Micheál Martin (Cork South Central, Fianna Fail)
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Cé nach raibh cúlra géarchéime taobh thiar den chruinniú seo an tseachtain seo caite, i mo thuairim, is oth liom a rá, níor thuig ceannairí na hEorpa cé chomh práinneach is atá an sceál fós ó thaobh cúrsaí eacnamaíochta de, go háirithe easpa creidmheasa, mar a dúirt mé ar maidin, do chomhlachtaí beaga agus meánmhéide, ní amháin ar fud na tíre seo ach ar fud na hEorpa. Nílim sásta ón méid a tharla gur thuig daoine go bhfuil sé riachtanach i bhfad níos mó a dhéanamh chun níos mó tacaíochta a thabhairt do na comhlachtaí seo ionas go rachaidh cúrsaí eacnamaíochta i bhfeabhas. Ní léir ó na cinntí a rinneadh an tseachtain seo caite go bhfuil sin ag tarlú.

Thankfully, last week's European summit had none of the sense of panic which gripped many of last year's gatherings. Unfortunately, it also lacked any great sense of urgency. Nothing on the agenda would suggest that this was a gathering of leaders whose countries are slipping back into recession and who continue to face an unprecedented debt crisis.

The summit's conclusions contain many big claims concerning action under way, but little detail to provide optimism. It remains the case that the European Union has no credible growth agenda and is at best delaying, rather than preventing, further a major crisis.

The heads of eurozone countries issued a separate statement which directly mentioned a number of big issues facing the block including the new programme of support for Greece. The early indications are that the programme will not succeed. The debt level which Greece will have after the restructuring of its debt is still too high and the absence of any potential investment for growth means the target figures are almost impossible to meet. There is a real need for the Union to step in with a significant increase in its support for growth enhancing measures. There is no doubt that Greece needs to remove a wide range of practices which have undermined its ability to grow. However, their removal is not enough. A real chance for Greece to recover requires other special measures, which should include an increase in its EU budget allocation and special funding for business investment by the European Investment Bank. The sacrifices of the Greek people and the commitment of their Government must be recognised. I hope the Taoiseach will take the opportunity to reject publicly the damaging and disgraceful attacks on Greece which have emanated from the usual anonymous sources in different capitals.

At the end of their five-paragraph statement, the leaders of the eurozone countries included the sentence that they "recall their determination to do whatever is needed to ensure the financial stability of the euro area as a whole, and their readiness to act accordingly." Throughout this crisis the language of action has been devalued dramatically. Each statement of resolute determination has been followed by the reality of entrenched orthodoxies. Pre-crisis policy positions have changed but fundamental red lines remains intact in spite of clear evidence of the need for a more radical departure. If it is genuinely true that the euro leaders have a determination and readiness to ensure the financial stability of the zone, then a much more assertive agenda is required.

As I stated repeatedly over the past year, lasting financial and economic stability in the eurozone can only come when the design flaws of the euro have been fixed. These include the need for a much larger budget to address national economic shocks, a reform of the ECB and strong central regulation of the financial sector. None of these points is even been mentioned, let alone addressed. I will return to this wider reform agenda later.

Fianna Fáil welcomes the signature of the fiscal treaty on Friday, not because it is the answer to Europe's problems but because it is only one part of the answer. It was not a good day for the Union that two member states were not present for the signing. The fault for this is to be shared equally between those who were pushing the treaty but made little effort to achieve unanimity and those who were looking for an opportunity to appease real or imagined eurosceptic opinions. There is nothing in this treaty which affects either Britain or the Czech Republic. Their failure to sign it is a demonstration once again that eurosceptics can find threats in anything at all.

For Ireland, the lack of unanimity in the signing of the treaty at least demonstrates that this is not a typical European Union treaty. Every EU treaty requires every country to ratify it before it can come into effect. This maximises the potential negotiating position of each country and it also makes leaders more respectful of each other's positions. There is no such requirement for the fiscal treaty. We do not have a veto power over its operation. Therefore, the question for Ireland is a much simpler one: is it good for Ireland?

I believe that there is a positive and practical case for the treaty which must be made if the current high level of support for ratification is to be maintained. There are serious downsides to voting "No", but Ministers should back off their default position of emphasising the negative consequences of a "No" vote. The Minister for Finance, Deputy Noonan, predicted the collapse of the euro. The Minister of State, Deputy Creighton, called this a wise statement and others have spoken of colossal damage. Let us not get sucked into the game of the sceptics who have already undermined their case by the shrill prophecies of doom which they have been trotting out in recent weeks.

Equally, Ministers should remember that they can not pass this purely with voters of their own party. They need to put aside the sharp partisanship which characterises most of their public comments and adopt a more consensual and credible approach. Speeches dominated by such nonsense as the claim to have transformed Ireland and its international standing are not winning them votes and are getting in the way of setting out a coherent case for the treaty.

There are two major benefits for Ireland in this treaty which are enough in themselves to achieve a strong "Yes" vote. First, it will provide Ireland with a major reserve which can be called upon to keep funding State services if the financial markets will not lend to us. At the weekend, one Sinn Féin representative made the ridiculous statement that Europe would just have to give us the money if we needed it, whether or not we vote for the treaty. This is part and parcel of a deeply cynical politics which claims it can make all problems go away with no consequences.

Second, the framework of the treaty and the potential to access ESM funding will make access to market funding easier and cheaper. In fact, if the ESM facility had been available in 2010, it is highly likely that Ireland would not have needed any international help.

The various left-wing parties in the House, opponents and their allies outside the House have been arguing that this should be termed the "austerity" treaty. In fact, exactly the opposite is true. Ireland needs to borrow money, not only to finance deficit spending but also re-finance existing borrowing. The cost of that borrowing will have a bigger impact on the money available for public services than anything in this treaty.

No-one can question the basic fact that the availability of the ESM facility will give greater confidence in the market for State debt. Greater confidences means lower interest rates and lower interest rates mean more money for public services. If one takes the most conservative estimate possible and assumes that the treaty and ESM back-stop will reduce the interest rate on Irish debt by 1% over time, that is more than €1 billion every year which will not have to be paid in interest. That is a large benefit to Irish taxpayers which will be available before any of the other provisions of the treaty have an impact. It is the exact opposite of the increased austerity which the treaty's opponents claim.

On fiscal rules, we should note how common they are in countries which have welfare states and standards of living which many here envy. In Sweden, for example, the social democratic party in government viewed fiscal rules as the protector of the welfare state, not its threat.

One element we do not need in the debate here is the distraction of false claims suggesting that these rules would have prevented the crisis. In the decade before the crisis, the European Commission never suggested that there was a structural deficit here, and actually praised fiscal policy. The "never again" argument does not stand up to even basic scrutiny and it takes time away from much stronger arguments. During last week's debates, quite a few speakers referred to the issue of the promissory notes. They have nothing to do with this treaty and are not available to us as a bargaining tool in seeking a reduction in their cost. There should and will be a significant move in the cost of the promissory notes. They were required purely because Ireland was acting in the interests of the wider European financial system and they are structured in a way which is completely different from normal sovereign debt. It is this different structure which makes changes relatively easy. The European Central Bank can in the morning lift the bulk of the burden of the notes without any risk of contagion. Equally, no one can credibly argue that lengthening the term and changing the payment conditions of the notes will have any other significant impact on the wider European economy.

This is a Government which is today claiming to have skilfully negotiated the reduction in interest rates on the bailout even though the reduction was four times what is was asking for and is available to every country receiving funds. If the one-year briefings to journalists are any guide, it will run out of superlatives in praising itself when the promissory note reduction comes. In truth, a lot of time was wasted last year by the failure to put the issue on the agenda of any significant meeting.

As I have said consistently for months, there is nothing to fear from holding this referendum. As was shown in the revised Lisbon proposal, the pro-EU position can actually grow during a referendum campaign. The key is to talk to people directly and put a positive case.

The Taoiseach has talked repeatedly about a number of growth measures agreed at this summit. Individually, they are welcome. Ireland will benefit from the measures if they are agreed as legally enforceable actions rather than declarations of good intentions. However, the measures taken together are not actually a growth agenda. They are a slight quickening of the pace of measures already under way, which will have a marginal impact on growth and competitiveness. For example, the European research area is a great idea but there is nowhere near enough money in its budget to have a major impact, nor is there any discussion of providing it with enough funding.

There was a lot of choreography before the summit, with Prime Ministers combining to call for things to be agreed which were already likely to be agreed. Each has then been in a position to give speeches about how they are tabling papers and pushing a growth agenda. A genuine growth agenda requires a much more radical discussion and one which includes addressing the core flaws in the design of the euro. What we need now is to push for this more radical discussion to begin and be used as the basis of the new treaty, which is due within five years at the most.

On page 8 of the summit's conclusions it is stated that it was agreed to carry forward work on a range of tax measures, including the financial transactions tax and the common consolidated corporate tax base. Neither of these taxes has any place on the agenda of an organisation which is focused purely on getting through the crisis and returning to growth. The G8 and G20 summits will be important in developing international co-ordination. It is already clear that the non-EU members of these groups are deeply impatient with the fact Europe refuses to use all of its resources to tackle its own crisis. Several of the larger members of the Union are members of these groups, as is the Union itself. There is a real need for the Union to have a distinct position at these meetings and not allow a situation where national positions are presented as European ones.

I welcome the extension of candidate status to Serbia. President Tadic and his Government have made enormous strides in a very short time. I hope their progress through the accession process will be as fast as possible.

There is a growing sense of drift in regard to the neighbourhood policy, with little urgency evident in the Union's work. Now is not the time to back off from the task of challenging our near neighbours to adhere to democratic standards and to work with them on development. In particular, the situation in the Ukraine is becoming grave. As we have recently seen in regard to one case relevant to Ireland, the legal system is backing off from basic protection for international investment. Domestically, the situation is much more serious. The imprisoning of Ms Yulia Tymoshenko, the lengthy term she has been given and the conditions she is being held in are unacceptable. We need to speak clearly and in a united voice to the Ukrainian Administration: adhere to basic democratic norms or there will be consequences.

The situation in Syria continues to get worse by the day. The strong words of the summit are welcome but not enough for the besieged communities of Homs, where the scale of slaughter by the regime is clearly escalating. Russia and others have played a deeply dishonourable role in giving comfort to the regime and vetoing international action through the United Nations. Europe must introduce comprehensive sanctions against every element of the regime and those who support it, and should prepare direct aid for the opposition. The recognition of the Syrian National Council is welcome and every state should support it. The people of Syria are demanding their freedom and they will not be denied. In the face of gruesome repression, they are making unimaginable sacrifices. Europe must stand with them in every possible way.

Gerry Adams (Louth, Sinn Fein)
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My copy of the Taoiseach's statement had an extra page appended to it. While I am not sure it is usual, it is an almost idiosyncratic way of undermining his remarks because it tells us it was composed by a person, updated by a person and modified by a person.

Enda Kenny (Mayo, Fine Gael)
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I did not see it.

Gerry Adams (Louth, Sinn Fein)
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I thought I would share that with the Taoiseach as part of the little foibles of this institution.

As the Taoiseach knows, this crisis is about more than economics, bank bailouts and promissory notes to criminal banks; it is about people. The choices Fine Gael and Labour, like Fianna Fáil before them, are making are putting unbearable pressure on our people.

The evidence is all around us. As we discussed earlier, I heard it last Friday in Mayo from rural dwellers who are at breaking point as a consequence of the Taoiseach's commitment to austerity. It is his policies which are stripping local communities of essential services – schools, guidance counsellors, hospitals, teachers, post offices and Garda stations. The Government is also adding new stealth taxes such as the universal social charge, the household charge, VAT increases, motor tax increases and septic tank charges. Almost 500,000 citizens are unemployed and, by the Government's own estimate, that figure will have changed little by 2015. Small indigenous business, including small farmers, with no real support from the Government or credit from the banks, are going under. Natural resources are given away and now State assets are to be sold off. A whole generation of young people are being forced to leave. This GAA generation is playing our Gaelic games in Brisbane, Birmingham and Baltimore instead of in their own parishes. All of this will worsen if the treaty the Taoiseach signed last week in Brussels is ratified.

The Taoiseach, the Tánaiste and Deputy Micheál Martin - the three "Yes" men of Europe - are asking the citizens to support a treaty that will enshrine the policies of austerity into our Constitution in perpetuity. Deputy Kenny said he wanted to be the Taoiseach who restored economic sovereignty to this State, but this treaty will achieve the opposite. It will seriously undermine what remains of Irish sovereignty by surrendering important fiscal and budgetary matters to unelected and unaccountable EU officials in the European Court of Justice and the European Commission. These institutions will be allowed to impose harsh economic policies on democratically elected Governments and to impose heavy fines where they believe these policies have not been adhered to. The Commission is also given new powers to impose economic partnership programmes on states in breach of its debt and deficit rules. These will be programmes of so-called structural reform similar to those in the current EU-IMF austerity programme, even where a member state is borrowing on ordinary terms from the international bond market.

By placing these rules and enforcement mechanisms in an international treaty and giving it the protection of the Constitution, the Government clearly intends to make these obligations permanent and to straitjacket future Governments and their ability to adopt different strategies. This is unacceptable. Three months ago, the Government stripped €3.8 billion out the economy, which caused real hardship. It is already committed to slashing a further €8.6 billion from the economy in the next three years to meet the troika deficit programme target of 3%. However, the austerity treaty now demands an additional structural deficit rule of 0.5%, which means a further €6 billion in cuts and new taxes will be imposed.

This does not add up. More austerity deepens the recession, increases the deficit and makes economic recovery more difficult.

The citizens of this State simply cannot afford this policy and this treaty. As part of this process the Government also agreed that ratification of the fiscal austerity treaty is necessary to access emergency funding from the European stability mechanism, ESM. The Taoiseach could have tried to stop this linkage but it was his choice and he chose not to. Now he is calling on citizens to vote for the austerity treaty to ensure access to the ESM in the future. The Taoiseach is also saying this is about "whether we wish to participate in the European community, the euro and the eurozone". That is no more than a cynical attempt to bully voters into supporting a bad treaty. It is also an empty threat. We cannot be expelled from the eurozone or the European Union. The Taoiseach knows that. He also knows the European Council will not refuse emergency funding to any eurozone member state in the future, irrespective of its position on the austerity treaty.

Enda Kenny (Mayo, Fine Gael)
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How does Deputy Adams know that?

Gerry Adams (Louth, Sinn Fein)
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Éist liom. To do so would be to break the commitment given at the European Council summit of 21 July 2011 when the leaders said they were "determined to continue to provide support to countries under programmes until they have regained market access, provided they successfully implement those programmes."

It would also have a devastating impact on the eurozone as a whole, if they did the contrary to what has been outlined, something no EU politician would be willing to risk. The policies of bank bailouts, promissory notes and crippling austerity, supported by Fianna Fáil, Fine Gael and Labour, have failed. There is an alternative which, once again, I commend to the Taoiseach. He should use the National Pensions Reserve Fund with its €5.3 billion to invest in jobs and growth. He should combine this with the resources of the European Investment Bank and utilise that to invest in various projects to get people back to work and to reinvigorate the economy.

We must cleanse the European banking system of toxic debts through a new round of rigorous stress tests and deleveraging followed by recapitalisation, where necessary, funded by the European Central Bank. The Taoiseach is negotiating the terms of the payment of interest rates and other elements of our debt but he must do much more than he has done. He must call a halt to the €3.1 billion annual payment to Anglo Irish Bank which will cost Irish taxpayers up to €76 billion before it concludes in 20 years' time. Extending the time will not help.

Next week Sinn Féin will launch a detailed analysis of the Government's austerity treaty outlining our alternative strategy for stabilising the economy, creating employment and reducing the State's debt and deficit. I will send copies to the Taoiseach and the Tánaiste. In the referendum campaign Sinn Féin will ask citizens to reject the treaty. The ard chomhairle met on Saturday and we considered all of these matters.

Eamon Gilmore (Dún Laoghaire, Labour)
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As always.

Gerry Adams (Louth, Sinn Fein)
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We believe this is the only sensible option for citizens in this State. I urge the Taoiseach to make speedy progress toward setting the date for the referendum. Let us have a fair, informed and informative debate and let the people decide.

Pádraig Mac Lochlainn (Donegal North East, Sinn Fein)
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I am sharing time with Deputy Adams.

Paudie Coffey (Waterford, Fine Gael)
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We did not seek the agreement of the House for that at the outset. Is it agreed that Deputy Mac Lochlainn will share time with Deputy Adams?

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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No.

Paudie Coffey (Waterford, Fine Gael)
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He has time.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Only joking.

Paudie Coffey (Waterford, Fine Gael)
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Agreed.

Pádraig Mac Lochlainn (Donegal North East, Sinn Fein)
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I wish to deal first with the comments of Deputy Micheál Martin, who referred to Sinn Féin's position on the treaty campaign as cynical. To be honest I find it amusing because I remember the then Minister of State with responsibility for European affairs, Mr. Dick Roche, Deputy Martin's Cabinet colleague, say there would not be a second vote on the Lisbon treaty. He assured people they would have only one bite of the cherry and that there would not be a second vote. He then went on to lead us into a second campaign when the Government did not get the answer it wanted the first time. That is very cynical. In the second campaign the economic crisis had just begun to emerge and people were deeply alarmed and fearful for their future. The campaign slogan was "Yes for jobs, yes for growth, yes for prosperity". We now know what all of those assurances got us. I call that deeply cynical. We in Sinn Féin are not going to take lectures from Deputy Micheál Martin about cynicism because the evidence is that as the then Minister for Foreign Affairs and a senior member of Fianna Fáil he played a significant role in those two campaigns. He should not use such words as "cynical" because we can get copies of his quotes and statements if he wants. It would be advisable for Deputy Martin to move away from name-calling.

The Government never dreamt it would be in this position. It sought to avoid a referendum by all means. In the negotiations the two things that were achieved - or conceded - by our negotiators were, first, the insertion of the words "preferably constitutional", which was obviously aimed at avoiding a referendum, and acknowledged as such by the Tánaiste. Second, we had the insistence of Mrs. Angela Merkel's government that a stick would be introduced to beat our people with on conditionality such that we could not access the European stability mechanism funding unless we agreed to the treaty. That is what the Government achieved in order to try to avoid putting the proposition to the people and to give Mrs. Angela Merkel's government a stick to beat us with if we did find ourselves in that position. That is some achievement. It is a remarkable betrayal of the people by the Government in those negotiations.

Unfortunately for the Government the first part has not worked, as after much deliberation the Attorney General has reported back that the Government has no choice but to put the treaty before the people. Sinn Féin received considerable legal advice and we would have taken the Government to court if necessary. We believe we would have achieved the same outcome. The Government has done what it did not want to do and now we are in the middle of a campaign.

In considering the conclusions of the European Council I am conscious that I am speaking as the Tánaiste and leader of the Labour Party is present in the Chamber. The conclusions are all about right wing politics. Mr. Fintan O'Toole is considered to be a left wing commentator, someone the Labour grassroots would read assiduously every week to get their direction on the way the country is going. He reported that the treaty outlaws Keynesianism. It enshrines right wing ideology and a right wing view of how we should run our affairs across Europe. The more one looks at it the more shocking it is that any member of the Labour Party in this country, or anyone who is part of the left historically in Europe, could agree to it.

Point No. 9 of the conclusions refers to shifting taxes away from labour. That sounds good; that it will take the weight off working people but one must ask whether we are going to have wealth taxes. Are we going to ask those at the higher level to pay their fair share? It does not; what it means is that we are going to cut public services and the welfare state across Europe. Why does it not say that when that is what it means? There is a right wing intent. The conclusions also refer to increased efforts to make it easier and more attractive for employers to hire people where necessary by improving wage-setting mechanisms. That reads well but one can translate it to mean reduced wages and making it easier to sack people. An unravelling of the social Europe is taking place as we speak by the very people who caused the crisis - the right wing ideologues. Point No. 15 refers to a reduction in the administration and regulatory burdens at EU and national level and the removal of barriers to the creation of new jobs. That translates to a recipe for light-touch regulation, which is more right wing ideology.

I can understand Fine Gael, whose history is as an avowedly right wing party, supporting the conclusions but for the life of me I cannot understand how the Labour Party could sign up to this power grab by the right in Europe. If the Tánaiste is not happy with my assessment of matters he should look at the comments of his MEPs. We are being told the treaty will formalise the six pack and various other measures to which we have agreed and that this is a good way to run our affairs. However, this is not what Labour Party MEPs are saying and we will be quoting their comments to the public during the course of the referendum campaign. We will also be quoting them and the damning analysis of the treaty by Mr. Jack O'Connor, a Labour Party member and senior trade unionist, to the Labour Party grassroots. At some point the Labour Party will have to question its reason for supporting the approach being taken to tackling the crisis. I do not think it believes in that approach; I hope it does not. What we are witnessing is a right-wing revolution which outlaws Keynesian economics, the potential of a government to stimulate an economy, to intervene in a recession or counter the cycle, which has always been the position of the left. This has been our approach to addressing crises since the Second World War. Mr. Fintan O'Toole summarised this best yesterday and it must have been painful for Labour Party members to read his analysis. The Labour Party will have to endure a lot more pain during this campaign because we will be reminding the grassroots, its members and the people what it stated previously in comparison with its enthusiastic support for the treaty.

Shane Ross (Dublin South, Independent)
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I wish to share time with Deputies Clare Daly, Richard Boyd Barrett and Mick Wallace.

Paudie Coffey (Waterford, Fine Gael)
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Is that agreed? Agreed.

Shane Ross (Dublin South, Independent)
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I thank the Taoiseach and the Tánaiste for making time available for us to debate the outcome of the summit. While I was interested in what the Taoiseach had to say, he did not mention the elephant in the room which must have been hanging over him at the summit, namely, the Anglo Irish Bank promissory notes which were conspicuous by their absence. The report from Brussels mentions at length matters which are not the subject of this debate and omits the matter which is consuming the interests of the people who are interested in hearing - it is obvious something is about to happen - what deal will be made on the promissory notes and how it will affect our relationship with the European Union and the referendum. Regardless of how often members of the Government - it is obvious not all members agree with the treaty - dissemble or pretend that the two issues are not related, they are related in the public mind.

There is no doubt but that if the Government gets a good deal on the promissory notes, it will have a better chance of getting the treaty through in a referendum and it should not be ashamed or coy about this. If it is seeking a better deal on the promissory notes, it should be trumpeting this from the roof tops. If it succeeds, it will be easier for it to sell the treaty to the people in a referendum and acknowledge that the promissory notes should never have been given in the first place. Let us be honest and make the connection. This is what is going to happen. It is welcome that there will, undoubtedly, be an announcement by the Government on the promissory notes. I have no doubt that this announcement will affect the timing of the referendum, as stated by the Taoiseach.

Dara Murphy (Cork North Central, Fine Gael)
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Will the Deputy then support the treaty?

Shane Ross (Dublin South, Independent)
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Like any sensible person, I will study the terms attached to any deal. The Government must first acknowledge that the two issues are related, following which it will be better able to sell the treaty in a referendum. There is a direct relationship between the two issues, just as there is a direct relationship between the public sector cuts made and any relief the Government might receive on the promissory notes. This is an important and relevant issue and I wish people would stop pretending that it is not. This pretence is based on the fear and trepidation of European leaders. I regret that in every speech he makes on this issue the Taoiseach feels it necessary to pay tribute to one leader or another and say the EuropeaN Union would welcome this or that. We should not feel compelled on all occasions to pay tribute to Mr. Von Rompuy, as the Taoiseach did, and say the European Union would welcome our participation in this treaty. Of course, it would welcome it. If that is the case, let us ask it for something in return. It would not only welcome our participation in the treaty, it also believes it is vital because the treaty was drawn up specifically for countries such as Ireland, Greece, Portugal, Spain and Italy. If it wants us to sign up to it, it should give us something in return for our support.

The Taoiseach mentioned a relevant and interesting matter. He said that if we were to sign the treaty, we would have access to the ESM. One can see from a mile off that this will be the main selling point of the treaty. The focus of those on the "Yes" side and the "No" side will be the ESM and whether we will have access to ESM funds.

Paudie Coffey (Waterford, Fine Gael)
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The Deputy must conclude.

Shane Ross (Dublin South, Independent)
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I will finish on this point. The Taoiseach went on to say that if we were to sign the treaty, investors and lenders would have increased confidence in doing business in Ireland. I suggest he is conceding that there will be a second bailout, as was made absolutely clear by Moody's and other objective commentators in the past few days. We are preparing for a second bailout, but the Government is stating nothing about it, just as it is stating nothing about the Anglo Irish Bank promissory notes.

Clare Daly (Dublin North, Socialist Party)
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It is an incredible indictment of the weakness of the Government's position that the best reason advanced by the Taoiseach for voting in favour of signing the treaty is that if we do not, Ireland will be frozen out in terms of access to funds in the future. We all know that the reason is the insertion of the so-called blackmail amendment. Even if the Taoiseach did not initiate that provision, it is clear he consented to same. This is akin to the Government giving someone a gun and then running a campaign stating it must defend itself because it is afraid it will be shot. What is worse is that while the treaty which includes that clause has not yet been put before the House, the Government is acting as though it is already in place. I have no doubt that the Government is working feverishly behind the scenes to secure a deal on the promissory notes so as to make the vote on the treaty more enticing. Even if all of the promissory notes were written off, the treaty should still be rejected.

Despite what other colleagues have said, including Deputy Micheál Martin who now appears to be a great supporter of the Labour Party's position on the treaty, this is an austerity treaty. One only has to read the text to realise this is true. In this regard I refer to some of the provisions of the treaty, in particular the one highlighted by the media again today on the balanced budget rule contained in Article 3 which requires a structural deficit of 0.5%. This target, if exceeded, will trigger cutbacks, extra taxes and penalties and fines by the European Court of Justice of in the region of €150 million.

No one can define "structural deficit". The figure differs depending on to whom one speaks. The IMF's position differs from that of the European Commission and so on. Who will make the decision? As stated in today's edition of the Financial Times by Mr. Martin Wolf, it is akin to putting an immeasurable concept into law, which is mad. The Government is proposing to hand over responsibility for making the decision on what the target will be to the Commission. We know that Ireland will not have to abide by this clause until after 2014 when it comes out of the bailout process. However, according to the Department of Finance, by 2015 Ireland will be running a deficit of 3.7%. The Government wants us to vote for the treaty which enshrines a 0.5% target which, as has been outlined, will result in an extra €5.7 billion being taken out of economy which is already stagnating and coming to a halt because of austerity. Article 4, the debt reduction provision, similarly requires a massive amount of money to be taken out of the economy. Did the Council consider that the impact of its austerity measures will be pretty much as it already has been, namely, European economies grinding to a halt, massive unemployment and severe conditions for ordinary people? Moreover, this is not once-off austerity. What is being proposed here, through provisions of binding force and permanent character, is an ending of any expansionary fiscal policies. A Labour Party Government that seeks to put into law a measure that would outlaw economic policies - even Keynesian, let alone socialist policies would be outlawed in the future - reflects the huge journey the Irish Labour Party has taken almost 100 years since its inception. Not only is this proposal ideologically flawed, it also is practically flawed and constitutes bad economics. It is bad for the economies of Europe and is bad for Ireland because it would stop any programme of meaningful public investment and public works against a backdrop in which thousands of people are queueing overnight on the streets of Cork to leave this country to find employment elsewhere. At a time when the private sector is failing to invest, despite increased profits, the only area from which investment can come is public expenditure and Government funding but, in essence, the Government is attempting to seal off that avenue. This treaty is a disaster and should be opposed.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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There is a grand deception at the heart of both the Government's description of the events at the European Council meeting of 1 and 2 March and the Council meeting itself, because the Council meeting is packaged with lots of pious and noble phrases about jobs, growth-friendly consolidation, restoring normal lending, promoting growth and tackling unemployment. One must talk about such matters because they really affect hundreds of thousands of people in Ireland and tens of millions of people across Europe. These are the issues that must be addressed but which absolutely are not being addressed. While one gets such pious phrases to make people think something is being done about those issues that really affect them, the heart of what actually happened at the Council meeting comprised signing up to a treaty that will inflict Greek-style disaster on the rest of Europe. It will spread it across Europe to Ireland and other European countries. A sort of Orwellian doublespeak lies at the heart of what the Government and European leaders are doing, as well as at the heart of the fiscal treaty and all the so-called bailout programmes. While one hears talk of bailout, solidarity, assisting other states and of stability and growth, in fact a brutal austerity attack is being planned on the living standards and public services of working people, young people and the unemployed across Europe.

This attack already has devastated Greece, which has led to hundreds of thousands of people being driven out of their jobs, the slashing of the incomes of workers and the poor by approximately 20%, the making homeless of tens of thousands of people and the robbery by multinationals of the state assets and enterprises of Greece. This has produced an economic collapse of 7% in Greece, with a similar collapse predicted this year. All this is being done simply to protect the bondholders and the banks which turned the European economy into a casino economy. This treaty now proposes to extend the same destructive logic to the rest of Europe, lock it in legally and preclude governments from doing anything other than inflicting such savage austerity on ordinary people.

On the one hand, the treaty states that under no circumstances can one borrow to finance job creation, economic development or growth. As other speakers have noted, from henceforth that will be banned. On the other hand, it is insisted that this country, Greece, Italy, Portugal, Spain and anyone else who has debt problems must borrow to pay off the debts of the bankers and gamblers. It is a classic example of there being one law for the rich and another for the rest of us. The banks and bondholders must be protected, as must the euro, and if that means sacrificing the jobs, living standards and the economic social future of this country and the rest of Europe, then so be it.

I find it extraordinary that at the heart of the statement to emerge from this gathering, the Government somehow has managed to twist it so that a crisis caused by private financial institutions has something to do with public spending and deficits. This is not the reason we are in economic crisis. Spain and Ireland had budget surpluses before the crisis. Having a balanced budget would have made no difference to the question of whether this economy would have plunged into crisis. It was because of the activities of the banks yet it is those banks the Government seeks to protect. It makes ordinary people pay and robs them of the ability to emerge from the economic crisis.

Mick Wallace (Wexford, Independent)
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I note that yesterday, the EU statistics office, EUROSTAT, released figures showing a collapse in household spending, exports and manufacturing that has taken the life out of the eurozone economy in the final months of 2011. Output within the eurozone shrank by 0.3% from the third quarter. Government cuts, increasing indirect taxation and rising unemployment are having a devastating effect on many parts of Europe and there is little doubt but that austerity will neither spur growth nor boost employment. One did not really expect it to so do and it is disingenuous to try to suggest it will. Many problems exist with regard to the structure within Europe and if European monetary policy is run according to German interests, structural imbalances will remain. In this context, why do the Germans not drive up wages, increase domestic consumption and import more? That would help to even out some of the Continent's imbalances and would be more productive in the long term than driving austerity down the necks of the countries on the periphery.

This austerity is so devastating that I note the Spanish Prime Minister this week stated that Spain would not meet the 4.4% target but was aiming for a target of a deficit of 5.8%. Moreover, he did not announce this at the Council meeting last Friday but stated it was none of the Council's business as it was a sovereign matter. That is interesting and could be a new development. Moreover, the Dutch, who have been one of the cheerleaders for austerity, now acknowledge they will not reach the deficit target of 3% over the next three years. Instead, they predict deficits of 4.5%, 4.1% and 3.3% in 2012, 2013 and 2014, respectively. Will the Dutch be fined because they are going to break the rules? Fines are supposed to be imposed on them.

Dara Murphy (Cork North Central, Fine Gael)
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As they are not in a programme, they differ from Ireland or Greece.

Mick Wallace (Wexford, Independent)
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I acknowledge it is a different programme but the Dutch programme states they were meant to reach a target of 3% for each of the next three years. Consequently, they now are in line for a fine. The Dutch had calculated they would need €18 billion in cuts, spread over the next four years, to meet their 3% target but they now will be obliged to make cuts of €15 billion next year alone. It will be interesting to see whether the Dutch will impose €15 billion in cuts next year to meet the targets to which they were signed up, as they are meant to be fined. Moreover, given the Netherlands was one of the countries next to Germany in respect of performance, it will be extremely interesting for the rest of us to see whether the rules will apply to the Dutch in that manner.

There is little doubt but that things cannot continue the way they are at present. Austerity will not solve the problems and to reiterate a point I made in the Chamber yesterday when discussing Greece, the cuts sadly have left one in five unemployed, which has driven up the suicide rate by 40%. The European crisis is about more than economics, as there is a huge human cost and Members do not need me to outline all the results and social consequences of such cuts, because they are dramatic. Ireland, Greece, Portugal and Spain are already feeling the effects of the cuts that have been made and they are beginning to have an impact in Italy. The Italian people do not know what is going to hit them. The Germans will be obliged to engage in a serious U-turn because the medicine they have prescribed may be good for their country but it is certainly not good for others.

Paudie Coffey (Waterford, Fine Gael)
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There are approximately ten minutes remaining for the question-and-answer session. I call Deputy Ó Fearghaíl.

Seán Ó Fearghaíl (Kildare South, Fianna Fail)
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Notwithstanding Deputy Ross's valid point on the behind-the-scenes discussions relating to the promissory notes, is the Tánaiste in a position to elaborate somewhat with regard to when the referendum will be held and when the Referendum Commission will be established? Is he concerned that it is going to be extremely difficult to hold the referendum prior to the summer?

The Taoiseach alluded to the growth measures included in the communiqué issued in the aftermath of the summit. It must be noted that these are measures rather than enforceable actions. In addition, the budget that would be required to enable the country to benefit enormously from these measures is not in place. Will the Tánaiste elaborate further on the position in this regard?

It has been our contention for some considerable period that in order to bring about lasting financial and economic stability, the initial design flaws in the euro must be addressed and the ECB must be reformed in a fundamental way. Was this matter discussed at the summit and does the Tánaiste have any comments to make on it? What does he envisage happening in respect of it in the future?

It was stated in the conclusions published after the summit that further work will be done in respect of a range of tax measures, including the CCCTB and financial transaction taxes. Neither of the latter would be in the interests of Ireland's economic development. In addition, initiatives of this nature would be questionable in the context of overall European growth at this juncture.

The Tánaiste will attend a meeting of the Joint Committee on Foreign Affairs and Trade this afternoon to discuss the situation in Syria. The crisis in that country is deepening. One is obliged to express grave concerns about suggestions put forward by Senator John McCain and others in recent days that the US should consider launching air strikes against Syria. Will the Taoiseach and the Tánaiste use the opportunity afforded them by their upcoming visit to the United States to raise this matter with the authorities there?

Eamon Gilmore (Dún Laoghaire, Labour)
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Deputy Ó Fearghaíl raised quite a number of issues. On the promissory notes and the point raised earlier by Deputy Ross, the Government was, prior to any discussion on the fiscal compact treaty, already engaged in a process of negotiation on those notes. That process is quite separate from that relating to the fiscal compact and we intend to ensure this remains the case.

In the context of the establishment of the Referendum Commission, I am sure everyone will agree that there is a need for a reasoned debate on the treaty. By that I mean people should engage in a debate on what is actually contained in the treaty and on the nature and significance of the treaty itself. It is important that sufficient time be made available for that debate. Earlier this week, the Government engaged in an initial discussion with regard to the approach we might take in respect of the referendum. As a consequence of that discussion, I will bring a memorandum to the Government in the near future in respect of both the establishment of the Referendum Commission and the introduction of the necessary legislation. A referendum Bill will be required and this must be brought forward. The Government has not yet decided when the referendum will be held. However, it will address that matter shortly.

Deputy Boyd Barrett stated that the references in the communiqué to growth and jobs are mere words. If we had not succeeded in ensuring the inclusion of a commitment on growth and jobs in the conclusions, certain Members would be humming a different tune in the House today. The Government is extremely clear about the fact that the resolution of both the economic difficulties in Europe and the problems which are giving rise to instability in respect of the euro will not be confined just to what is contained in the fiscal compact treaty. There is also a need for a jobs and growth strategy and this was reflected in the conclusions relating to the January summit and in those brought forward following last week's European Council meeting. As the Deputy is aware, the multi-annual framework for the European Union is currently under discussion. The negotiations in this regard may, depending on progress, conclude by 2012. If this does not prove to be the case, they may well fall to be concluded during the Irish Presidency at the beginning of 2013. The approach being taken by the European Council in respect of the jobs and growth strategy will have implications for the European budget.

Deputy Ó Fearghaíl referred to what he terms the "initial design flaws" in respect of the euro. The fiscal compact treaty addresses issues of governance relating to the euro and makes provision for the establishment of a eurozone presidency and for the holding of regular eurozone meetings. The issues in this regard are being dealt with. There are rules which govern any common currency and these must be complied with by states which are members of that currency. Inevitably, issues arise as to what happens when there is a failure to comply with such rules. This is one of the matters which the treaty addresses. The ECB has already made a major commitment to the European economy by providing €430 billion prior to Christmas and €529 billion last week. That is almost €1 billion in total.

The treaty does not contain any proposals in respect of measures relating to corporation or any other form of tax. As everyone is aware, discussions are taking place on the CCCTB - in the aftermath of the publication of the Commission's paper - and on the financial transaction tax and these will continue.

I agree that the crisis in Syria is an extremely serious matter. Perhaps Deputy Ó Fearghaíl and I can engage in a longer discussion on this matter at the meeting of the Joint Committee on Foreign Affairs and Trade later today. However, I wish to state for the record that neither I nor the Government support the kind of approach advocated by US Senator John McCain because this would only serve to make the situation worse and would ensure the conflict in Syria degenerates into one of complete civil war. We are seeking to address the crisis in Syria and I will comment on the matter at greater length at the joint committee's meeting.

Paudie Coffey (Waterford, Fine Gael)
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I am conscious of the fact that time is running out. I propose, therefore, to take questions from Deputies Mac Lochlainn and Boyd Barrett next. I ask the Deputies to ensure their questions are brief and to the point.

Pádraig Mac Lochlainn (Donegal North East, Sinn Fein)
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The Taoiseach has stated that the referendum will be a one-off and that there will not be a rerun. In the event that the people reject the fiscal compact treaty, what is the Government's plan B in the context of the possibility of Ireland requiring a second bailout? From where will it obtain the resources to finance such a bailout?

In the context of the European sanctions against Iran, I understand that Finland - in the context of the non-proliferation treaty - will host a conference on ridding the Middle East of nuclear arms and weapons of mass destruction later in the year. What role can Ireland, which was the driving force behind the non-proliferation treaty, play in respect of bringing Israel, Iran and other states in the region together? In light of our past history in respect of this matter, does the Tánaiste regret closing down our embassy in Tehran?

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I do not understand the logic of what the Tánaiste is saying or of what the statements emanating from the European Council appear to imply. How is it possible to state that, on one hand, steps will be taken to tackle unemployment, promote growth, restore normal lending, etc., while seeking to pass a treaty which will ban borrowing, on the other? The Tánaiste can correct me if I am wrong but the fiscal compact treaty effectively bans states from borrowing. It might be reasonable to argue that we should not borrow for frivolous purposes or to finance ongoing expenditure. It would be quite normal to borrow for capital and infrastructure projects, job creation or initiatives to promote growth. If that is banned under the treaty to which we are signing up, how can we seriously hope to promote job creation? Is there not a supreme irony in us being told that such borrowing will be banned in perpetuity but the same people arguing that we cannot borrow for those purposes are stating we must borrow to pay off bankers' gambling debts?

Will the Tánaiste clarify comments from a Danish MEP at a meeting we had this week which concerned the treaty? He suggested that the penalty rules and strictures of the fiscal treaty would not apply to all states equally. He indicated that although Sweden, for example, has signed up to the treaty, there are agreements which mean the penalties and strictures for states stepping outside the criteria of the treaty will not apply to Sweden. In other words, there is one law for some states and another for other states in the implementation of this treaty.

Eamon Gilmore (Dún Laoghaire, Labour)
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Deputy Mac Lochlainn asked what is plan B if the treaty is rejected. Frankly, the onus is on the Deputy's party to tell us the answer if the treaty is rejected because he and his colleagues are advocating its rejection. The Government is putting forward the treaty on a positive basis and we believe the treaty will contribute to stabilising the euro, which is in everybody's interest. People understand why this is necessary with regard to the value of the euro in their pocket and stabilising the eurozone so we can get investment in jobs in Europe. As soon as we move past ratification of the treaty we can consider how to grow the European economy, which consists of 500 million people. There are significant positives and we must focus a bit more on them. There are many apocalyptic stories being told but Europe has a very significant future. There is potential for the European economy to grow with a market of 500 million people and all that is around it. That is where we should put our focus.

Access to the European Stability Mechanism, ESM, will be for those states that ratify the treaty. As I noted before, the Government's intention is to exit the programme we are in so that we can get back to the financial markets. The difficulty that an inability to access the ESM would have is in the entry back to the market. If there is a perception that we do not have access to the safety net of the ESM, there may be consequences.

On the issue of Finland and the non-proliferation treaty, I have worked closely with my Finnish colleague and will continue to do so on the matter.

With regard to Deputy Boyd Barrett's contribution, we are at the beginning of a referendum campaign and we should not start by making comments that are not true. This treaty does not ban borrowing any more than the last treaty banned the holding of future referenda, which was one of the daft claims made at the time. The treaty before us does not ban borrowing but provides for the implementation of the rules around the euro, which have been agreed already. We must realise that treaty or no treaty, we should address the level of borrowing that this country has. We cannot go on borrowing an additional €50 million every day to pay our way and we must tackle the issue.

Somebody told me there was a right-wing Danish MEP at a meeting with Deputy Boyd Barrett recently.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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He was definitely not right wing.

Eamon Gilmore (Dún Laoghaire, Labour)
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Hostility to the European Union makes for strange bedfellows indeed. What is provided for in the treaty will apply equally to all the states which ratify it but what is different is that unanimity is not required for the treaty to come into effect, unlike previous treaties. Ratification by 12 states is sufficient, with a timetable of 1 January next year.

Paudie Coffey (Waterford, Fine Gael)
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I must call the Tánaiste to make some closing remarks, but before that, Deputies Ross and Mick Wallace can ask two quick questions. The Tánaiste may respond in his closing remarks.

Shane Ross (Dublin South, Independent)
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I will be very brief. Has the Government conceded the point that it is almost inevitable there will be a second bailout? It is quite simple and Moody's and others have expressed that view in an authoritative fashion. There is a desperate cling to the need for ESM funds as a reason for the treaty so has the Government conceded the point that a second bailout is coming, one way or the other?

The second question concerns the Anglo Irish Bank promissory notes. Will the Tánaiste indicate if his Department, specifically, has been involved in these negotiations? Which Departments and officials have been involved, and have politicians been lobbying hard for this?

Mick Wallace (Wexford, Independent)
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Does the Tánaiste agree that statements made yesterday by the Israeli Prime Minister Benjamin Netanyahu in the US were a threat to world peace? Does he agree that under no circumstances should the European Union approve of any form of military strike against Iran? Would he consider taking up the issue with the Israeli ambassador as I thought Mr. Netanyahu went over the top yesterday?

Eamon Gilmore (Dún Laoghaire, Labour)
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The Government absolutely does not concede that, as Deputy Ross put it, there will almost inevitably be a second bailout. We do not accept that at all. The Government's strategy and objective is that we are in a programme and it will run for a period. Our intention is to exit that programme and return to the markets. All of the indications to date are that we will succeed in doing so. We are meeting the targets of the programme and, as the Deputy knows, the National Treasury Management Agency did an exchange of 2014 bonds for 2015 bonds quite successfully. We are confident we will exit the programme and get back to the markets. I do not accept the Deputy's comments about an inevitability - as the Deputy termed it - of a second bailout. I repeat that our strategy is to exit the programme and get back into the markets.

A number of Departments have been involved in the negotiations on the promissory notes, including my own, and the process of the negotiations is being overseen by the economic management council of the Government.

Deputy Wallace asked about the possibility of an Israeli military strike on Iran. When I met Prime Minister Netanyahu and the Israeli Foreign Minister, Mr. Lieberman, I communicated very directly Ireland's very strong opposition to any such military strike against Iran. I have said publicly that any such approach would be disastrous both for peace in the region and world peace.

The Acting Chairman has asked me to wind up the debate so I thank Members who contributed to the discussion. It is important that we locate what is happening in Europe, including the proposal for the fiscal treaty, as part of the strategy for economic recovery. We have had debates on where responsibility lies for the economic mess in which we find ourselves. What matters, however, is that we bring about economic recovery. There are a number of elements to this, including stabilising the euro which is what the treaty is about, and creating jobs and growth in Europe, which is why the Government has insisted successfully on the second arm of the agenda being put in place. In terms of what is happening in the banking system, the European economy generally and with the euro, the role of the ECB is important. In that regard, the advances it has made in recent months are welcome.

It is important that we do not constantly talk ourselves into a depression. We must look at where progress is being made because it is being made and the economy has returned to growth. The national household survey figures published today show the number of those in employment, in the final quarter of 2011, increased for the first time since 2007. I do not want to exaggerate this and say the low rate of growth achieved last year and the small increase in the number of people at work are the end of it. Of course, they are not. However, this shows we are making progress which we must continue. Part and parcel of this is ensuring certainty and the stability of the euro. That is why it is necessary for the treaty to be passed.