Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

The discussion on this Bill offers us an opportunity to discuss the concerns raised by Members such as Deputy Donnelly about bailouts and how they work. It also offers us to a brief opportunity to reflect on the announcement made this morning in the United Kingdom and what that means for the future both of Europe and of Ireland. It is worth reflecting on what happened this morning before we address some of the issues colleagues have with this Bill.

If today marks a significant and historic change for Britain and its relationship with the European Union, we should be clear that the same could be true for us. In 1961 and 1973 the prospects for our membership of the European Union were profoundly intertwined with what was happening with our neighbour. Since then, if the UK is our neighbour as determined by geography, it has also become our nearest ally in many cases. That has been determined by common policy positions that in turn have been driven by a confluence of national interests. The speech by Prime Minister David Cameron today is the latest and potentially one of the most historic consequences of the global economic crisis. Let us consider what he said.

Earlier Mr. Cameron stated that a referendum verdict leading to a UK exit would be a "one-way ticket, not a return". His core argument can be summed up with one sentence: "And when we have negotiated that new settlement, we will give the British people a referendum with a very simple in-or-out choice to stay in the EU on these new terms or come out altogether. It will be an in-out referendum." We must recognise, therefore, that while the announcement marked the end of a debate about when the speech would be given and what would be in it, it was also the start of a much more significant and historical journey for the UK, which will have strategically significant consequences for our State. It is greatly ironic that just as the idea of a "Grexit", or the exit of Greece from the EU, recedes from the horizon, a "Brexit", or the exit of Britain from the Union, takes its place. The only thing that is certain about the journey that started today is the prolonged uncertainty it will engender on a number of levels.

What is the prospect for the opening of treaty negotiations, which the UK fundamentally needs to commence its resettlement? Does the announcement not make the commencement of negotiations and a new treaty less rather than more likely? What is Prime Minister Cameron looking for? The UK is not in the eurozone or the Schengen area but it wants to remain in the Common Market and a party to the common security, foreign and defence policy arrangements. Will concessions in the areas of working time and the common justice policy be enough to salve the elements of British society, media and politics that are looking for either an exit or a new settlement? These are all major questions, which do not have clear answers. However, it is certain that the efforts to provide those answers will require significant energy and commitment. The simple reason for that is for a member state to secure a change in treaty or policy area, it must be approved by every member state.

While simplicity is absent from potential answers to the questions raised earlier, we can have simplicity in the principles of an Irish response. I am struck by three initially. First, we must make clear to those looking on that there is no equivocation in our membership of the Union now nor will there be in the future. Second, many of the questions raised by the Prime Minister require an answer. Questions relating to democratic legitimacy, a lasting solution to the eurozone crisis and competitiveness are in our national interest to have answered. Third, for outside investors and buyers of government debt, Ireland can offer certainty about crucial areas that the UK cannot such as continued access to the Single Market, access to a banking union and a role in future policy formation within the EU.

We should examine where the Union and the eurozone stand now compared with the worst fears articulated over recent years. Recent and reasonable fears that have pervaded public debate include whether the euro would break up; whether nation states, both small and large, could fund themselves and avoid the spectre of an unplanned sovereign default; and whether Greece would stay in the eurozone and Ireland could avoid a nightmarish Pandora's box if an unplanned exit took place. Where are we now? Interest rates on government debt are falling, particularly on that of so-called peripheral states; the exit or ejection of any country from the eurozone is currently off the agenda; and the ECB's commitment to play a more active role in government debt markets, the passage of the stability treaty and the foundation of a banking union all show early but firm movement towards a more stable economic union. Many figures, both in this Chamber and elsewhere, have denied that any of this would happen and they are, curiously but understandably, silent now.

However, we must also be clear that despite these achievements, much remains to be done and we cannot be complacent about that. First, there must be a resolution to the debt crisis. The reminder today that debt to European income levels are stuck at almost 90% of national income shows the vast amount that remains to be done. Second, there must be a rekindling of economic growth without which everything becomes impossible to achieve. All we can see is that the worst fears of the past have not materialised for now and they appear unlikely to materialise tomorrow. That is a very important claim but it is also a fragile one, which should encourage us to do more, not less. That is why this Bill is important and should be supported. Initiatives such as this play a vital role in putting in place the foundations for a more stable and robust currency and economy in the future, capable of meeting the needs of the people it serves. Vicky Price, in her recent book,Greekonomics, writes of the absence of such systems when she notes: "We ended up with a monetary union as a preamble to a political union that consisted of countries that simply did not form an optimal currency area." She concludes: "The no- bail-out clause, now of course breached repeatedly was the axis on which the euro deal rested. The euro would never have got started if there hadn't been agreement on a no bail out clause."

Bailouts are in place in three countries. People who oppose mechanisms such as this must answer a simple question. If they are opposed, where will struggling states find the money to fund their public services if they cannot borrow on the financial markets? Is opposition to bailouts not a recipe for greater austerity? This is not the same as saying that previous or current bailouts were well done, fair or well implemented. The lack of burden sharing among all creditors and the lack of market access for some bailout countries, including our own, were either mistakes or injustices. However, the basic question remains. In the absence of bailouts or aid programmes, how can countries unable to borrow fund their public services? Bailout programmes pose major political and ethical challenges. Countries in them do not want to be in them, while countries outside them do not want to pay for them. Whatever about the economics of bailouts, the politics could strangle Europe.

It is a stark reality that if the Union is seen as a debt collection agency for amoral and parasitic banks by one group of citizens in European society and seen by a different group as a mechanism by which a group of hard working, productive and financially sensible citizens pay for the feckless, easygoing and partying lifestyles of another group, then the failure of European institutions is almost certain. As those perceptions collide, I struggle to see how the spirit we will need to depend on throughout Europe is capable of flourishing. These sharp rocks of public and political opinion may be ephemeral and less stark than the immediate and visible reaction of financial markers, but they are no less lethal and no less capable of sundering the project of European integration. Ireland will play a part in avoiding this fate by becoming the first European country to exit a programme. While we accept the need for these programmes, Ireland must be determined to avoid becoming trapped in one.

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