Clare Daly (Dublin North, Socialist Party) | Oireachtas source

The political approach referred to by Deputy Harris as "the days of auction politics" actually involves democratically elected Governments introducing policies that meet the needs of people and being accountable to the electorate. This Bill, which represents a move away from that approach, proposes to enshrine neoliberal policies in law forever and in perpetuity. If it is passed, we could face the spectacle of a Government that wants to implement different economic policies finding that its mandate, as an expression of the will of the people, is in contravention of our law. This legislation will put the interests of bankers, etc., ahead of the interests of the population.

I agree with much of what Deputy Mathews had to say. Many of the points that were made during the referendum debate have been rehashed in this House in recent days. The outcome of the referendum was largely based on fear, rather than an understanding of the content of the legislation itself. We were told we had to vote "Yes" to avoid a severe budget in the winter. The dogs on the street know that the budget we are facing will probably be one of the most severe we have ever had. We were told to vote "Yes" for a working Europe and to deliver jobs. As soon as the referendum was over, we saw an exodus of jobs. The job creation announcements of recent days have been offset by job losses. The Government made a key announcement when it said that a further 8,000 jobs are to be lost in the public sector. That is the direction in which this is going.

When one weighs the policies that have been pursued over recent years and the strategy outlined in this legislation against the IMF's admission that it got its austerity sums wrong and the fact that we are continuing merrily along the way of austerity, one has to ask whether the lunatics have taken over this asylum. The IMF has made it clear that its calculations were wrong. We did not need the IMF to say that the impact of austerity has been a multiple of what it thought it would be. We know it from our direct experience of the hardship that people in this country are having to cope with every day. The IMF has accepted that it made a mistake and that the pain being inflicted on the patient will kill him rather than make him better. The IMF intends to carry on anyway, however, because that is what it said it would do. That is the logic that underpins the legislation we are passing here today. We have consistently got the growth figures wrong in this country - we have always overstated the predicted level of growth - and they have had to be revised downwards repeatedly. Given that there is no international recovery and domestic demand is being slashed and devastated for the seventh successive year, it is time to call a halt. It is not a good idea to continue with austerity by enshrining it in law. It is a very bad idea. These policies are not part of the solution - they are actually adding to the problem. Those points have to be taken on board.

I wish to make it clear that this legislation is about putting the needs of bankers and bondholders ahead of the interests of ordinary people. In effect, it is about legitimising and normalising the socialisation of private debt. It does nothing to deal with the real issues that are being faced by ordinary people. In recent days, the point has been made that we are being asked to give legislative effect to Articles 3 and 4 of the treaty, which were the most controversial aspects of it, and thereby bring them into Irish law. During the referendum campaign, it was argued that this does not matter because these provisions exist anyway. That is absolutely and patently false. The balanced budget provision in Article 3 is a new one. The idea of confining the structural deficit to 0.5% of GDP is new. That is a fact. That is what we are bringing into law here today.

The Bill also provides that if Government debt exceeds 60% of GDP, the country will be compelled to reduce it by one twentieth the following year under Article 4. I will give a flavour of what that means in reality, setting aside all the statistics, etc. It will present new difficulties for the Irish economy and Irish economic policy. Over the past five years, in excess of €20 billion has been taken out of the Irish economy, with devastating effects. We know that the stated aim of the Government is to take a further €8 billion or more out of the economy in order to meet the 3% targets. This new provision means we are facing the spectacle of just under €6 billion in additional cutbacks. The Government has to say where that money will come from. It did not answer that question during the treaty debate. Will the money come from the cuts in disability payments to those between the ages of 16 and 18 that have been flagged? Will it be found by attacking elderly citizens, for example by taking away their electricity or reducing their rates? Will universal payments like child benefit be taken away? Will 500,000 home help hours be withdrawn? Will the pay of public sector workers be butchered? Will employment levels in the public service be slashed further?

What we are talking about is curtailing public expenditure to deal with a problem that is essentially one of private debt. However, it does not work. The policies we are bringing in are outlawing investment. The only way in which we could actually deal with the crisis is being outlawed by this provision.

We know also that as and from 1 January, when the treaty comes into effect, it is expected that our debt-to-GDP ratio will be just short of 120%, or €200 billion, which will mean a repayment of approximately €4.8 billion a year under the new criteria of the 1/20th debt reduction rule. We have to deal with this. We also have to deal with another feature of the treaty - the ability of one country to bring another to the European Court of Justice for failing to meet the criteria laid down for the structural deficit. This is a new provision which could result in the imposition of penalties of up to 0.1% of GDP on the country in question, which, in the case of Ireland, would be the equivalent of €1.6 billion. Just what this country needs is penalties of billions of euro for not meeting these targets. It is, therefore, extremely regressive legislation.

The establishment of the Irish Fiscal Advisory Council, far from being a blow for democracy, actually amounts to the opposite in that it takes powers away from the elected representatives. It basically states, "You can vote for any Government you like, but, once it comes into power, it is going to be bound by these decisions; therefore, take the pain and get on with it because austerity is here to stay." That seems to be the impression that is being given. We have to add the fact that no economy ever recovered through austerity measures. What we need is not more of the same, as it has been proved that this has had disastrous consequences. Continuing on in the same way is not just foolish, it is also dangerous and damaging to the population of the country. We need something radically different, not this Bill. What is needed has to centre on reducing the debt burden which will not go away. Unless it is addressed, there is no future for the country.

The second thing which has to be done but is not being done is to put people to work. We have a scenario where there was €32 billion in uninvested profits in 2010 alone. Why is the Government not taking measures such as introducing taxation measures and so on to encourage job creation, to ensure jobs are created with the billions of euro in profits being earned on the backs of the people? We have the spectacle of the ECB loaning over €100 billion to banks at a rate of 1% to pay off debts to bondholders. Meanwhile, jobs are being created in wind and wave energy projects in a sector in which we are to the forefront because of geographical conditions, yet what do we hear? The private sector, frothing at the mouth and with its eyes open, is looking at the scale of the benefits to be gained. Why is the State not investing in these jobs, developing the wind turbine energy sector and leading from the front? If we bring in these policies under the fiscal treaty, in effect, we will be outlawing the idea of a State-led programme of public works to put people to work. Instead, we have the ludicrous measures aired by the likes of the Minister, Deputy Phil Hogan, last week, whereby we would have people working for their dole payment by cutting hedges and doing the work of council workers, at a time when the number of council jobs is being diminished. That is not the way forward, which we can say with certainty because these are the policies that have already failed.

I take great heart from the struggles throughout Europe and the developing momentum in Portugal, Spain, Greece and elsewhere, with ordinary people taking to the streets. We see the spectacle of general strikes and Portuguese workers forcing the government to withdraw from a brutal attack which would have resulted in workers losing a month's pay a year. It would actually be pro-European and a gesture of solidarity for us in Ireland to align ourselves with the people concerned and say to them that we are on their side and that their fight is our fight. Part of our reason for doing this should be pursuing a rejection of the treaty and a refusal to provide for it in law. It should mark the beginning of a debate to find an alternative strategy.

See this speech in context