Pearse Doherty (Donegal South West, Sinn Fein)

I move:

That Dáil Éireann:

notes that:

— on 16 December 2010, the European Council agreed a two line amendment to Article 136 of the Treaty on the Functioning of the European Union allowing for the creation of a permanent emergency funding facility to be known as the European Stability Mechanism (ESM);

— the text of the amendment to Article 136 states clearly that the stability mechanism be "activated if indispensable to safeguard the stability of the euro area as a whole";

— on 11 July 2011, the European Council agreed the final text of the Treaty Establishing the European Stability Mechanism which, when ratified by the 17 signatory states, would create a permanent emergency funding vehicle for EU member states known as the ESM;

— Recital (2) of the ESM Treaty incorporates the wording of the new Article 136 of the Treaty on the Functioning of the European Union, the effect of which is to make the overriding legal and policy mandate of the ESM the safeguarding of the stability of the euro area as a whole;

— under the terms of the ESM Treaty, the ESM would come into operation from July 2012 and would have a total fund of €500 billion of which Ireland would contribute €11 billion;

— neither the Article 136 Amendment to the Treaty on the Functioning of the European Union nor the ESM Treaty have been ratified by the Irish State;

— the ratification of the Article 136 Amendment will take the form of the proposed European Communities Act (Amendment) Bill 2012, which is due to come before the Oireachtas in this session;

— the ratification of the ESM Treaty will take the form of the proposed ESM Bill 2012, which is due to come before the Oireachtas in this session;

— in January 2012 the European Council agreed to an amendment to the Treaty Establishing the European Stability Mechanism linking access to ESM funds to ratification of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, more commonly known as the "Austerity Treaty";

— making ratification of the "Austerity Treaty" a condition of eligibility for ESM funds runs contrary to the letter and spirit of the amendment to Article 136 of the Treaty on the Functioning of the European Union and the European Council summit statement of 21 July 2011 which said that the European Council were, "determined to continue to provide support to countries under programmes until they have regained market access, provided they successfully implement those programmes";

— the insertion of this controversial amendment into the ESM Treaty is intended to frighten public opinion into supporting the "Austerity Treaty" in the event of a referendum in any EU Member State;

— the Irish Government did not oppose nor seek to prevent in any way the insertion of this controversial amendment into the ESM Treaty; and

— while the Irish Government did not have a veto on the final text of the ESM Treaty, it did and continues to have a veto over the Article 136 Amendment to the Treaty on the Functioning of the European Union, and could have used this veto to secure the removal of the controversial amendment from the ESM Treaty;

states that the reason for the Irish Government's acquiescence to this controversial amendment was to ensure that, in the event of a referendum in Ireland on the "Austerity Treaty", the Government could use this issue to frighten people into supporting a treaty that, if assessed on its own merits, would not secure popular support; and calls on the Government to:

— confirm it will not ratify the Article 136 Amendment and the ESM Treaty until after the "Austerity Treaty" referendum, and will not bring forward the proposed European Communities Act (Amendment) Bill 2012 and the proposed ESM Bill 2012 until the people have had their say on the "Austerity Treaty";

— debate the "Austerity Treaty" on its own merits and to desist from using the controversial clause in the ESM Treaty as a way of securing support for the "Austerity Treaty"; and

— state publicly that in the event of a rejection of the "Austerity Treaty" by the people in a referendum, it will seek to remove the controversial clause from the ESM Treaty, and will, if necessary, use its veto on the Article 136 Amendment to the Treaty on the Functioning of the European Union to secure the removal of the controversial clause.

The Government has yet to set a date for the referendum on the austerity treaty and already the scaremongering has begun. It started before the text of the treaty was even finalised. Last November, the Minister for Finance, Deputy Michael Noonan, stated the referendum would be a vote on Ireland's continued membership of the euro. More recently, the Taoiseach suggested a "No" vote could jeopardise our membership of the European Union. Neither of these claims is true. Our membership of both the European Union and euro is secure, as the Government knows. The reason for the scaremongering is the Government is unable to find a single positive reason for people to support the austerity treaty. How could they support it? If ratified, the treaty will result in even greater levels of austerity imposed on low and middle income families. It will mean up to €6 billion of additional cuts and tax hikes in the years after 2015, resulting in further cuts to front-line health, education and community services. It will lead to more stealth taxes and unfair charges, such as the household charge and septic tank charge, on families already struggling to make ends meet. It will also mean handing over more power to EU institutions, in this case the European Commission and European Court of Justice, to dictate the details of future Governments' fiscal and budgetary policy.

The Government always knew the treaty would be a hard sell, so much so that it actively sought to avoid a referendum at all costs. This is not speculation or an accusation made by members of the Opposition. The German Minister of State with responsibility for European affairs, Mr. Michael Link, confirmed to The Irish Times in February this year that European Union negotiators sought to design the treaty in such a way as to avoid a referendum in Ireland. To quote Denis Staunton of The Irish Times directly: "When asked if the fiscal compact agreed in Brussels last month had been designed in such a way that it would not need a referendum in Ireland, Mr. Link replied: 'Exactly'."

Unfortunately, the rights of the people enshrined in the Constitution are not so easy to circumvent and the Government thankfully failed in its attempt to deny the electorate the right to decide on the austerity treaty. However, the Government and its EU counterparts had a trick up their sleeve. They must have asked themselves how they could sell a treaty that would make people's lives even harder, while undermining their ability to choose alternative policies in future elections if they become dissatisfied with the policies of the current Government. The answer they arrived at was to insert quietly a blackmail clause in both the austerity treaty and treaty establishing the European Stability Mechanism, ESM. This clause states that access to future emergency funding from the European Stability Mechanism will be conditional on ratification of the austerity treaty. It was accepted last December without a single objection by the Government, which could have rejected it as unacceptable. It could have argued that to insert this clause would interfere with the ability of an electorate to assess and decide on the austerity treaty on its own merits. Crucially, it could have used its veto to block this blackmail clause but chose not to do so.

The Government is telling the electorate that if we reject the austerity treaty in the forthcoming referendum, we will be denied access to emergency funding from the European Stability Mechanism in future. This is not true. The primary function of the ESM, as outlined in the EU treaties and European Stability Mechanism treaty, is to provide funding to member states where such funding is "indispensable to safeguard the financial stability of the euro area as a whole." Denying a member state such as Ireland emergency funding would not only undermine the stability of our domestic economy but would also undermine the stability of the eurozone as a whole. To deny funding in such circumstances would be in direct contravention of the EU treaties and the ESM treaty. It is also a risk that no European politician would be willing to take.

It is important to remind people that the blackmail clause is not even written into the articles of the treaty establishing the European Stability Mechanism but contained in the recitals at the start of the document. According to the European Court of Justice, a recital of this nature "may cast light on the interpretation to be given to a legal rule [but] it cannot in itself constitute such a rule". In plain English, this means the blackmail clause does not have any legal standing, particularly if it is in conflict with the primary mandate of the European Stability Mechanism as outlined in Article 136 of the EU treaties.

It is stating the obvious that if Ireland is unable to fund itself come 2014, it will be because the first troika austerity programme failed. The explicit purpose of the current bailout programme is to assist our return to the sovereign bond markets. The idea that, having failed the first time, the Government would then sign up to a second programme based on the same conditions as the first, namely, crippling austerity and unlimited bank bailouts, is sheer madness.

It is also worth reminding people that the European Stability Mechanism is not the only source of emergency funding available to states frozen out of the bond markets. A number of economists have convincingly argued that the International Monetary Fund, through a number of different programmes, could provide emergency funding to the State if the ESM route was not open. This week, Tom McDonald of TASC and Michael Taft of UNITE published a short paper on the progressive economy website in which they discuss the details of this option. While it is not Sinn Féin's preferred option, the availability of the IMF option is an important fact about which people should be reminded. The ESM never was and never will be the only option.

Having said all of this, the matter of most immediate concern is the blackmail clause and the fact the Government has the ability to have this insidious clause removed from the ESM treaty if it so wishes. The Government has yet to ratify either the treaty establishing the European Stability Mechanism or, crucially, the amendment to the EU treaties that makes the ESM treaty legally possible. In December 2010, the European Council agreed to an amendment to Article 136 of the European treaties, allowing the establishment of the European Stability Mechanism. This amendment required the unanimous support of all 27 members of the European Council and, crucially, it must be ratified by all 27 member states. The Government intends to ratify the Article 136 amendment by way of the European Communities Act 1972 (amendment) Bill. Until this amendment is ratified, the treaty establishing the European Stability Mechanism and with it the ESM blackmail clause cannot come into effect.

Let us be clear on this matter. By refusing to ratify the Article 136 amendment, the Government could block the ESM treaty until such time as the blackmail clause is removed. What will the Government do? It has a number of options. It could seek to press ahead with the ratification of both the Article 136 amendment via the European Communities Bill and subsequently ratify the European Stability Mechanism treaty with the blackmail clause intact via the treaty establishing the European Stability Mechanism Bill. In so doing, it would use the threat of being denied ESM funds to influence the outcome of the referendum.

The second option for the Government is not to proceed with the ratification of the Article 136 amendment and the ESM treaty until after the referendum. This would allow the electorate to have an open and honest debate on the austerity treaty, free from scaremongering or blackmail. The Government could allow a frank and honest debate on the contents of the treaty and its implications for Ireland and the EU. Having allowed the people to make up their minds freely and democratically on the issue, it could then respect the will of the people.

If the austerity treaty is rejected in a referendum, the Government could then call for a further amendment to the ESM treaty to remove the blackmail clause. Its ability to secure this amendment would not only be strengthened by the referendum mandate but also by its veto on the Article 136 amendment to the European treaties. This would mean that irrespective of how people voted in the referendum, the issue of accessing emergency funding in the future and the conditions on which that funding is accessed could be debated after the referendum as a separate and free-standing issue from the austerity treaty.

It is the Government which will decide on whether the rejection of the austerity treaty will block access to ESM funding in the future, not the electorate. The Government has the power to remove this blackmail clause. The motion before the House calls on the Government to defer the ratification of the ESM treaty and the Article 136 amendment until after the austerity treaty referendum; to allow the people to have a free and fair debate on the austerity treaty free from scaremongering or blackmail; and, in the event of the people rejecting the austerity treaty, calls on the Government to seek the removal of the blackmail clause from the ESM treaty. Anything short of this would display contempt for the electorate and for the Constitution. I commend this motion to the House.

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