Micheál Martin (Cork South Central, Fianna Fail) | Oireachtas source

The Taoiseach has, once again, come into the Dáil to tell us how he and his colleagues in the European Council are on top of things, that they are working flat out on a wide range of policies which are restoring confidence and will deliver jobs and growth. Listening to the Taoiseach's statement one would think the European Union was progressing steadily with calm and controlled leadership. However, the reality is that these very leaders have, once again, undermined confidence in Europe and deepened an already severe crisis.

The events of the past few weeks show the exact opposite of the picture the Taoiseach has presented. A complacent and casual summit meeting produced nothing new. It has been followed by an incompetent and profoundly damaging series of events relating to the situation in Cyprus. A deal originally welcomed by the Government as delivering stability, in fact, threatened financial meltdown. For the first time, a member state of the euro area has publicly announced that leaving is a realistic, immediate option. At a stroke, confidence has been undermined and uncertainty has returned.

The link between sovereign and banking debt has not been broken. Respect for all member states, irrespective of size, has not been shown.

Basic principles relating to the security of average deposits in banks have been torn up. Four years into the crisis, the European Union's first bank run was prevented by closing banks and introducing capital controls which had been banned for decades. The Taoiseach has claimed in the House that progress was made when leaders agreed to keep going with the same economic policies. Ireland, as holder of the Presidency of the Council, has the power to promote new measures. However, the Taoiseach is happy to carry on without proposing a single significant initiative. In the last week no effort has been made to assert the spirit of solidarity that is supposed to underpin the work of the European Union. There has been no accountability. The cycle of complacency and crisis has been reinforced. The Taoiseach remained silent when the head of the Eurogroup and anonymous Commission sources tried unilaterally to exclude bank recapitalisation from the work of the ESM.

The current panic with regard to the situation in Cyprus is the biggest example yet of failed leadership at European level. The impact of the collapse of its two leading banks on the entire Cypriot economy can be directly traced to the write-down of Greek debt that started 12 months ago. That write-down was fully justified. In fact, it might not go far enough. The failure to take any action on the situation in Cyprus until the last possible moment has caused immense damage. The Taoiseach admitted that the impending crisis was not covered by the summit at all, which is an extraordinary revelation.

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