Dáil debates

Wednesday, 7 March 2012

European Council: Statements (Resumed)

 

1:00 pm

Photo of Clare DalyClare Daly (Dublin North, Socialist Party)

It is an incredible indictment of the weakness of the Government's position that the best reason advanced by the Taoiseach for voting in favour of signing the treaty is that if we do not, Ireland will be frozen out in terms of access to funds in the future. We all know that the reason is the insertion of the so-called blackmail amendment. Even if the Taoiseach did not initiate that provision, it is clear he consented to same. This is akin to the Government giving someone a gun and then running a campaign stating it must defend itself because it is afraid it will be shot. What is worse is that while the treaty which includes that clause has not yet been put before the House, the Government is acting as though it is already in place. I have no doubt that the Government is working feverishly behind the scenes to secure a deal on the promissory notes so as to make the vote on the treaty more enticing. Even if all of the promissory notes were written off, the treaty should still be rejected.

Despite what other colleagues have said, including Deputy Micheál Martin who now appears to be a great supporter of the Labour Party's position on the treaty, this is an austerity treaty. One only has to read the text to realise this is true. In this regard I refer to some of the provisions of the treaty, in particular the one highlighted by the media again today on the balanced budget rule contained in Article 3 which requires a structural deficit of 0.5%. This target, if exceeded, will trigger cutbacks, extra taxes and penalties and fines by the European Court of Justice of in the region of €150 million.

No one can define "structural deficit". The figure differs depending on to whom one speaks. The IMF's position differs from that of the European Commission and so on. Who will make the decision? As stated in today's edition of the Financial Times by Mr. Martin Wolf, it is akin to putting an immeasurable concept into law, which is mad. The Government is proposing to hand over responsibility for making the decision on what the target will be to the Commission. We know that Ireland will not have to abide by this clause until after 2014 when it comes out of the bailout process. However, according to the Department of Finance, by 2015 Ireland will be running a deficit of 3.7%. The Government wants us to vote for the treaty which enshrines a 0.5% target which, as has been outlined, will result in an extra €5.7 billion being taken out of economy which is already stagnating and coming to a halt because of austerity. Article 4, the debt reduction provision, similarly requires a massive amount of money to be taken out of the economy. Did the Council consider that the impact of its austerity measures will be pretty much as it already has been, namely, European economies grinding to a halt, massive unemployment and severe conditions for ordinary people? Moreover, this is not once-off austerity. What is being proposed here, through provisions of binding force and permanent character, is an ending of any expansionary fiscal policies. A Labour Party Government that seeks to put into law a measure that would outlaw economic policies - even Keynesian, let alone socialist policies would be outlawed in the future - reflects the huge journey the Irish Labour Party has taken almost 100 years since its inception. Not only is this proposal ideologically flawed, it also is practically flawed and constitutes bad economics. It is bad for the economies of Europe and is bad for Ireland because it would stop any programme of meaningful public investment and public works against a backdrop in which thousands of people are queueing overnight on the streets of Cork to leave this country to find employment elsewhere. At a time when the private sector is failing to invest, despite increased profits, the only area from which investment can come is public expenditure and Government funding but, in essence, the Government is attempting to seal off that avenue. This treaty is a disaster and should be opposed.

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