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

As predicted six months ago, the Taoiseach is marking the impending end of Ireland’s Presidency with an active programme of over-claiming progress and under-playing problems. It is certainly the case that there have been moves forward in finalising a number of programmes. Our diplomats have once again shown that they are highly professional and effective. They are rightly seen as among the best in Europe. In contrast, the political progress in the past six months has been slight and there has been no significant advance in tackling the most significant economic and political crisis in the history of the Union. While the Taoiseach spends time patting himself and his Ministers on the back, the EU’s agenda today is exactly as it was six months ago. Nothing that has been done in the past six months gets the Union any closer towards helping its 27 million unemployed, towards addressing the core flaws in monetary union or moving to an economic policy capable of delivering growth and jobs.

In some areas, such as the Union’s budget, banking union and the Common Agricultural Policy, developments have been extremely negative. After a period of relative stability brought in last year by the hope of some radical action, even the situation in the sovereign bond market has taken a significant turn for the worse. May was one of the four worst months for government bonds in 20 years. Many commentators are concerned that hard-won confidence in the future of the euro has been wasted by political leaders incapable of doing anything radical except when faced with a potential meltdown. This week’s summit will aptly sum up the lack of urgency or ambition of the past six months. There has been no attempt to get leaders to confront the clear failure of co-ordinated universal austerity or the need to reinforce the foundations of economic and monetary union.

While the Taoiseach broke with the practice of all previous holders of his office and made partisan domestic comments to an international audience, he did not use the Presidency to lead any call for action or to try to change agenda. We are ending this Presidency embroiled in a political controversy for the first time in 40 years. Never before has any person, let alone a succession of elected leaders in the European Parliament, had cause to accuse an Irish Presidency of manipulation or spin. The scale and tone of the reaction against the Tánaiste’s handling of budget negotiations is unprecedented and glibly trying to brush it away is not acceptable.

In the past two and a half years we have all got used to a Government obsessed with spinning every minor development. We have to endure a daily avalanche of press releases and speeches by Ministers praising themselves and exaggerating the significance of their actions. This approach, when exported to a sensitive negotiation, has been explosive. There have been frantic efforts to cover over the traces of what happened last week but the facts speak for themselves. There was no agreement on the budget. The Tánaiste said he could go no further and it was accepted that the Council and Parliament would be presented with a document which represented what he said was the most with which the Council would agree. The majority of the Parliament’s negotiating team explicitly refused to sign up to this. Yet on Wednesday evening the Tánaiste put out a press release where he claimed there had been a “very significant tentative agreement” which represented, he claimed, “a good day for the EU”. He also claimed that all four of the Parliament’s main concerns had been addressed. It was many things, but “a good day for the EU” was not one of them. Irrespective of what now happens, our reputation as negotiators who play everything straight has been damaged.

The strong words of leaders of the main groups in the European Parliament remain on the record and uncorrected. The Tánaiste could have chosen to issue a low-key and descriptive press release. He did not. He did what his Government does every day in the Irish media: put spin before substance.

There will be a deal on the budget, or MFF, because there has to be a deal. The decision of a core of countries to insist on cutting the overall size of the budget means that it will cause damage to effective programmes. It will also ensure that the Union is a marginal player in the urgent work of directly helping citizens in need. However, within the overall cap there is more that can be done. This should have been a constructive engagement between the political leaders of the Council and those of the Parliament. At this point all we can do is to hope that it has not caused too much damage.

The decision to transfer the entire European affairs division of the Department of Foreign Affairs and Trade to the Office of the Taoiseach was a bad one which should be reversed. The great strength of our diplomatic engagement with the Union has been the focus place on it by the entire diplomatic corps. Previous taoisigh handled more complex and difficult negotiations during Presidencies with only a small European section working closely with the Department of Foreign Affairs. It was a model which worked well and there was no need to change it. It is amazing that the formal role of the Taoiseach in a Presidency has been cut while his in-house staff numbers working on the Presidency have dramatically increased.

Specific matters are due to be finalised this week. It would be better to have no deal on the Common Agricultural Policy than a bad deal. The concluding of this negotiation under our Presidency will be no achievement if it is damaging to rural Ireland. The overall funding framework agreed by the Taoiseach and other leaders earlier this year will see the CAP take a major hit. In order to create room for other programmes, the Union’s oldest and most successful support programme is being cut. The right deal is one which recognises both the economic and social roles of the Common Agricultural Policy. A deal which prioritises protecting larger production units should be rejected.

No matter is more urgent for growth and jobs than fixing Europe’s financial system. If banks do not lend to businesses and families then the crisis will continue to deepen. The Taoiseach's remarks this evening confirm that lending to SMEs is contracting across Europe and in this country. Reasonable lending will not return without a strong banking union. Discussions are ongoing and there is likely to be an agreement on part of the banking union framework this week. However, this is no more than one part of the framework and the available information is that it will be watered-down. Agreement to set aside a part of the ESM to fund direct bank recapitalisation has been delayed for too long and it is likely to be completely inadequate for the job required of it. The Taoiseach has again told the House about the great progress his Government is delivering on this issue. He would be better served accepting that what Europe needs is not just an agreement on disbursing ESM funds, but the right agreement, one which is capable of achieving the core objective of giving a sound foundation to the financial system. Independent analyses show that the agreement which is being discussed is too little and too vague. It appears that an amount of approximately €60 billion for bank recapitalisation is being considered. Independent estimates indicate that an amount of up to €1 trillion will actually be required. Even if this is much lower, the market now understands that major national funding for recapitalisations will be required. This is one of the many factors behind recent increases in bond yields. In terms of retrospective recapitalisation, the Government has never stated what, if anything, it is looking for. It has already described the acceptance of a case-by-case evaluation of needs as a great victory. However, what specifically is Ireland asking for? Last year, the Minister for Finance, Deputy Michael Noonan, informed a Dáil committee that he did not see the benefit of selling off the State’s stake in the pillar banks to the ESM – which would concrete our losses. What has changed since then? The truth appears to be that the ESM will be important for Ireland only in the context of future recapitalisations. I strongly support the idea that the ESM should play a role in a proper initiative to deal with the domestic mortgage crisis. While the Government has spent two years saying it has everything is in hand, the Governor of the Central Bank, Professor Honohan, has now stated that the crisis needs to be addressed urgently. In addition, there remains the fundamental point that Ireland has not received full justice for its case for a relief on the impact of bank-related debts. Unlike the Taoiseach and the Tánaiste, the Minister for Finance has generally avoided putting party politics ahead of the national interest. He has consistently stressed how many of Ireland’s debts are directly linked to European policies. Allowing the Central Bank of Ireland to hold its Irish bonds to maturity and returning all euro system profits on Irish bonds to our Exchequer, would be worth €2 billion a year. I am amazed that the Taoiseach has not even mentioned this in public, let alone put it on the agenda for meetings with other leaders.

Many countries have no alternative but to work to immediately cut their deficits while others have a lot more flexibility. The adoption of uniform austerity even in countries with an alternative has caused the most damage in the past two years. It has been self-defeating and has prolonged the recession while widening deficits even further. This has been recognised by every agency except the European Commission. This week’s Council will sign off on a series of country-specific recommendations which mark no significant move from the failed policies of recent years. Ireland should not welcome, let alone promote these, as the Taoiseach has done.

It has been reported that the Government will publish a Green Paper prepared by the Minister for Defence, Deputy Alan Shatter, which will propose that Ireland loosen the triple lock on overseas military engagements. This is happening just as the final countries are formally enacting the Lisbon measures which explicitly address Ireland’s concerns on this matter. It appears that Fine Gael is arguing that Ireland is failing in its European responsibilities and is allowing Russia and China to have a veto over our peacekeeping activities. This is nothing more than an out-of-touch ideological obsession on the part of Fine Gael which ignores the facts of Ireland’s international standing. Few countries in the world are held anywhere near the esteem in which Ireland is held because of its frequent participation in peacekeeping and the wonderful work of our soldiers and gardaí. These missions are not undertaken easily but Ireland does so wholeheartedly and with real impact. The current policy works and it has complete popular legitimacy. There is no reason whatsoever to change it. Such a change will impress no one in Europe and it will contribute nothing to international peace. Instead of sniping at our neutrality, the Government should acknowledge what we have achieved because of it and set out a policy to strengthen rather than to undermine it.

I expect the situation in Syria will be discussed at the Council meeting. The Assad regime, which has been guilty of by far the most violence and the greatest number of killings, is being openly supplied with arms by Iran and Russia. It is now aided by Hezbollah – a client organisation of Iran. In practical terms, the embargo on the rebels has empowered more extreme groups and undermined those who want democracy in Syria. There has been no progress in recent weeks. The regime has gained in strength and has shown no real interest in the Geneva peace process. It appears to believe that it can finish off the rebels and not have to negotiate. If this happens it will be to the shame of Europe and the democratic world that it talked about Syria for so long but could never do anything concrete to help. I am not in favour of a military adventure but the world must not stand by and allow the massacres to spread into new areas. In the second decade of the 21st century we cannot just look away as the Middle East experiences a new mass refugee crisis. Refugees are being refused entry to countries all over Europe and the camp sites in the Lebanon are getting larger every day. This in itself will add to instability in the region.

The past six months has been a time of small developments in the European Union. The programme outlined by President Van Rompuy to the European Parliament a year ago remains unchanged. A period of relative calm brought on by the intervention of Mario Draghi is being squandered because of the complacency of Europe’s leaders. With little urgency and less ambition they have not put in place a credible strategy for jobs and growth. Worse still, they are leaving Europe open to a new debt crisis because of the failure to comprehensively implement past agreements. This summit does not enable a major step forward on any action to resolve the crisis and it is therefore another missed opportunity.

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