Micheál Martin (Cork South Central, Fianna Fail)

The people voted "Yes" in the referendum on the stability treaty. We would all agree that, as we knocked on doors and travelled the country, there was a genuine fear among the people regarding the future prospects for their children, the country and, more important, dealing with the wider eurozone crisis which is having a direct impact on prospects here. The Taoiseach was in contact with Chancellor Merkel last Friday and it appears that, for the first time, he raised with her the bank debt issue and, in particular, the promissory note issue. The feedback from the conversation does not seem to be positive, particularly from German officials who have been quoted as saying it would send a negative signal. In perhaps what was the understatement of the year one of them said, "We do not see need for movement at the moment." It is generally accepted that the eurozone is facing a make or break crisis. What is required is substantial change and decisive intervention, including a uniform bank debt resolution regime, a deposit guarantee scheme modelled on the American system and a central fund to aid the recapitalisation of risky but saveable European banks. Even agreeing to all of this in principle would bring immediate relief to the markets. However, every time a story points to progress, Germany quickly rubbishes any prospect of same. Germany is entitled to its views and assert its position, but its policy position is profoundly wrong and not serving the euro well. The time has come for the German authorities and the Chancellor to be told directly that either there will be a radical move on euro level involvement in sovereign bonds or the European Union will be dragged into much deeper and sustained economic decline. It is also time for other eurozone countries, including Ireland, to point out that the euro has benefited Germany enormously, particularly in terms of the surpluses it has enjoyed for a number of years and which it is so reluctant to share. The Irish people have tackled our deficit problems with great fortitude, sacrifice and urgency, but a significant proportion of our bank-related debt was incurred only because of wider European fears of contagion. That argument no longer holds water, and the claim that any deal in regard to Ireland's bank debt would set an unacceptable precedent is rubbish at this stage.

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