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

I favour Giovanni Trapattoni's chances more than those of the failed strategy of the EU leadership, including the Government. We are listening to the same stuff as before. We are told we have turned a corner and the worst is over. We hear talk of bank deals and all the other points made by Deputes. This smacks of unreality. What is being dished up for the citizens of Europe is a continuing diet of austerity.

Respected Nobel prize winning economists, and not only radical socialists, have repeatedly said the problem is being misdiagnosed and the wrong solution prescribed. Austerity has never turned a situation around. It was tried in the 1920s, in Latin America and in Asia. It never worked. As Joseph Stiglitz said to International Bar Association conference in Dublin earlier this month, it has only succeeded in turning downturns into recessions and recessions into depressions. The eurozone is now heading for recession not only in the peripheral countries, but in the heartland, with the second successive drop in GDP.

The IMF has admitted that it got it wrong and that its calculations were wrong. It is not surprising; we know that from the statistics. What is surprising is that the European leaders continue to go down that path. It is a toss up whether the charge should be gross incompetence or criminal negligence.

The consequences of these actions can be seen most desperately among the population of Greece due to the shrinking of that country's economy and the desperate hardship. It is happening everywhere else across Europe as well. There is the madness of the massive €3 trillion being hoarded by private interests and not invested in job creation, while 25 million people are unemployed. That is the contradiction at the heart of the EU and I do not foresee any way forward being pointed out at this meeting. The meeting is taking place against the backdrop of emerging differences between many of the leaders rather than addressing the problems in Greece and Spain. The Germans are pushing for more fiscal discipline and further surrender of economic autonomy. What will be the Taoiseach's response to that?

It is clear now that it is not a case of if the Greeks will exit from the euro but when they do. What will the contagion effect be in countries such as Spain or Italy? There are divisions even in the heartland of Germany. The predominant interests want to keep the eurozone together. If the Germans exited the eurozone, they would have serious problems. They would face having a strong deutschmark and being disadvantaged competitively when selling into the shrinking market of a crisis-ridden eurozone. It is not in their interests to do that. There is a contradiction, however, because the summit is tinkering around the edges, looking at issues such as the banking situation and the ECB increasing its supervisory role and so forth, while it is demanding commitments and contracts on an annual basis relating to structural reforms in the labour market and so forth. I cannot see any way out of this unless the banking debt is dealt with.

There is probably a more important meeting taking place in Europe tomorrow, a meeting of the European Trade Union Council. It represents 60 million workers across Europe and will meet in Spain tomorrow. It is putting forward the idea of an international movement of ordinary people throughout Europe and putting the interests of workers and ordinary people and public investment in jobs and job creation before bailing out failed banks.

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