Timmy Dooley (Clare, Fianna Fail)

Since the agreement of the fiscal compact treaty, Fianna Fáil has consistently called for a referendum to be held. Now that it is to be held, we will vote in favour of the treaty as a step towards facing up to the fundamental challenge facing the eurozone. However, we believe that it does not go far enough and that the ECB's role needs to be reformed substantially, fiscal union established and pan-European banking regulation set out. The fundamental design flaws of the euro need to be addressed in order to get Europe's economy moving again. Friday's European summit meeting has dramatically changed in tone with the announcement yesterday in the House of an Irish referendum. I welcome the fact the announcement was made in this House rather than elsewhere. No doubt, a ripple of shock spread through Government buildings in Merrion Street and in the Berlaymont building in Brussels when despite the Government's best efforts, the Attorney General recommended a referendum. This need not have been the case as the Government should not fear making a fair and open argument and putting a critical decision to the Irish people. This is of such a critical nature that it is right and fitting that the Irish people be given an opportunity to address it.

The Government has committed significant diplomatic and political energy in pursuing the avoidance of a referendum. It is automatically on the back foot going before the people as it was seen as running away from a vote on the issue. Its relations with our EU partners, which it emphasised was being rebuilt, have taken a blow after its futile efforts in negotiating a treaty on the basis of avoiding a referendum.

The original treaty wording that balanced budget laws need to be "constitutional or equivalent" was been replaced with "preferably constitutional". This phrase was included for a purpose and it was part of the negotiation process in a move to avoid an Irish referendum, despite German anxiety about weakening the treaty. Indeed, this was confirmed by Germany's Minister for European Affairs, Michael Link, who stated that European Union negotiators sought to design the eurozone fiscal compact in such a way as to avoid a referendum in Ireland. He specifically said: "We are trying to design everything that is on the table in a way which would be okay in the eyes of the Attorney General and the Irish Constitution so that no referendum is needed." The Government has been at pains to point to something different with regard to comments made but it is clear from Mr. Link's comments this was not the case.

Fianna Fáil has consistently called for a referendum to be held on this critical issue. When the outline of the fiscal compact treaty was hammered out in December 2011, we called for a referendum to ensure that the steps taken by the EU to move forward should enjoy popular democratic legitimacy. Short-term gains in avoiding awkward referendums and dodging fundamental issues are always outweighed by the costs of undermining the legitimacy of the European project. This has been illustrated in the past. In the long term, the European Union can only flourish with the active engagement and support of its citizens.

Efforts by the Government to avoid a referendum and the sentiments expressed by Cabinet Ministers that referendums by their nature are not "very democratic" are not constructive. Those comments should not be made and have no place in this debate. Likewise, European leaders must address the democratic deficit that is steadily eroding the entire European project. This referendum should be engaged with in a constructive and open manner. Information must be easily accessible and demagoguery and crude populism avoided. Open, honest debate on the future direction of the Union should always be at the heart of the major decisions of the EU.

The euro was established in the Maastricht treaty of 1992 as an integral facet of a new Europe after the reunification of Germany and the collapse of the Soviet Bloc. However, it suffered from fundamental design flaws that remain to be addressed. Deputy Spring has alluded to these flaws. The currency enjoyed an initial period of tranquility. Member states coalesced around German bond levels and this obscured the underlying difficulties of the currency. However, the financial crisis has ruthlessly shown up those structural problems. This treaty is a step towards tackling those profound problems. In the view of Fianna Fáil, the main problems with the euro have been so badly exposed over the past four years. I refer to the limited mandate of the European Central Bank; the lack of uniform financial regulation, including a pan-eurozone bank resolution regime; and the lack of a fiscal union, in particular, one which involves transfers between states and eurobonds.

This treaty is a bridge towards a framework of polices and infrastructural changes that will tackle these problems. In essence, it takes the previously existing rules set out in the 1996 Stability and Growth Pact and ramps them up with stricter enforcement rules. These rules have already been reInforced by the economic governance six pack in December 2011. The fiscal compact aims to limit the opportunity for financial imprudence by member states which will spill over into other member states and damage the currency, which is really the root of the current crisis. It establishes a framework that will allow for a more expanded and effective EU response to the euro crisis.

More sweeping and decisive action is required to fundamentally address the euro zone crisis and to generate a stable fiscal and monetary space for the economy to grow and jobs to flourish. We argue that the following steps must ultimately be taken. Fiscal union with euro bonds that pool sovereign debt will strengthen all member states' economic performance. Utilising fiscal transfers and euro bonds to invest in infrastructure and launch strong counter cyclical economic policies will be crucial to preventing future recessions on the scale of this one. The ECB's mandate needs to be reformed to a model similar to the US Federal Reserve where the ECB can expand monetary policy by buying debt from member states. The strong action taken by the ECB on the secondary bond market helped stave off the threat to Spain and Italy.

Recent liquidity measures for the banking system through three year loans have also prevented the disastrous, complete freezing of the banking system. Strong unified financial regulation across the Union, reflecting the reality of international finance under the remit of the ECB, will ensure that the banking crisis that we have endured does not happen again in the future. Regulation across Europe is a far more effective mechanism to prevent the disastrous banking decisions that have fuelled boom and bust economics.

This treaty is a building block towards putting in place the institutional framework and policies that are necessary in addressing the euro zone crisis. It is a single block in what needs to be a far greater and more ambitious programme of change. Failing to take these steps will haunt the EU as it continues to lurch from crisis to crisis with the fundamental problems of the euro continuing to plague the Union.

There are legitimate concerns about the treaty. I have expressed our view that it does not do enough and can only be seen as a step towards greater action in the future to tackle the euro crisis that is strangling economic growth, sapping business confidence and, ultimately, undermining jobs in Ireland. Economists have also concurred with this opinion and others have stated that not enough is being done to promote investment. These are fair and valid opinions that deserve to be heard and the people can weigh them up when they cast their vote in the coming months.

However, as others have said, campaigns of misinformation and dishonesty do not have a role to play. Conspiracy theories about EU plots with Goldman Sachs, which certain elements have put out, should have no place in the debate about the treaty. This is a pivotal moment for Ireland and its role at the heart of the European project. A campaign twisted by fear mongering, crude populism or outright misinformation has no place in public discourse. The citizens of Ireland, who rightly have the choice to make this decision despite the Government's best efforts to the contrary, deserve and demand open honest debate to thrash out the issues at hand.

As I said, Fianna Fáil believes in the European project. It guided Ireland into the then EEC and has always led the way in advancing our progress in Europe. The people know the immense benefits of being part of the European community of 27 member states and more than 500 million people.

The choice before the people is one to stay at the heart of a Union which has driven on social and economic advancement on this island. Fianna Fáil will fight to secure that place at the heart of Europe and looks forward to bringing that case to the only people who should ever decide on these critical issues, the citizens of Ireland.

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