Pádraig Mac Lochlainn (Donegal North East, Sinn Fein)

I will start by taking us back a few steps. To understand where we are now, we must look at where we came from and how we got here. Sinn Féin's criticism of the Maastricht treaty and the proposition of economic and monetary union related to the idea of a one size fits all policy working. We said having a single interest rate for all of the eurozone would not work. During our economic bubble, we could have done with raising interests to slow down the overheating of the economy that we are all paying for now in such a profound way. Unfortunately that was not within our gift. Economic policies served the interests of Germany, in particular, and other core states.

The free flow of money from the core European banking system out into the periphery was another factor. In Greece's case, this was done with the assistance of false reporting by Goldman Sachs on the strength of the Greek Government's sovereign capacity, and in Ireland's case it was done through investment in private banks. The combination of artificially low interest rates and cheap credit in Ireland was like crack cocaine. The average person watching television at home was told he or she would be crazy not to buy property, that house prices were only going one way and he must get on the train and be quick about it. The practice of the old prudent bank manager, where he would lend three and a half or four times a person's annual salary where that person could provide a 10% deposit to prove he had the capacity to save, was thrown out the window while the moral hazard of incentives for bank managers for approving 100% plus mortgages and further loans was introduced.

The crisis did not have its genesis in Irish folly and recklessness, although it was encouraged by the Government and economists and bankers whom we were told were prudent and sensible. This mess is of its nature a European one caused by the distortions created by economic and monetary union. When Europe was forced to face the reality that monetary union was failing badly, with a series of bailouts, it failed again. Rather than countering the recessionary - even depressionary - cycle, it has gone the other way to become pro-cyclical. It is an insane policy.

This is a European crisis by design but has the burden been shared? Absolutely not.

If debt brakes and deficit ceilings could have solved or prevented the Irish economic crisis, I ask those on the "Yes" side to explain why, for most of the years of our membership of the eurozone, we stayed within the Maastricht criteria of a 3% deficit ceiling and 60% debt to GDP ratio. It was only when we were saddled with the banking debt that we fell outside them. Even those mechanisms failed to identify a fundamental failure in our economy.

People have referred to the fact that 20% of our tax revenue came from construction alone. It was out of kilter. We were building 95,000 houses at the peak of the boom for a population of 4.5 million. It was almost the same number as was being built in Britain, with a population of 60 million. It did not take an economist to figure out that something was badly wrong, yet none of the Maastricht criteria succeeded in addressing those fundamental failures. How will they work now? If they had been the solution, we would not have had this crisis in the first place.

In an article in Monday's New York Times, which was reprinted in yesterday's The Irish Times, the Nobel Prize winning economist Paul Krugman commented on the crisis in Spain in particular and in the eurozone in general as follows:

When the bubble burst, the Spanish economy was left high and dry; Spain's fiscal problems are a consequence of its depression, not its cause. Nonetheless, the prescription coming from Berlin and Frankfurt is, you guessed it, even more fiscal austerity. This is, not to mince words, just insane... Rather than admit that they've been wrong, European leaders seem determined to drive their economy - and [just as importantly] their society - off a cliff. And the whole world will pay the price.

Krugman went on to criticise the fiscal treaty as locking in "fiscal austerity as the response to any and all problems". Another Nobel Prize winner for economics, Joseph Stiglitz, has described the European response to the crisis as a "mutual suicide pact". That is very strong language for an eminent economist. Their comments were echoed by yet another world renowned economist, Nouriel Roubini, who correctly forecast the current crash:

Thanks to the fiscal compact, even the eurozone's core will be forced into front-loaded recessionary austerity... The trouble is that the eurozone has an austerity strategy but no growth strategy. And, without that, all it has is a recession strategy that makes austerity and reform self-defeating, because, if output continues to contract, deficit and debt ratios will continue to rise to unsustainable levels. Moreover, the social and political backlash eventually will become overwhelming.

That is dramatic language from another internationally renowned economist analysing what is taking place in Europe.

Krugman, Stiglitz and Roubini reflect a widespread view that the EU has misdiagnosed the economic crisis. The proposed new treaty seeks to assign that misdiagnosis the status of constitutional law. It is akin to a doctor prescribing an inappropriate treatment to a patient and then legally debarring the patient from exploring any alternative treatments. This is why opposition to the treaty is growing across the eurozone, and it is those voices of opposition that I principally wish to draw to the attention of the House, not least because the voices from the rest of Europe that the House and its committees have heard from so far have all been in support of the treaty. There is serious concern internationally and across Europe about the direction being taken.

I wish to respond to some of the comments from the other side of the House about Sinn Féin's historical analysis. It is as if Sinn Féin was on the margins of Europe in its constructive criticism of the direction Europe has been taking. I argue that we are in the mainstream of social democratic or left wing thinking in Europe. At times that is in the majority but currently it is in the minority. However, in the near future it will be back in the majority again, and we are right at the centre of it in our analysis of the dismantling of social Europe. Those who have a very right wing analysis believe in light-touch regulation, privatisation, liberalisation, breaking down public services and driving back workers' rights and entitlements. That approach has led to this crisis. We let the financial markets and the banks roam free and we now have this catastrophe in Ireland and in Europe.

I will now focus on some of the commentary from across Europe. Before doing so, however, I remind the House of the background to the first Lisbon treaty referendum in Ireland. It did not come out of nowhere. There was a proposition to have a European constitution, drafted by the mandarins and the elite in the corridors of Brussels and Strasbourg. It was put to the people of France and meetings were held across that country in town halls, libraries and public buildings, but the people rejected the proposition. It was not for xenophobic or regressive reasons but for progressive reasons. They wanted to reclaim the vision of Europe that Francois Mitterand, Jacques Delors and others had, so they rejected the European constitution in the referendum. The people of Holland did likewise. It was only afterwards that Europe closed down the constitution and repackaged 98% of it into what was to become the Lisbon treaty. The Irish people were the third to reject the proposition, and Sinn Féin was not alone on the fringes of Europe but at the centre of it in constructively and critically taking on those who were stealing the dream that was social Europe.

With that in mind I will turn to some of the commentary in Europe on this treaty. It is clear that when Sinn Féin calls on the Irish people to vote "No" to the treaty it is not to isolate Ireland from Europe but to strengthen our bonds with people across Europe who are sick and tired of austerity, unemployment and their public services being systematically dismantled. There is a very good chance that Francois Hollande will be the next President of France. We are familiar with the term "Merkozy", the partnership of Angela Merkel and Nicolas Sarkozy and how it has pushed forward and pushed everybody else aside. That will come apart if Francois Hollande is elected. Interestingly, the BBC reports today that he outlined a number of reasons for opposing the treaty and what he would seek to renegotiate it. It included dropping plans to anchor deficit reduction rules in countries' constitutions. That is a huge statement. He is making clear, among other things, that to attach these arbitrary draconian targets, particularly to countries that are in a programme, are struggling and are saddled with banking debt, is insane. This is possibly the next President of France, somebody with whom we will seek to build strategic alliances.

Doctor Herta Daubler-Gmelin, a former Minister for Justice in the German Government, is pursuing a constitutional case for a referendum on the treaty, saying: "I am all for Europe, just not one determined by political elites". Dr. H.J. Witteveen, a former Minister for Finance in the Netherlandsand a former director of the IMF, calls the treaty "unreasonable and dangerous". Again, that is strong language. The Social Democratic Party in Sweden has argued that, "Sweden should not transfer power to decide on financial policy from Riksdagen [the national parliament], nor give the European Court of Justice the possibility to decide on sanctions on the basis of the Fiscal Compact". Also in Sweden, the EU legal expert of the national trade union confederation has said:

Budget policy and financial policy is being dragged out of legitimate democratic institutions in favour of a supranational technocracy. Democracy at the national level is being hollowed out, and it is not replaced by a new supranational democracy.

This view is shared by the head of the Danish central bank, who told the Danish Parliament: "I think that what we are seeing at the European level is the bureaucratisation of economic policy".

The Swedish trade unions are in line with the European Trade Union Confederation which has, for the first time ever, opposed a treaty. Of course, this is not an EU treaty but a number of member states have signed up to it, if not yet ratified it. Does this not say everything? The European Trade Union Confederation whose members passionately believe in a social Europe now sees that the dream could be lost if this direction is taken. The confederation says:

The new Treaty is only stipulating more of the same: austerity and budgetary discipline. It will force member states to pursue damaging pro-cyclical fiscal policies, giving absolute priority to rigid economic rules at a time when mosteconomies are still weak and unemployment intolerably high. It will bring downwards pressure on wages and working conditions.

The Portuguese campaign for an audit of their national debt, representing a broad swathe of Portuguese civil society, is similarly opposed to the treaty. I quote the campaign:

Sooner or later, this treaty will be revoked because countries will be unable to comply with its conditions. Until then, it will make austerity harder and more aggressive. It is not a treaty on stability, co-ordination or governance but a treaty on austerity, inequality and destruction.

Heikki Patomaki, Professor of World Politics at the University of Helsinki, Finland, slates the treaty's anti-democratic nature. I quote him:

The exceptional provisions allowed for under the terms of the fiscal compact are hostile to the basic principles of democracy, as is the fact that the compact gives rise to legal norms which override EU member states' own constitutions, and which cannot be changed by democratic means. In a democracy no rule or principle can ever be set in stone, but must always be adapted to the possibilities and constraints at hand. From this perspective, Merkel's idea of unending budgetary discipline is anti-democratic.

Yiorgos Vassalos, of the highly respected Corporate Europe Observatory organisation, a long time monitor of how big business influences the EU policy agenda, notes that:

The fiscal treaty mirrors the proposals of big business lobby groups to strengthen the Commission's capacity to determine the economic policies of EU member states. The fiscal compact would transfer excessive new powers to the European Commission, an unelected body with strong links to corporate lobbies.

National parliaments would lose control, while no democratic control mechanism is foreseen at the EU level. Thus the fiscal compact spells out an authoritarian form of economic governance at EU level.

A wide swathe of opinion is opposed to the treaty. I could talk about the Dutch labour party and German social democrats. There is widespread concern across Europe at the implications of this treaty.

Our people should have the freedom and capacity to look at this treaty on its merits or demerits and make their decision. I appeal to the Government to cut out the nonsense about conditionality of access to European Stability Mechanism funding, the blackmail clause. The Government has not ratified the European Stability Mechanism. It holds a veto in terms of the amendment to Article 136. Sinn Féin brought forward a Private Members' motion asking the Government not to introduce the ESM legislation until the people had their say on the austerity treaty. I commend the Government on having done that.

The Government must now allow the people decide on the capacity of the treaty for stability, as the Government claims, or austerity, as we argue, and make up their own minds without this threat. The Government can undertake not to implement the ESM treaty and the conditionality that comes with it if the people reject this treaty. It should defend the Irish people's interest and state that this is wrong.

Ministers and Deputies from the Government parties have said the austerity treaty is not a big deal and that we already have its measures in the six pack. If we are meeting the commitments of the six pack, are the poster boys for austerity and are complying with the requirements of the troika, who are in Ireland at present to make another tick on our scorecard, how can we be refused access to ESM funding? This is an empty threat, but a threat nonetheless. I appeal to the Government to remove that threat, which it has the power to do, and give the people capacity to make up their own minds. The Government cannot say to the Irish people that they will be isolated within Europe if they reject the proposition when I have just read out the range of public opinion across almost every member state that is stacked against the treaty.

People are disgusted and disillusioned. They believe the political institutions of Europe have failed them and have moved away from the promise of a social Europe and the positive achievements of the European Union towards a big business dominated agenda. Mario Draghi, president of the European Central Bank, Mario Monti, the technocratic Prime Minister of Italy and Lucas Papademos, the technocratic Prime Minister of Greece all come from the Goldman Sachs stable. This is insanity. Our people see those at the higher echelons who caused this crisis being rewarded. There are those in the trade union movement across Europe who refer to this treaty as proof of a right wing coup. Is that what we want? Do we want more Thatcherism or more equality? Do we want more of the promise of social Europe? That is our challenge.

Our people should not have this threat hung over them with the compliance and assistance of our Government. If that threat is removed we can have a proper debate with space for the Irish people to have their say.

See this speech in context