Lucinda Creighton (Dublin South East, Fine Gael)

I thank the Tánaiste for sharing time to allow me this opportunity to address the House on this crucial Bill. It goes without saying this is extremely important legislation as it will facilitate the holding of a referendum on the stability treaty on 31 May. While the debate began many weeks ago on the airwaves, it is appropriate that we begin the formal debate in the Houses of the Oireachtas. I look forward to engaging fully as the debate broadens out beyond the Houses in the weeks ahead. I will be working hard with my Government colleagues to ensure the support of the people for the treaty on 31 May. I enjoin the Tánaiste in commending the ongoing work of the sub-committee of the Joint Committee on European Union Affairs under the chairmanship of Deputy Hannigan. The sub-committee has already heard from a broad range of voices throughout society as well as contributions from a variety of our EU partners. The interventions heard by the sub-committee are contributing to an informed, balanced and considered national debate on an issue of pressing national interest. As the referendum date at the end of next month draws nearer we can but hope that the considered and tempered approach persists.

The public will go to the polls on 31 May and will need the full facts of what is in the treaty and details on the implications of its ratification for Ireland. I spoke of the need for adequate, clear information to be made available to the people even before a decision was taken to hold a referendum on the treaty. In response to this genuine need for information, the Government will shortly circulate a copy of the stability treaty to every household in the State. This was not done in the case of recent referendums but the Government's view is that the need for first-hand information is sufficiently pressing to justify this innovative step. I appreciate that some who oppose the treaty have welcomed this move by the Government and I welcome the fact that all sides in the debate at least agree that the people need information on the proposition before them to make an informed decision.

The full text of the treaty will be accompanied by brief explanatory material intended to highlight the main elements of and related to the treaty. Later this week the Government will launch a dedicated website concerning the treaty. This will provide access not only to the text but also to a range of explanatory material. It is the Government's sincere hope that this information, which will be distributed to every household in the State in the coming weeks, will make an important contribution to providing voters with the information they need to make an informed decision on 31 May. In addition, the Referendum Commission, under the chairmanship of Mr. Justice Kevin Feeney, will fulfil its mandate to explain, independently of Government, the subject matter of the referendum proposal, to promote public awareness of the referendum and to encourage the electorate to vote at the polls on 31 May.

Before outlining details of particular provisions of the treaty I wish to provide some context. We are all aware that we have experienced a profound crisis in the euro in recent years and we are not out of the woods yet. That much is clear. Our currency, the money in our pockets, has had its stability, credibility and its future called into question. Why should this be of concern to the people? First and foremost, instability in the euro area has impacted negatively on the interest rate at which euro area countries, including Ireland, can borrow money in the international financial markets. This considerable disruption to the functioning of the financial markets led to Greece, and subsequently Ireland and Portugal, having to withdraw from open market funding and rely on mechanisms put in place by the EU and IMF to secure ongoing access to funds with which to fund our schools, hospitals, the Garda and all the other public services and social payments that are relied upon by citizens every day.

A lack of stability introduces added uncertainties to investment decisions made by multinational corporations. These firms are highly mobile in terms of the destinations for their investments. It also affects the investment decisions being made by our indigenous companies, especially small and medium-sized enterprises, SMEs, which crave stability and a maximum degree of certainty. In the absence of both they are likely to hold off on job-creating investments or, in the case of multinationals, find an investment location with less volatility. Restoring stability to the euro is a critical step to extract ourselves from our current predicament. The treaty will play an important part in that effort. As the Tánaiste has stated, it is not sufficient on its own but it is an essential element. For this reason Europe's response to the current crisis has been multifaceted. In addition to reaching agreement on the new stability treaty, to which I will return, we have also established the European financial stability facility, EFSF, from which Ireland currently draws funding. The permanent successor to the facility, the European Stability Mechanism, ESM, has now been put in place and is due to enter into force in July, one year ahead of schedule. We have also put in place the European semester which is overseeing the implementation of structural reforms set out in the national reform programmes provided by each member state. In addition, the European institutions have been mindful of the need to put in place robust and convincing firewalls to prevent negative spillover effects from one member state to another.

During the course of this crisis we have seen all too vividly the remarkably pronounced level of interconnectedness that exists among members of a currency union. What happens in one member state can have and often does have serious repercussions on all the others. I am pleased to note that the review of the adequacy of the overall ceiling of the EFSF and ESM conducted recently by eurogroup finance ministers has resulted in the agreement to expand the level of support funding to €700 billion. The Government has been consistent in advocating that firewalls in the euro area must be as strong and credible as possible. The recent agreement among finance ministers constitutes a strong and credible response and it is to be welcomed.

One further element of the jigsaw that comprises Europe's response to the crisis has been the explicit appreciation of the need for fiscal consolidation to be complemented and supported by vigorous action to generate growth and job creation. The Government has held this view for some time. Without growth the burden of getting back on track would be much greater. I am pleased that this is a widely held view among our European partners. They now appreciate the need for a balanced response to the challenges we face in the euro area. This is not an either-or situation, as some who are opposed to the stability treaty would have us believe. One complements and reinforces the other. Growth built on further excessive borrowing is not a sustainable solution. It makes the problem far worse for us now and for the generations to come.

This brings me to the contents and implications of the stability treaty. It will be useful to outline to the House the key elements contained in the new treaty. Some of the provisions have already been the subject of misrepresentation in the House and beyond and it may be helpful to set the record straight. One element is the introduction of a deficit brake at national level. This will require member states to have an automatic correction mechanism in their national laws to ensure they keep within the rules and abide by the requirement for countries with debt in excess of 60% of GDP. This means keeping budgets in balance or in surplus. Another element is the restatement of a pre-existing obligation in EU law to have a debt brake. This requires countries with debt in excess of 60% of GDP to reduce it at an average rate of one twentieth per year. There is also a requirement for countries in the excessive deficit procedure, as set out in the EU treaties, to have a budgetary and economic partnership programme, the content and format of which is to be defined in EU law. There is an agreement to support commission recommendations in respect of a country's deficit under the EU excessive deficit procedure, unless a qualified majority is opposed, making it easier to take action against a country not playing by the rules.

There is the possibility for a signatory of the new treaty to be brought to the European Court of Justice if its national law is regarded as not complying with the requirements of the treaty concerning the establishment of a national deficit brake. There is also an ability for the court to impose fines if a signatory ignores its judgment in this regard. New arrangements are set out for the governance of the eurozone, including provision for at least two Euro summit meetings per year at the level of Head of State or Government, at which the Taoiseach will represent Ireland. Of particular relevance to the Houses of the Oireachtas is the provision in the treaty for a conference of representatives of the relevant committees of the European Parliament and the national parliaments of countries participating in the treaty to discuss budgetary policies and other issues covered by the treaty. Arrangements are in place for the treaty to enter into force on 1 January 2013 once 12 euro area signatories have ratified it according to their national requirements. Countries then have one year to transpose measures into national law.

The treaty concludes with a provision that within five years at most, following its entry into force, the necessary steps will be taken with the aim of incorporating the substance of the treaty into the European Union's legal framework. Significantly for Ireland and other countries currently in stabilisation programmes, it is made clear in the preamble to the treaty that none of its provisions is to be interpreted as altering in any way the requirements of a stabilisation programme, such as Ireland's EU-IMF programme. The preamble also provides that access to the European Stability Mechanism, ESM, is linked to ratification and implementation of the treaty's provisions. This is done on the logical and reasonable basis that a country receiving the support of its partners under the ESM should be prepared to run sensible budgetary policies. That is as much in Ireland's interest as in anybody else's. None of the provisions of the stability treaty, whether new or pre-existing, should cause any concern for this State. The requirements placed on us by our EU-IMF programme go considerably further than what is envisaged in its provisions. What the treaty will do is level the playing field so that all member states - large or small, in the north or in the south - will in future be held to account. Such a development is good news for Ireland. It is why the Government has signed up to the treaty and why we are actively advocating for its ratification in the referendum on 31 May.

Ireland is already delivering on its commitments, as acknowledged across the European Union and far beyond. An arrangement whereby all member states play by a set of transparent rules and are seen to do so is good for Ireland. Such an approach will bring credibility and confidence to the euro and stability to the financial markets. That is in our interest. As a small, open trading economy, we need to pay our way in the world. It is a simple reality that, over the medium term, one's income must cover one's spending. This rule lies at the heart of the treaty. It is a question of good housekeeping. Any other approach would regrettably generate a crippling debt spiral through the addition of ever increasing volumes of debt. It is our responsibility to face this issue head on and to ensure we do not leave that legacy for those who come after us.

That is what this Government is doing. Failing to do so, on the other hand, would be unfair to future generations and counter-productive in terms of instilling confidence and stability in our economy. This Government is tackling Ireland's problems. Unlike others, we realise what needs to be done and are not hiding our heads in the sand. As I said at the outset, wishing away our unsustainable financial position will not make it go away. It is only through determined action now that we will get back on track. This is just as true in Europe as it is in Ireland and is precisely what the stability treaty is about. It is a necessary step in the process of restoring confidence and stability and it is important that we ratify it.

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