Micheál Martin (Cork South Central, Fianna Fail)

Instead, weak letters, in which the Taoiseach calls for measures that have already been agreed, are sent to other capitals before summit meetings. These letters are then leaked to the media and solemn briefings are given about how the Taoiseach is pushing hard. The current situation is that his overwhelming priority is managing the domestic media, with a whirlwind of empty photo opportunities for local papers. The Taoiseach has reduced to a trickle the level of substantive meetings with foreign leaders and although every week brings news of a new series of meetings between other Prime Ministers, he has been content to opt out. Just as with the promise "not a red cent for the banks", the diplomatic initiative has joined the growing list of abandoned election promises. No doubt the standard schedule of meetings which comes with holding the Presidency of the Council next year will be presented as a major new personal undertaking but nobody will be fooled.

We have an excellent diplomatic service which has always done its job but missing today is direct political engagement in pushing Ireland's position to other countries. The discussions should not be left to a handful of the larger states. There is more than enough common interest between other states to take the initiative and table substantive proposals. The time has come for the Taoiseach to put aside the timid approach of quietly going along with what has already been agreed by others and state clearly what this country believes in. He must state exactly where he stands on the different proposals for banking and monetary, fiscal and political union. The word "fiscal" was almost absent from his contribution today. He must state what he believes is the minimum required to save the euro and return Europe to growth.

One important change in the Taoiseach's position was indicated in his office's leak of a letter to the British Prime Minister, David Cameron, which dealt with Ireland's bank-related debt. For the first time since 2010, the Taoiseach admitted that our obligation to carry all this debt was a key factor in Ireland's being forced out of the bond market. In the past he refused to make this case because it did not suit his partisan political agenda. Now that he has taken this step he needs to go further, set out a clear demand and propose a set of actions we would take in the different scenarios. Well over a year ago the Taoiseach told us a technical paper was being prepared - urgently. The Minister for Finance went to Washington and handed out an exclusive story about the imminence of a new programme of burning unsecured unguaranteed bondholders. This week, however, the bond redemptions continue unchecked and yet again the Taoiseach has stated that Irish debt sustainability is not on the European agenda.

The Taoiseach has chosen to share no information about what is being asked so we are left to get information from other countries. Ireland has laid down no tough negotiating position and has not clearly made the case that this debt must be handled differently from normal sovereign debt. The ECB has publicly made the case that there is moral hazard involved in treating this debt more leniently. In response our Government has failed to make even the most obvious arguments. What about the moral hazard in letting reckless lenders escape untouched? What about the moral hazard in telling countries that play by the rules they will not be allowed to benefit from subsequent changes in policy? What about the moral hazard in leaders and institutions obsessively promoting an orthodoxy which has clearly failed? What about the moral hazard in refusing to show respect for the view of all states within the Union? With a large and secure majority and major movement on policies not available before last year the Government has succeeded in negotiating exactly nothing which was not developed for others first and then applied to all states.

The point has long since arrived where our Government needs to set out a bottom line. With an attempt at market re-entry not scheduled until late next year, we must set out a bottom line in regard to what debt we believe is sustainable. It is clear from other capitals that they do not know what Ireland's basic need is and all they are hearing is that everything is on course. If everything is in on course then why would they change anything in regard to Ireland?

We should say unequivocally that, at a minimum, to return to the market successfully the remaining promissory note funds should not be allowed to become core sovereign debt. They should be placed on lengthy terms which lift the extra burden being imposed on already tough adjustments. The Taoiseach should cut out the vague generalities and speak directly. To save the euro there must be a new approach.

Today, as much as at any time in the last three years, there will be no relief from the sovereign debt crisis unless the markets regain confidence that they will get back money they lend. Contagion has happened and is escalating. There is little to distinguish Italy and Belgium from the five countries already unable to freely borrow and the borrowing costs of others continue to rise. There simply is not enough money in place to show that governments will be able to finance their deficits and refinance their debts in all reasonable circumstances. The ESM is a good development and, at a minimum, it must be leveraged. This may break rules on monetary financing within the eurozone but surely it is better to change these rules than let them bring down the currency they are supposed to underpin?

The ESM should not be used on the secondary bond market. This would use up vital reserves and simply continue to provide an opportunity for investors to exit the market. The interventions by the ECB on the secondary market have not contained the crisis and the involvement of the ESM will not do so either.

As the growing reserves placed on deposit in the ECB and a range of other indicators highlight, the Depression-era evidence that more direct action is required has been more than confirmed. We should not waste precious time and resources on a policy which has failed. Instead of working to fund bailouts we should be doing everything possible to stop them being necessary.

If the leaders really want to agree measures to tackle the crisis, they should also signal that they are willing to take a dramatic initiative to both fund urgent needs and show a credible pathway to long-term sustainability in public debt. The mutualisation of debt in some form is inescapable. At the less radical end of what could be done, the idea of a European redemption fund is exactly what is needed. Under this funds would be used to guarantee debt over a certain level. It would limit exposures, reduce debt costs and provide a stable foundation for reaching a sustainable long-term debt position. It is also originally a German idea and is compatible with Germany's basic law.

The €180 billion stimulus talked about last week, and to which the Taoiseach alluded in his speech, is nothing of the sort. The proposal is €60 billion in project bonds issued by the EIB with some form of common guarantee. The rest is due to come from co-financing and private-sector leveraging. This is no stimulus and it is no help. The countries most in need do not have the co-financing and cannot add further to their general government debt levels. As proposed, the countries likely to benefit are those that least need help. We need more than generalised conclusions or recommendations from the Council, we need specific insistence that there can be applications to countries like Ireland. I ask the Taoiseach not to return to this House next week once again making inflated claims about decisive steps to fund growth and jobs. The project bonds are a minor distraction from the real business of restoring confidence and transferring funding to regions in need.

The meeting on Friday is likely to see agreement on some form of greater banking union. If this is limited to a handful of large cross-border banks, it will be irrelevant. A single monetary policy needs a single core banking regulator. There can be no opt-out for powerful regional banks.

In regard to the proposed financial transactions tax, no one has produced even the most basic analysis of how this could operate on a selective European basis without costing tens of thousands of jobs and huge investment. It is a good idea to constrain the speculators but this will only be done if all significant financial markets sign up. The current proposal would deal a dramatic blow to financial services in participating countries and we should have nothing to do with it.

There has been a lot of briefing about making a decisive move towards real fiscal and political unions. From the available information no such unions are being proposed. The models being promoted in the media simply involve a further heightening of budgetary controls on eurozone members. Genuine fiscal and political unions involve a significant and flexible transfer of resources between members. The redistribution of surpluses between states is the core of the fiscal and political union of states in the United States of America. The way in which this matter is being discussed goes to the heart of whether leaders are serious about tackling the crisis. Germany and others have to be called-out on the way they refuse to acknowledge that a large part of the surpluses they are jealously protecting were generated because of the flaws in the euro which have engulfed others in deficits. Without a transfer union there can be no fiscal union and it is time to stop pretending otherwise.

The timid approach of our Government and many others must stop. The Taoiseach needs to end his policy of sitting quietly on the sidelines refusing to speak directly when urgent needs are being ignored. Wringing his hands about Germany is no substitution to setting out a policy and lobbying for it. Unless he actually tries to work with others to persuade leaders to take a different approach, he can achieve nothing. The Taoiseach should stop talking about technical papers and set out what we think we need on promissory notes to return to the market next year. He should stop mumbling about vague ideas and set out clearly what reforms he thinks are the minimum required to save the euro and end the crisis. He should stop putting media spin ahead of the harder and more important work of pushing Ireland's position.

Many respected commentators fear that it is already too late for Europe. We need our leaders to understand the gravity of the situation. The cost of their failures last year is already high and there was some acknowledgement of that in the Taoiseach's opening remarks.

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