Brian Stanley (Laois-Offaly, Sinn Fein)

I wish to share time with Deputy Colreavy. We propose to take ten minutes each. The Fine Gael-Labour Party Government signed up to the treaty on 2 March this year. The reason for the treaty is not to improve the situation for the people we represent. It is not to provide any assistance to our economic recovery. In fact, it will result in the opposite outcome. We are holding the referendum because the core EU member states, including Germany and France, wish to impose stricter fiscal restraints on the peripheral economies, including Ireland. The aim of the treaty is to strengthen the enforcement of existing rules and to impose some new rules on government deficits, debt and budgetary policy.

The treaty makes no political or economic sense. It is anti-jobs and anti-growth. Irish and international economists from the left, right and centre have challenged its credibility. There is a near consensus that it will do nothing to resolve the crisis underlying the euro and, worse, it may even deepen the recession throughout the EU. It does not deal with the explosion of private debt caused by bankers, developers and speculators that caused the current economic crisis in the country. This is a crucial point but the treaty does not deal with this issue in any way. However, it ensures that Joe and Mary Soap, the ordinary citizens of Ireland and Europe, will pay for it. It will impose greater levels of austerity on ordinary citizens for an indefinite period. One economist has estimated that it will require a further €6 billion of cuts and tax hikes post-2015 at a minimum. Since our structural deficit is expected to be 3.7% in 2015, which amounts to almost €6 billion, compliance with the balanced budget rule set down in the treaty will mean austerity budgets from 2015 onwards.

The austerity treaty will not solve the eurozone crisis nor will it fix the Irish economy. It will deepen the recession and lead to greater levels of instability at home and throughout Europe. The treaty will also mean a loss of economic, political and legal sovereignty for the State. It will make Government investment in economic recovery more difficult. At the same time it will force governments throughout the EU to contract their economies and shrink the export markets so important to the growth of the Irish economy. Everyone in the House agrees that the Irish economy is dependent on these markets for growth. Fully implementing the treaty will deepen the recession, increase unemployment and generate even greater levels of instability. The word "stability" has been referred to many times. Supporters of the treaty maintain that it will create stability. However, recessions cause instability. We have seen as much in Greece and to a lesser extent in this country.

Article 3 is the most important of the treaty. It holds that governments' budgets must be balanced or in surplus. I have no wish to scaremonger. I read the treaty carefully and I went through it with a fine toothcomb. The article makes significant changes to the existing EU treaty rules on fiscal policy known as the Stability and Growth Pact. By placing the rules in an intergovernmental treaty they will become binding and permanent. If the treaty is ratified future governments will have to implement pro-austerity, anti-stimulus budgets in perpetuity. This significantly limits the freedom and decision-making powers of governments, including the current Government, irrespective of the size of the mandate they receive from the electorate. In times of economic growth the State will run a surplus and use that excess to pay down debt or invest in new infrastructure. At least, that is what should take place. The previous Fine Gael speaker referred to this but she does not appear to realise that the treaty will prevent the Government from doing so. In periods of recession, Governments should have the flexibility to borrow and invest to get people back to work and to get the economy back to growth.

The key provisions of Article 3 include a new structural deficit target of 0.5%, a restatement of the existing Stability and Growth Pact deficit target of 3%, a debt target of 60% of GDP and a requirement for States that breach these targets to return to them rapidly. It also means that the current Government will have to implement austerity budgets beyond 2015. This will result in the loss of political sovereignty. The treaty significantly strengthens the capacity of the European Commission to enforce member state compliance with the existing and new rules. Member states will be signing up to a new, legally binding obligation to automatically enter what is inappropriately termed an "economic partnership programme" when they are in breach of the rules. The content of such a programme will be determined by the European Commission and will be similar to the current EU-IMF austerity programme. This represents a significant increase in the powers of the commission at the expense of governments, including our Government.

The treaty will result in the loss of legal sovereignty because Articles 7 and 8 make three further changes. The treaty gives the European Court of Justice jurisdiction to determine whether member states are compliant with the debt and deficit rules. The treaty also allows one member state to take another member state to the European Court of Justice if it believes the member state in question has been in breach of the rules. It also allows the European Court of Justice to fine a member state 0.1% of GDP if it is found to be in breach of the rules. For the record, this would amount to €160 million in the case of this State based on our GDP.

Article 5 goes further and introduces new measures aimed at compelling member states in breach of the targets to take action deemed necessary by the commission and the council. There is a new obligation to enter a budgetary and economic partnership programme involving detailed structural reforms aimed at reducing debt and deficit levels. This is essentially the European version of the troika programme that member states will be legally obliged to accept when they breach the rules.

I wish to tackle the issue of what is known as the blackmail clause. We have been informed that voting against the treaty will mean we have no access to emergency funding in future. The blackmail clause is an empty threat being used to bully people into supporting a treaty that would not otherwise secure the support of the people. It has little or no legal force. It is not an article of the European Stability Mechanism treaty but a recital and it cannot be used to deny funding to a member state if to do so threatened the stability of the eurozone as whole.

There is a better way. Sinn Féin believes that the best way to avoid a second bailout is to cut waste, to implement fairer taxation, to abandon the failed policies of bank bailouts and austerity and to invest in jobs while writing down our debt. It is crucial that our debt is written down, including that associated with the promissory note.

Previous speakers referred to the mantra of "spend, spend, spend." They may have been referring to the contributions of some of the Independent Members. We do not believe in spending for the sake of it. Spending must be done properly. We have done a good deal of spending in the past two years and it has gone down into big black holes. We have not got the jobs that should have resulted and we must be more careful about that. Sinn Féin opposes the treaty and we will campaign actively against it.

See this speech in context