John Paul Phelan (Carlow-Kilkenny, Fine Gael)

I am glad to have an opportunity to contribute to the Second Stage debate on this legislation, which provides for a constitutional referendum on the stability treaty. I am glad the people will get an opportunity to make their judgment on what is a crucial stepping stone on the road to recovery for our economy and country. This is a different referendum from all the previous referenda we have had on the various European treaties because this treaty will come into effect next year if 12 countries ratify it. Ireland is the only country that will have a referendum in which the members of the public will have their say directly. This places us in a unique position. However, it is crucially different in that the treaty will come into effect regardless of the outcome of the vote in this country.

The Minister of State, Deputy Costello, and other speakers have referred to this treaty as providing an insurance policy. It is similar to householders who insure their houses. They do not do so in the hope that they will have to use that insurance but for the reassurance of knowing it is there. The treaty is not just for the reassurance of Irish people and the Irish economy, but for the reassurance of people who are looking at this country with a view to future investment here. That is the single most important aspect of this treaty and it is the reason I will actively encourage and campaign for people to support it on 31 May. The euro is our currency. It is vital to the survival and recovery of our economy that we defend our common currency. The treaty is a concerted effort by members of the European Union to address some of the difficulties that have arisen in recent years that caused the situation in which our economy and the economies of many states in Europe now find themselves.

The stability treaty has been described as an austerity treaty. Nothing could be further from the truth. Without the support of the IMF, ECB and the European Union - the troika - the difficulties we are experiencing at present in terms of trying to balance our budget would be far more severe. We would have to do it overnight. Just as politicians lecture businesses and householders about balancing their budgets, it is essential that governments and countries try to balance their budgets. It must be remembered that the terms in this treaty are those that were included in the revised Stability and Growth Pact. A crucial aspect of the stability treaty, however, is that for the first time it is proposed to impose sanctions on countries that go outside the terms established under that pact. From an Irish perspective, it is worth pointing out that France and Germany were the first countries to breach the original terms of the Stability and Growth Pact. No sanction was imposed on them. The sanctions provision will be a protection for smaller members of the Union such as Ireland in that sanction will be automatic on larger countries unless there is a majority vote to the contrary. That is a significant improvement in the bargaining position of smaller countries such as ours on the future of the euro and the European Union.

The job of this Government since the election last year has principally been to return economic and political stability to this country. I believe the Government has largely succeeded in that regard. The sense of doom, gloom and terror that existed 12 months ago and the sense of confusion about the future direction of Government policy do not exist at present. There is optimism, although there is also a realisation that the next couple of years will not be particularly easy. I believe the stability treaty should be supported by the people and I will do my utmost to bring that message to people in Kilkenny over the next few weeks. As I said earlier, I am glad the Irish people will have an opportunity to voice their opinion on this treaty through a referendum at the end of May.

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