Michael McGrath (Cork South Central, Fianna Fail)

I welcome the opportunity to make a brief contribution to the debate on the Private Members' motion tabled by the Sinn Féin Party. Fianna Fáil set out its position on the fiscal stability treaty in recent weeks. We have made it clear that while the treaty proposal does not represent an overall solution to the eurozone financial and debt crisis, on balance, it should be supported. Limited and all as it is, it does recognise the core objectives already signed up to by the country in the six pack of measures and other European initiatives to ensure fiscal discipline is an important part of the eurozone and that the existing budget deficit figures - 23 of the 27 countries in the European Union are in breach of the terms of the European Stability and Growth Pact - are adhered to and that such breaches do not become a permanent part of the landscape on the map of the European Union.

That said, we have also been critical of the Government's handling of the negotiations. What lies at the heart of the Sinn Féin motion is the agreement by the Government to sign away access to European Stability Mechanism funding for countries that do not ratify the treaty. Such a strategy has increased the stakes considerably in the forthcoming referendum. If this country does not ratify the treaty on which the people will vote in future months, we will be exposed to the international markets over a period. That is an enormous risk to expose the people to. I note the inclusion in the July communiqué of a statement to the effect that the European Union remains committed to supporting countries currently in a programme through financing, provided they meet the programme conditions until they regain market access. The question arises as to where that commitment stands in the event that a programme country rejects the fiscal stability treaty. We are critical of the fact that the Government has signed away that insurance policy and safety net.

The bottom line is that it is not possible to say with any degree of certainty whether a second bailout will be required by this country. We will know this time next year or in 15 months or 16 months time whether the country is in a position to exit the programme and return to borrowing in international markets in the normal way. We hope that will be achieved, but it remains an open question. There are many variables, some of which are outside the country's control, which will determine whether we will be in a position to return to the markets. As a Parliament, we must ensure the country has access to funding in order that the State can continue to operate and function in the normal way. It would be disingenuous of anyone to suggest in some way that if we do not accept the treaty and that if we were not relying on our international partners for funding, there would be no need for austerity. That is not a realistic proposition either because the bottom line is that every country with a budget deficit will have to eliminate it over a period. Either our international partners who are lending to us will insist on this or the international markets to which we would look for funding will insist on it.

Sinn Féin takes the view that it will be all right on the night; that if we reject the treaty, the European Union will continue to fund us, and even if it does not, there will be other sources of funding. It has cited the IMF as one potential such source, but its party leader has already said it should be sent home with its money. That would be the other potential source of funding for the country closed off. While we are critical of the way the Government has negotiated the treaty, the people must arrive at a decision based on what has been put in front of them. On balance, the treaty should be supported by them.

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