Clare Daly (Dublin North, Socialist Party)

We all now know that despite all the talk of the past period about growth, there will be no agreement on a growth package from tomorrow's summit. This tallies with the hypocrisy of the Government in claiming that it has been leading the charge to deliver growth in Europe. That would be a laughable claim if the consequences were not so serious. The reality is that we have heard platitudes but no details from any of the main economic powers on how growth can be delivered. Yesterday, The Irish Times published claims that productivity and growth could be achieved through structural reform and investment in education and modern infrastructure, support for small businesses and public-private partnerships. It was the same old waffle about job creation and growth.

The structural reforms proposed for Europe are purely based on liberalisation of the EU's Internal Market and deregulation of labour markets. If we had any doubts about that, we need only read the comments by Mario Draghi in The Wall Street Journal. When Mr. Draghi was asked about the most important structural reforms that could help us grow out of the crisis, he drew attention to what he called labour market reforms and the unfairness of the labour market. One might believe he was making a positive contribution until one reads that he decried the security offered to workers who are long established in their jobs and wanted to extend the flexibility many young people in Europe experience by extending three month and six month contracts onto the shoulders of older workers.

What we are seeing throughout Europe is a race to the bottom but job creation does not go hand in hand with measures aimed at driving down demand. Job creation measures will have a marginal impact in the context of the overall reduction in demand required to fulfil the balanced budget strategy on which this treaty is built. The argument that we will require billions of euro in additional cuts to meet those targets has not been answered. The situation will only be made worse by the conditionality on debt reduction. The facts prove that austerity is not working, even in terms of cutting the deficit. The deficit increased from €12.7 billion in 2008 to €18.7 billion this year because of these policies. Stiglitz, Krugman and other economists argue that an economy can never grow on the basis of austerity.

When the first bailout was delivered we were told austerity policies would lead to a growth rate of 3.2% this year. The dogs on the street know we are in a recession and this is the sixth successive year in which domestic demand has fallen. How can implementing and extending those policies of austerity improve the situation? The Government can say all it likes about growth but as long as it is implementing austerity the two cannot go hand in hand.

I ask the Government to put the issue of bank debt on the table at the European Council meeting. It should announce that we are not prepared to accept the impoverishment of our people or the destruction of public services to pay bank debts. Why not follow Syriza's call and refuse to pay interest on the loan? That money can instead be invested in job creation. The ECB has no problem with loaning more than €1 trillion to banks at interest of 1%. Why not demand that the money be loaned instead to Governments in order to fuel job creation? That is the only way we can revive real growth and deliver jobs and a recovery of the economy.

See this speech in context