Catherine Murphy (Kildare North, Independent)

I welcome yesterday's announcement because now the power will truly reside with the people, which is where it should have been. I was always of the view there was a moral obligation to hold a referendum on such a major issue and now there is deemed to be a legal obligation to do so. According to the Taoiseach's statement yesterday, the Attorney General in her formal advice said that the treaty is a unique instrument outside the European Union architecture and on balance a referendum was required to ratify it. This treaty is outside the European Union to which we all signed up and of which we have been a part for so long.

We are being told there is nothing new in what we are signing up to. For example, the criteria for entering the euro enshrined in the Maastricht treaty included that we were not to exceed 3% of a fiscal deficit or 60% of debt to GDP ratio. However, if we were to apply today to become members of the eurozone, our current economic situation would cause us to be refused. I use the term, "bailout" advisedly but even after this bailout we will have a debt to GDP ratio of somewhere close to 120%.

It is not a case of, "we are where we are", rather we must look at how we got here. It is clear there was major political, regulatory and domestic financial failings but I ask if those failings could have occurred if there had not been a failing at the heart of the euro. I refer to the supply of cheap money, of low interest rates, which fuelled the property bubble and an unsustainable lending pattern. We were instructed by the ECB not to allow a European bank to fail. The private debts of the banks were then assumed as a sovereign debt. The instruction of the ECB should have been accompanied by, at the very least, a sharing of the burden by the ECB with the Irish banks.

We are told the fiscal compact treaty and the debt are two separate issues but I cannot agree, they are one and the same. Much and all as I would like to take on board the optimistic tone of the Taoiseach yesterday when he stated that after years of crisis and sacrifice the Irish people now have the basis on which to build a sustainable economic recovery, I ask how can he possibly make such a statement. Signing up to this treaty will mean we are not signing up to the noble goal in theory of fiscal responsibility but rather we are signing up to reducing our fiscal deficit below 3% and as important, we are signing up to reducing our debt to GDP ratio to 60%. This will require to be reduced by one twentieth per year and this amounts to between €3 billion and €5 billion, depending on interest rates and a range of different matters. This will be a continuation of what we have experienced over the past six budgets and it will continue into the long term.

We know the consequences of this approach will be increased taxation, a range of new stealth taxes and significant cuts in public spending. We are already at the point where our domestic economy is in deep trouble and I ask the House to imagine if this were to be continued into the future. If we are being honest in signing up to these terms, we must say we cannot abide by them because our debt is not sustainable. Where is the social Europe we joined? Where is the Europe of equals constructed after the Second World War and over decades? Where is the EU Charter of Fundamental Rights? Without the economics to underpin it, this measure is not worth the paper it is written on.

Our debt to GDP ratio is connected with the euro, as is our budget deficit. While there is undoubted political and economic failures, I do not believe they could have occurred without a failure in the construction of the euro. I ask the Government to outline in detail how the terms of the treaty will affect this country beyond 2015. It is easy to scare people by asking who will pay the pensions, the nurses or the gardaí. Equally the question could be asked that if we are signing up to the terms of the fiscal compact treaty, knowing we have an unsustainable debt, how will we be in a position to pay on the exacting terms laid down? All the taxes we will collect will go to pay nothing but the debt. We might have a lender of last resort but that lender of last resort will be required to pay only debt. I have much more to say but I will contribute at another opportunity.

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