Billy Kelleher (Cork North Central, Fianna Fail)

Like the previous speaker, I welcome the opportunity to speak on the issue. It is an important debate to have in the House in setting out the stall of the Government and the political parties on the European fiscal compact treaty referendum to be held in the near future. It is important that we have an honest debate on the position of the country in the European Union, the supports we receive from it and the mechanism for governing the Union. We must also debate the perceived democratic deficit at the heart of the Union in ensuring citizens have direct access to decision-making processes at EU level.

When I spoke some months ago on the Finance Bill, I was critical of the European Commission. That is still the case. The Commission has been inept. It has not been capable of standing on its own two feet and flexing its muscles in the face of the Franco-German alliance that has been very much to the fore in recent times in dealing with the crisis. I accept that ultimately much of the money and support through our troika partners comes from the Germans, but the broader issue of democratic accountability is one that will be discussed in the treaty debate.

We must be honest about what would happen in the event that the treaty is rejected in terms of access to funds in a continuing programme or whether it would undermine our ability to return to the international markets. They are key issues on which we must be honest. If we say we should reject the treaty, we must examine the downside of that decision because it is clear that there would be downsides to a rejection of the treaty. In having a debate about this country, its position in the European Union and its relationship with it, we must also point out that if we reject the treaty, there could be serious consequences in the provision of funding for services in this country. That is one issue we must revisit in the near future.

The broader issue of the purpose of the fiscal treaty is to ensure cohesion among member states in terms of fiscal responsibility. We are all aware the Stability and Growth Pact failed miserably to bring responsibility to the various member states in budgetary management. This country was held up as a prime example of a country which was living within the constraints of the pact and remaining under the 3% target year-on-year.

In addition, the issue arose of the banks and how lending was allowed to escalate out of all proportion. That leads me to another important point: the European Central Bank has failed miserably in its responsibility to the eurozone and the broader European Union. There must be a fundamental examination of its role which should not be just to maintain a watch on inflation. It should have a broader remit in terms of provision of support for the currency and to ensure lending practices throughout the European Union are responsible. The Government, the previous Government and the people could deal with the imposition of a reduction in the budget deficit, but the funding of banks is another factor that is creating significant hardship. They are key issues in the European Central Bank almost abdicating its responsibility to ensure oversight in previous years of lending to states on the periphery by large member states at the centre of the European Union. That was obvious to people involved at the heart of the Union, but there was continual lending from Germany and the larger economies to nations on the periphery. We are now in a situation where we are being forced to pay back the money. What Deputy Michael McGrath stated a number of weeks ago in the context of at least delaying the repayment of the €3.1 billion of promissory notes is a key issue. It is the right thing to do because we now have access to other forms of funding that we did not have when that deal was put in place. I would urge the Minister of State, Deputy Creighton, to use all her diplomatic skills to ensure the repayment is delayed and that we can put a fair rational repayment to the people in the context of our commitments on the promissory notes as well.

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