The strategy adopted by many of the leaders, including the Taoiseach, was to return to the issue in October but that strategy has failed to progress the work of the summit.

Were it not for the actions of Mario Draghi, there is no doubt that we would be in the middle of another panic. With his decision to face down the destructive orthodoxies of the Bundesbank, a major step was taken to restore at least some long-term confidence in the sovereign bond market. It was a move which came three years too late. Ireland and Portugal would have avoided the need for international support if the OMT facility had been in place in 2010. Spain would not have seen the mounting pressure of the past year and others would have had to divert fewer resources to rising interest payments. In contrast to the way Jean Claude Trichet was conservative and restrictive, Mario Draghi has been aggressive and ambitious. Unfortunately, he appears to be against a major move on dealing with the Irish promissory notes, a matter to which I will return.

In the three months since the June summit, there has been no significant progress on any matter within the competence of the European Council. There has been no progress on a banking union, on structural reform, on the Union's budget or on debt sustainability. Unfortunately, there have been significant steps backwards. The joint statement of three finance Ministers setting limits to their interpretation of the agreement reached in June was the logical outcome of lack of preparation which preceded the negotiation and the failure of countries, such as Ireland, to engage with them intensively in the weeks after the summit. At the same time as they were issuing their statement, our Government was briefing journalists that everything was going well and on course for delivery in October. There is no reason to believe that this week's summit will mark a significant step forward.

The Taoiseach and Tánaiste have undertaken no diplomatic initiative in recent weeks and have tabled no proposals for the summit. Given that the Taoiseach has not supplied any material for this debate, it is necessary to seek it in Brussels. On Monday, President Van Rompuy circulated the agenda and background documents for the summit. Ireland and debt sustainability are not mentioned, the only relevant point is to be found in the document he circulated about the future of economic and monetary union. On page 3 of the document, it states: "During the transition phase [to a bank resolution scheme] and after the establishment of an effective Single Supervisory Mechanism, the ESM will have the possibility to recapitalise banks directly, relying on appropriate conditionality." This is almost word for word the interpretation of the agreement reached in June that was included in the statement of the German, Dutch and Finnish Ministers.

The Taoiseach, however, has been very vocal in the Irish media banging the table and saying a deal is a deal. What is now clear to anyone who bothers to look at the evidence is that there was no agreed understanding of the agreement reached in June because no serious background work went into it. On the first night of the summit, the Taoiseach and the Tánaiste agreed to move on to the next business without any agreement on banking debts. They were so convinced that nothing was happening the Tánaiste flew home.

The success of the Italian and Spanish prime ministers in demanding a new policy opened up a possibility for Ireland which was acknowledged in the final communiqué. While the Taoiseach was busy patting himself on the back and praising his negotiating skills, he once again over-spun a development. Ireland does not need the same support which Spain is seeking. Ireland wants fairness in the handling of banking-related debt which we took on in the interests of wider European solidarity and which the Taoiseach acknowledged in previous statements. The Taoiseach has consistently failed to push this argument because it gets in the way of favourite partisan attacks, of which we had an element earlier. What the Taoiseach also consistently refuses to acknowledge is that in February of last year, before the change of Government, our partners in Europe had already agreed to the principle of addressing the sustainability of our debt. Yet over a year and a half later, no major push has been made to achieve this. Time and again it has been a case of hoping that something comes along.

The promissory notes are the core of our issue. They were created as an exceptional measure to address an unprecedented situation and where the ECB and EU demanded the full honouring of these debts. The interest payments are returned to Government through the Central Bank, so it is the repayment of the principal which matters. They are not standard sovereign debt and they can be restructured in a way which lifts their unreasonable burden on the Irish people. Mario Draghi is right when he says that the European Central Bank is precluded from the simple monetary financing of government which would be involved in writing off the promissory notes. What it can do is to extend their duration markedly so that they do not oblige unreasonable and growth-destroying austerity. They are a technically complicated instrument but the solution is not particularly complicated.

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