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

The Government made a mistake. It was wrong to have agreed to the deal. I would like the Taoiseach to explain why the Government issued a statement welcoming the proposal and claiming it provided the basis for long-term stability in Cyprus. Why did he and the Irish Presidency of the Council quietly support the bullying of Cyprus with threats to immediately withdraw liquidity from its banks? The Taoiseach spoke in London recently about how Ireland had not been treated fairly in 2010 - he included his typical partisan digs in the speech - but was happy to support the same treatment of Cyprus just a few weeks later.

As the full details of the final deal have not been properly analysed, we cannot say what it means for Cyprus or Europe. The complete burning of bondholders and shareholders is welcome. It reinforces the fact that equity demands further significant relief for Ireland. The various parts of the troika have not clarified their financial commitments or the terms of the commitments. There is also a lack of clarity about the Russian loans. A first look at the impact of the measures suggests the Cypriot economy will lose 18% of its GDP this year and next. This is a severe recession by any measure. The undermining of the country’s main industry will compound it. Over 150,000 Cypriots are employed in financial services. Even in the absence of the final details, we can see that Cyprus is threatened with a further cycle of escalating debt and stagnation. As a result of the impact of the events of the last week, the Cypriot public has been radicalised and discontent is likely to increase. This has been reported all over Europe and across the globe.

The continued limits on bank transactions show there is great uncertainty about the deal, even among those who agreed to it. We should not allow the introduction of capital controls to pass without noting that the removal and prohibition of such controls have been a core element of the Single Market for decades. Their introduction within the eurozone is unprecedented. This poses a long-term problem for banks in many countries that have substantial non-national deposits. As with previous bailouts, this support programme is flawed because it does not provide a means for helping the economy to transition. It provides no funding to soften the blow of massive and immediate contraction. Clearly, a functioning banking system and sustainable public finances are needed if an economy is to grow. Equally, a recovering economy needs a stimulus. Severe problems will be caused by the failure to provide external support for the real economy and thereby give hope to those facing the impact of the substantial reduction in national income which is about to begin. This failure is reinforced by the decision of the Taoiseach and his colleagues to reduce the EU budget and their rejection of any consideration of the type of transfers that are essential if growth is to return in Europe.

The Commission announced yesterday that it intended to establish a task force on Cyprus. This seems to mean there will be a slight reprioritisation of existing funding and extra loans will be co-ordinated through the European Investment Bank. There will be no direct assistance. We are expecting economies to recover and overcome large debts through structural reform alone, but that has not worked and will not work. The lack of extra funding for regions and countries that are in trouble is damaging the whole of Europe. Stronger economies are losing far more in lost growth than they would have transferred through larger EU budget contributions. Countries such as Ireland have no option but to implement fiscal consolidation, but we should be doing so in a less damaging and less unfair way. Europe as a whole remains one of the world's most wealthy regions. Its combined debt levels are fully manageable. It has the capacity to deliver a stimulus, but it lacks the leadership to act.

It seems from reading the ten pages of conclusions issued after the summit that the leaders chose to spend two days in Brussels ignoring the reality of what is happening throughout Europe. The conclusions are full of statements about how progress has been made and a steady course is being followed. When they are translated into everyday language, however, it is clear that the leaders believe they have already agreed all of the right policies which merely have to be implemented. The air of unreality in the conclusions suggests the Council has given up trying to do anything significant. The main item agreed at the summit was a series of reports on the economic prospects of member states. Any criticism of member states is based mainly on their failure to cut spending or raise revenue fast enough. The European semester process has been reduced to a control mechanism, rather than a genuine effort to agree to economic plans. It has been shown time and again that the policy of control is doing substantial damage in Europe which, unfortunately, is not recovering. Growth projections have been cut and unemployment is continuing to increase across Europe.

The Taoiseach has told us that "jobs and growth" is the slogan for our Presidency of the Council. While he has repeatedly spoken about what is supposedly being done to deliver jobs and growth, the details show that this is more about empty words than substance. The multi-annual budget agreed to by the Council proposes to cut Europe’s ability to help countries. There will be no stimulus provided by the European Union. In some areas, it will promote a further contraction. The budget imposes a severe 10% cut on struggling rural and farming communities, thereby undermining one of Europe’s few successful and properly funded activities. Even though everyone agrees that research and innovation are vital for growth, leaders have agreed to an 11% cut in research funding. On four separate occasions the Taoiseach has talked about taking decisive action on the emergency that is youth unemployment throughout Europe.

He has claimed that Europe has agreed to deliver the "youth guarantee" of a quality education or training place for every unemployed young person within four months. To support this, he has repeatedly mentioned the €6 billion which has been agreed for youth unemployment in the new budget. This is worth examining in detail. There are currently more than 7 million young people unemployed in the Union. The funding is to be allocated across the full period of the new budget and much of it is the repackaging of existing funds. If we put this aside and assume that all of the money is new, this so-called "youth guarantee" involves exactly €122 per unemployed youth for each year of the budget. It is a classic example of wanting to be seen to do something rather than actually doing anything.

What I find hard to understand is why, in the face of this lack of ambition, urgency or engagement, Ireland refuses to speak up for a different approach. It may well be that nothing could dislodge certain governments from their refusal to contemplate giving the EU the funding and policies to actually help deliver jobs and growth. What is certain, however, is that there has been no concerted effort to try to persuade them.

My party’s position is that we reject the analysis of those who blame Europe for this crisis. Certainly, European policies have made it worse in some cases, but the failure is not that of the Union but of its leaders and its members who refuse to operate in the spirit of solidarity and cohesion which is supposed to be the foundation of the Union. We believe there is now an absolutely compelling case for a significant increase in EU resources as part of a wider agreement on a genuine monetary union. This cannot happen if those who represent citizens at the Council table refuse to even raise the issue. The biggest threat to the Union today is not the traditional anti-EU element of the right and left; it is the supposedly pro-EU politicians who indulge in nationalist posturing and refuse to commit to an agenda of making the Union work for all of its members. I welcome the fact that the proposals for the single supervisory mechanism are proceeding, but what I do not welcome is their incomplete nature and the failure to move ahead with the resolution and deposit protection measures which are the other two essential elements of a proper banking union.

As I have said before, the justice of Ireland’s case for further significant relief from banking-related debts gets stronger all the time. The Taoiseach owes it to this House and to the Irish people to explain what exactly he is doing to bring this about. He has yet to publish the requested evaluation of the long-term impact of the conversion of the promissory notes. He has said nothing about the retention by the ECB of profits on Irish bond holdings and he is silent about the impact of the Central Bank of Ireland being forced to sell off its holdings sooner than anticipated.

This was a complacent summit which did nothing to stop the cycle of stumbling from crisis to crisis. Its message was “carry on regardless”. It did not even agree one of the incremental steps which have replaced the desperately needed radical plan for delivering growth and jobs. The world is looking on while the people in Cyprus have been refused access to their own money as the banks have been closed since 15 March. Confidence in the ability of the EU leaders to deal competently with this ongoing issue is at an all-time low and this is worryingly increasing the anti EU sentiment that is growing at too rapid a rate in Britain and across the EU. In the meanwhile, all we have seen from the Irish Presidency is regular press releases over-spinning everything and reinforcing this complacency.

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