Peadar Tóibín (Meath West, Sinn Fein)

People are asking whether this approach will work. The austerity treaty will not fix the economy or solve the private debt issue. On the contrary, it will make the problem worse because the policy inherent in it has already resulted in a double dip recession in Europe. The current European recession bodes ill for the Irish economy given the Government's decision to put all its eggs in one basket, namely, exports which are highly dependent on the health of the European economy.

The fundamentals of the treaty are based on the "six pack" modifications. Labour MEP Proinsias De Rossa said that the "six pack...legislative package will enforce the EU austerity programme, driving us into recession". He added that "four of the so-called six pack...are economically misguided..." and will "...kill growth, destroy jobs and derail the economic recovery". That was the position of the Labour Party six months ago. What has changed?

Article 3 of the treaty basically seeks a structural deficit target and makes it permanent and binding. It puts the nail in the coffin of Keynesian counter cyclical economic policy. Article 3 includes a provision for a new structural deficit of 0.5%, while there is also a restatement of the 3% deficit target and the debt target of 60% of GDP. There is a requirement for the states that breach these targets to return rapidly by reducing the excess portion of their debt ratio by one twentieth a year. This will inflict budget cuts for years after this Government has left office, and could mean fines of up to €155 million on this State, as has been alluded to previously. If the US had signed up to this treaty during the Great Depression, Roosevelt's New Deal would not have seen the light of day and the US would not have been lifted out of depression.

We obviously have to live within our means and levels of debt and spending are very unsustainable, but let us not rewrite history. The unsustainable debts that face this State arose through the nationalising of banking debt, which is a process continued by the Government. The Labour Party Members may wish to catcall on this issue. They may stand over their position in opposition, but in government they have delivered more money to the banks and more money to the bondholders. Some commentators have sought to liken the national economy to the household economy. The analogy is not true. No householders finding it difficult to feed, clothe or house their families will not seek a loan. People have also said that keeping budgets correct is like running a business. The reality is that most businesses go through a period of debt in order to make a profit. Householders and businesses basically need flexibility to pay down debt when the going is good and to borrow and invest when required.

This treaty is a major attack on sovereignty and if we want to see what the loss of economic sovereignty means, we have to look 100 miles north to Belfast. Many on the Government benches have raised the policy decisions of the Executive. The reality is that the Executive lacks the power to manage its economy fully and has to look to London in regard to what it can and cannot spend. It is frustrating, it is wrong, it is undemocratic and it fails the people of the North of Ireland. That is why Sinn Féin is about bringing those economic policies back to Ireland. If this Government is comfortable with the idea of becoming a provincial administrator, then it should be honest. It is not the vision of Sinn Féin, nor is it the vision of Collins, Pearse or Connolly.

Partnership within the EU should be based on independent sovereign states working for mutual benefit. Our relationship with the EU should be engaged, confident, proactive and critical when necessary. It should be intellectually independent. Our Government should unashamedly be able to put Irish interests at the heart of its engagement. Instead, we have Irish Governments that are intellectually deferential, docile and passive in the face of other member states' self interest. The culture that simply accepts what is being handed down to us is not good for Ireland and is not good for Europe. Seeking favour by being the best "yes" man in the class and failing to contribute robustly to the debate weakens the quality of that debate, which is necessary to halt the economic slide within the EU.

The EU is not the community organisation that people think we joined. Treaty by treaty, power is being centralised to the French and German core, to the democratic detriment of the periphery. Self determination and independence are at the core of Sinn Féin's policies. It was the reason we were founded in 1905 and we still struggle today for full Irish independence. I believe that self-determination and independence are central to the wishes of the vast majority of Irish people; not for some fluffy, romantic reason, but because Ireland unfree will never receive the economic prioritisation nor focus that it deserves. The economic policies, designed for the needs of the German and French economic cycle, are more often than not damaging to the Irish economic cycle.

One of the major weaknesses inherent in the single currency is the lack of a correcting mechanism to offset German and French centred monetary policy. Given that Ireland represents 1% of the EU economy, monetary policy is seldom if ever designed for Irish needs. As a result, we have a situation where we need a flexible fiscal policy to offset the dangers of that negative monetary policy. This treaty seeks to tie the hands of future governments behind their backs on fiscal policy, while the hands of monetary policy are already tied. We need investment in jobs in this State. EU banks need to be cleansed of toxic debt. Debt needs to be written down and we need a central bank in Europe that will be the lender of last resort. It is only through those processes that we will be able to re-enter the markets and reclaim our independence.

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