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

December’s meeting of the European Council produced no major breakthrough or even any significant news. It involved a series of general discussions and the formal noting of decisions signalled long in advance. In spite of this it was a very significant meeting. It will be remembered as the summit where Europe’s leaders effectively announced the end of any attempt to introduce radical reform in the face of the biggest economic and social crisis in the Union’s history.

Faced with an unprecedented challenge, the Taoiseach and his colleagues have agreed no more than incremental steps. They have not agreed a credible long-term programme to return sustained growth to the eurozone or the European Union as a whole. They have decided to be bystanders in the fundamental challenge of job creation, putting their faith in the mantra that deflating economies through universal austerity and market reforms will magic growth in a manner unprecedented in modern history.

For Ireland this has many implications, none of which is good. While the Taoiseach maintains his priority of putting public relations first, he has refused to address the absence of any real growth strategy at European level. No economist in the Union or in any country has increased their growth and employment predictions arising from the Council's agreements. It has not happened here and it has not happened in any country.

While the Taoiseach has told us on a number of occasions that everything is looking up for the European economy the evidence is that the eurozone is lagging dramatically behind other economies, including the United States and Britain, both of whom were hit as badly at the start of the crisis but are well ahead in terms of growth rates, employment creation and deficit reduction. A restoration of confidence is important. Everyone wants a broad and strong return to growth. The problem is that every time the growth fails to materialise the hit to confidence is much more damaging.

While the communiqué repeatedly states that policies are working there was clearly also a decision to nod to the reality of the mountains of contradictory evidence. Buried in the middle of the communique is the statement that the recovery is "modest, uneven and fragile". The president of the European Central Bank, Mario Draghi, has gone even further, saying that he is extremely concerned about whether growth targets will be achieved and that he believes that deflation is a real risk. While we have seen positive signs here and the Government is in full campaign mode to claim credit for everything, the situation is equally fragile. A two-tiered recovery is the best that it can be described as.

SMEs continue to find credit difficult to obtain, regional disparities are growing and the Government has missed every growth target it has set since taking up office. In spite of these warnings what we got was another summit without the urgency or ambition required to address the serious flaws in the work of the Union and their deep impact on its citizens. Leaders have declared themselves "out ' the gap" and are now mainly focused on finding ever more creative ways of exaggerating the impact of their decisions.

The Taoiseach has once again delivered a complacent report from a European summit. He has fully subscribed to the new orthodoxy that everything is working and no major changes are required. He has also signed up to an agreement which has explicitly ended any prospect that stimulus funding would be available through the Union or from most national budgets. He has not referenced this but it is there in the final conclusions.

The length and depth of the crisis which has hit most of the eurozone was not caused by the absence of stronger controls of national budgets. Even the principal architect of the euro, Jacques Delors, has said that the root cause of the crisis felt in Ireland and elsewhere is to be found in fundamental design flaws in the euro. These involve the lack of a banking union, the limited mandate of the European Central Bank and the absence of central funds to help countries stimulate their economies.

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