a case by case basis will be required, in particular for Ireland. Without this, there will not be growth in the economy.

The Taoiseach and the Tánaiste are west of Ireland men. They know the impact of austerity on rural Ireland and are aware that the trail of emigration has recommenced. They know that Sydney, Perth, Chicago, New York, London and Glasgow are filling up with another generation of Irish people. We cannot sustain this. We cannot continue to pay the private banking debt while crippling the hopes of the people. Yesterday I visited the CoLab facility at Letterkenny Institute of Technology. My spirit was lifted by the fantastic entrepreneurs in the building, people who have ideas around computerised gaming, media technology and medical devices. They are brilliant people whose potential we need to unleash. However, because of the manner in which we are going about addressing the crisis we cannot do this. The Taoiseach knows that we cannot deploy austerity only and hope to return to growth. As such, we need to do something about this issue.

The final element relates to existing EU treaty provisions. Sinn Féin believes that if there is the will, there is the scope to deploy the ECB to purchase Government bonds on the primary markets. It has been doing this on the secondary markets but now needs to do it on the primary markets. The specific article which Sinn Féin believes permits this is Article 282.2 which provides the capacity for this in the context of the collective interests of the peoples of Europe being demonstrated. Could there be a more important time to do this? The Government needs to deploy the ECB to purchase Government bonds on the primary markets, deploy the resources of the European Investment Bank, in conjunction with the resources of member states, including in Ireland of the National Pensions Reserve Fund, and deal with the issue of sovereign debt in a fair, sustainable and credible way.

There is also the issue of the cleansing of the European banking system. These are four concrete solutions and I will submit the document to the Government because sometimes the Taoiseach suggests Sinn Féin is reckless and so on. This is an extremely responsible and sensible document that analyses clearly both the problems and what must be done. The difficulty is that, for whatever reason, the focus is on austerity alone. While that might be the view of Chancellor Angela Merkel, it is wrong. It will not solve the crisis and the markets are not convinced. Consequently, on behalf of my party, I appeal to the Government to consider its solutions which cover all aspects of the crisis and begin to defend Ireland's interests. We are on a hiding to nothing and if we continue in this way, we will be facing a lost decade.

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