Wednesday, 21 March 2012
Private Members' Business. European Stability Mechanism: Motion
That Dáil Éireann:
— on 16 December 2010, the European Council agreed a two line amendment to Article 136 of the Treaty on the Functioning of the European Union allowing for the creation of a permanent emergency funding facility to be known as the European Stability Mechanism (ESM);
— the text of the amendment to Article 136 states clearly that the stability mechanism be "activated if indispensable to safeguard the stability of the euro area as a whole";
— on 11 July 2011, the European Council agreed the final text of the Treaty Establishing the European Stability Mechanism which, when ratified by the 17 signatory states, would create a permanent emergency funding vehicle for EU member states known as the ESM;
— Recital (2) of the ESM Treaty incorporates the wording of the new Article 136 of the Treaty on the Functioning of the European Union, the effect of which is to make the overriding legal and policy mandate of the ESM the safeguarding of the stability of the euro area as a whole;
— under the terms of the ESM Treaty, the ESM would come into operation from July 2012 and would have a total fund of €500 billion of which Ireland would contribute €11 billion;
— neither the Article 136 Amendment to the Treaty on the Functioning of the European Union nor the ESM Treaty have been ratified by the Irish State;
— the ratification of the Article 136 Amendment will take the form of the proposed European Communities Act (Amendment) Bill 2012, which is due to come before the Oireachtas in this session;
— the ratification of the ESM Treaty will take the form of the proposed ESM Bill 2012, which is due to come before the Oireachtas in this session;
— in January 2012 the European Council agreed to an amendment to the Treaty Establishing the European Stability Mechanism linking access to ESM funds to ratification of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, more commonly known as the "Austerity Treaty";
— making ratification of the "Austerity Treaty" a condition of eligibility for ESM funds runs contrary to the letter and spirit of the amendment to Article 136 of the Treaty on the Functioning of the European Union and the European Council summit statement of 21 July 2011 which said that the European Council were, "determined to continue to provide support to countries under programmes until they have regained market access, provided they successfully implement those programmes";
— the insertion of this controversial amendment into the ESM Treaty is intended to frighten public opinion into supporting the "Austerity Treaty" in the event of a referendum in any EU Member State;
— the Irish Government did not oppose nor seek to prevent in any way the insertion of this controversial amendment into the ESM Treaty; and
— while the Irish Government did not have a veto on the final text of the ESM Treaty, it did and continues to have a veto over the Article 136 Amendment to the Treaty on the Functioning of the European Union, and could have used this veto to secure the removal of the controversial amendment from the ESM Treaty;
states that the reason for the Irish Government's acquiescence to this controversial amendment was to ensure that, in the event of a referendum in Ireland on the "Austerity Treaty", the Government could use this issue to frighten people into supporting a treaty that, if assessed on its own merits, would not secure popular support; and calls on the Government to:
— confirm it will not ratify the Article 136 Amendment and the ESM Treaty until after the "Austerity Treaty" referendum, and will not bring forward the proposed European Communities Act (Amendment) Bill 2012 and the proposed ESM Bill 2012 until the people have had their say on the "Austerity Treaty";
— debate the "Austerity Treaty" on its own merits and to desist from using the controversial clause in the ESM Treaty as a way of securing support for the "Austerity Treaty"; and
— state publicly that in the event of a rejection of the "Austerity Treaty" by the people in a referendum, it will seek to remove the controversial clause from the ESM Treaty, and will, if necessary, use its veto on the Article 136 Amendment to the Treaty on the Functioning of the European Union to secure the removal of the controversial clause.
The Government has yet to set a date for the referendum on the austerity treaty and already the scaremongering has begun. It started before the text of the treaty was even finalised. Last November, the Minister for Finance, Deputy Michael Noonan, stated the referendum would be a vote on Ireland's continued membership of the euro. More recently, the Taoiseach suggested a "No" vote could jeopardise our membership of the European Union. Neither of these claims is true. Our membership of both the European Union and euro is secure, as the Government knows. The reason for the scaremongering is the Government is unable to find a single positive reason for people to support the austerity treaty. How could they support it? If ratified, the treaty will result in even greater levels of austerity imposed on low and middle income families. It will mean up to €6 billion of additional cuts and tax hikes in the years after 2015, resulting in further cuts to front-line health, education and community services. It will lead to more stealth taxes and unfair charges, such as the household charge and septic tank charge, on families already struggling to make ends meet. It will also mean handing over more power to EU institutions, in this case the European Commission and European Court of Justice, to dictate the details of future Governments' fiscal and budgetary policy.
The Government always knew the treaty would be a hard sell, so much so that it actively sought to avoid a referendum at all costs. This is not speculation or an accusation made by members of the Opposition. The German Minister of State with responsibility for European affairs, Mr. Michael Link, confirmed to The Irish Times in February this year that European Union negotiators sought to design the treaty in such a way as to avoid a referendum in Ireland. To quote Denis Staunton of The Irish Times directly: "When asked if the fiscal compact agreed in Brussels last month had been designed in such a way that it would not need a referendum in Ireland, Mr. Link replied: 'Exactly'."
Unfortunately, the rights of the people enshrined in the Constitution are not so easy to circumvent and the Government thankfully failed in its attempt to deny the electorate the right to decide on the austerity treaty. However, the Government and its EU counterparts had a trick up their sleeve. They must have asked themselves how they could sell a treaty that would make people's lives even harder, while undermining their ability to choose alternative policies in future elections if they become dissatisfied with the policies of the current Government. The answer they arrived at was to insert quietly a blackmail clause in both the austerity treaty and treaty establishing the European Stability Mechanism, ESM. This clause states that access to future emergency funding from the European Stability Mechanism will be conditional on ratification of the austerity treaty. It was accepted last December without a single objection by the Government, which could have rejected it as unacceptable. It could have argued that to insert this clause would interfere with the ability of an electorate to assess and decide on the austerity treaty on its own merits. Crucially, it could have used its veto to block this blackmail clause but chose not to do so.
The Government is telling the electorate that if we reject the austerity treaty in the forthcoming referendum, we will be denied access to emergency funding from the European Stability Mechanism in future. This is not true. The primary function of the ESM, as outlined in the EU treaties and European Stability Mechanism treaty, is to provide funding to member states where such funding is "indispensable to safeguard the financial stability of the euro area as a whole." Denying a member state such as Ireland emergency funding would not only undermine the stability of our domestic economy but would also undermine the stability of the eurozone as a whole. To deny funding in such circumstances would be in direct contravention of the EU treaties and the ESM treaty. It is also a risk that no European politician would be willing to take.
It is important to remind people that the blackmail clause is not even written into the articles of the treaty establishing the European Stability Mechanism but contained in the recitals at the start of the document. According to the European Court of Justice, a recital of this nature "may cast light on the interpretation to be given to a legal rule [but] it cannot in itself constitute such a rule". In plain English, this means the blackmail clause does not have any legal standing, particularly if it is in conflict with the primary mandate of the European Stability Mechanism as outlined in Article 136 of the EU treaties.
It is stating the obvious that if Ireland is unable to fund itself come 2014, it will be because the first troika austerity programme failed. The explicit purpose of the current bailout programme is to assist our return to the sovereign bond markets. The idea that, having failed the first time, the Government would then sign up to a second programme based on the same conditions as the first, namely, crippling austerity and unlimited bank bailouts, is sheer madness.
It is also worth reminding people that the European Stability Mechanism is not the only source of emergency funding available to states frozen out of the bond markets. A number of economists have convincingly argued that the International Monetary Fund, through a number of different programmes, could provide emergency funding to the State if the ESM route was not open. This week, Tom McDonald of TASC and Michael Taft of UNITE published a short paper on the progressive economy website in which they discuss the details of this option. While it is not Sinn Féin's preferred option, the availability of the IMF option is an important fact about which people should be reminded. The ESM never was and never will be the only option.
Having said all of this, the matter of most immediate concern is the blackmail clause and the fact the Government has the ability to have this insidious clause removed from the ESM treaty if it so wishes. The Government has yet to ratify either the treaty establishing the European Stability Mechanism or, crucially, the amendment to the EU treaties that makes the ESM treaty legally possible. In December 2010, the European Council agreed to an amendment to Article 136 of the European treaties, allowing the establishment of the European Stability Mechanism. This amendment required the unanimous support of all 27 members of the European Council and, crucially, it must be ratified by all 27 member states. The Government intends to ratify the Article 136 amendment by way of the European Communities Act 1972 (amendment) Bill. Until this amendment is ratified, the treaty establishing the European Stability Mechanism and with it the ESM blackmail clause cannot come into effect.
Let us be clear on this matter. By refusing to ratify the Article 136 amendment, the Government could block the ESM treaty until such time as the blackmail clause is removed. What will the Government do? It has a number of options. It could seek to press ahead with the ratification of both the Article 136 amendment via the European Communities Bill and subsequently ratify the European Stability Mechanism treaty with the blackmail clause intact via the treaty establishing the European Stability Mechanism Bill. In so doing, it would use the threat of being denied ESM funds to influence the outcome of the referendum.
The second option for the Government is not to proceed with the ratification of the Article 136 amendment and the ESM treaty until after the referendum. This would allow the electorate to have an open and honest debate on the austerity treaty, free from scaremongering or blackmail. The Government could allow a frank and honest debate on the contents of the treaty and its implications for Ireland and the EU. Having allowed the people to make up their minds freely and democratically on the issue, it could then respect the will of the people.
If the austerity treaty is rejected in a referendum, the Government could then call for a further amendment to the ESM treaty to remove the blackmail clause. Its ability to secure this amendment would not only be strengthened by the referendum mandate but also by its veto on the Article 136 amendment to the European treaties. This would mean that irrespective of how people voted in the referendum, the issue of accessing emergency funding in the future and the conditions on which that funding is accessed could be debated after the referendum as a separate and free-standing issue from the austerity treaty.
It is the Government which will decide on whether the rejection of the austerity treaty will block access to ESM funding in the future, not the electorate. The Government has the power to remove this blackmail clause. The motion before the House calls on the Government to defer the ratification of the ESM treaty and the Article 136 amendment until after the austerity treaty referendum; to allow the people to have a free and fair debate on the austerity treaty free from scaremongering or blackmail; and, in the event of the people rejecting the austerity treaty, calls on the Government to seek the removal of the blackmail clause from the ESM treaty. Anything short of this would display contempt for the electorate and for the Constitution. I commend this motion to the House.
Sinn Féin brings forward this Private Members' motion at a time when we are certain we will have a referendum, although we do not know the date. We are sure that the sole argument advanced by the Government to urge the people to support the austerity treaty is that it is a prerequisite to accessing the so-called EU bailout fund. My colleague has outlined both the context in which the motion is set and its substance.
While the background to the blackmail clause may appear complex, the central issue is very simple. The blackmail clause, which the Government allowed to be inserted into both the austerity treaty and the ESM treaty, has not yet come into effect and can only come into effect if the Government allows that to happen. My colleague has outlined the way in which the Government could insist on the removal of the blackmail clause from the ESM treaty. This, and only this, would allow for a free and fair debate on the austerity treaty, followed by a full consideration of the merits and problems of the ESM. In other words, each issue would be dealt with separately and on its own terms.
I would like to deal with a number of contradictions that are contained within the blackmail clause itself. The legal basis for the European Stability Mechanism is to be found in Article 136 of the Treaty on the Functioning of the European Union. In December 2010, the European Council amended this article, adding the words: "The Member States whose currency is the euro may establish a stability mechanism to be activated if indispensable to safeguard the stability of the euro area as a whole." This means that the sole function of the ESM is to safeguard the stability of the euro.
What happens if Ireland rejects the austerity treaty and, come mid-2013 or the start of 2014, is in need of emergency funding? Will the blackmail clause be invoked by the European Council to punish Ireland for the perceived indiscipline of our electorate? I believe the answer to that is "absolutely not". I say that because not only would there be a compelling economic rationale for the European Council to provide funding, there would also be a binding legal requirement to do so. Additional conditions on emergency funding contained in the ESM treaty would take second place to the primary legal and policy mandate as detailed in the EU treaty.
The blackmail clause is also in conflict with a commitment given by the European Council in its July 2011 summit. The Council stated that it was "determined to continue to provide support to countries under programmes until they have regained market access, provided they successfully implement those programmes".
Sinn Féin is firmly of the view that the blackmail clause is an empty threat. It was deliberately designed with the sole purpose of bullying people into supporting a treaty that they would otherwise reject. When the European Council decided to put the blackmail clause into the ESM treaty, it was trying to ensure that unruly parliamentarians in member states or, worse still, the Irish electorate in a referendum, would feel that they had no choice but to support the austerity treaty. That the Irish Government willingly signed up to this act of blackmail is nothing short of shameful. Parties that pride themselves in respect for democracy and the Constitution have actively colluded to undermine the integrity of the referendum process itself.
As the motion clearly states, the Government still has the power to remove the blackmail clause. Its veto over the Article 136 amendment and its ratification through the European Communities Act (amendment) Bill gives it the ability to say to the European Council that this blackmail clause must be removed. I urge the Government and its backbenchers to take this course of action. Let the people have a full debate. Let them consider the austerity treaty on its own merits, free from blackmail. Let us have an open and honest debate on the merits of the treaty and then, depending on the outcome, let the Government deal with the ratification of the ESM treaty as a separate issue. Our motion asks for nothing more than a full, free and informed debate without coercion or threats. We in Sinn Féin believe the people deserve no less.
At a time when Ireland has lost its economic sovereignty, when the majority of our citizens are forced to endure crippling austerity measures, and when billions upon billions are being handed over to pay for the casino capitalism of bankers, bondholders and speculators, we once again find ourselves facing a decision that will have far-reaching implications for the future prosperity of the nation. It is unfortunate that before the campaign has even started, we are already getting threats similar to those we received the time of the Lisbon referendum.
Clearly the Government did not want a referendum and this is reflected in its failure to set a date so that our citizens can make a decision on the fiscal treaty. Its reluctance to allow the Irish people to have their say has not prevented Ministers from attempting to create fear and confusion by claiming that if we do not ratify what is being forced upon us, we will not be able to access bailout funds in the future. The Government is failing to tell people that they by vetoing the Article 136 amendment on which the ESM treaty is based, it can stop Ireland having to institutionalise austerity into law and into the Constitution.
If we accede to the threats and demands of Sarkozy and ratify this treaty, it will result in the final death knell of our economic and fiscal sovereignty. It means Ireland will be restricted in running a structural deficit of no more than 0.5% of GDP which will have disastrous consequences in shackling us to the larger member states and preventing us from implementing an expansionary fiscal policy. If Ireland is to meet the targets set by the Commission by 2015, we will have to endure additional cuts of €5.7 billion. Having a longer timeframe to meet that target would simply mean even greater austerity which would have devastating consequences for the economy and the lives of countless citizens.
It also ironic that we are being asked to sign up to a treaty that will benefit reckless casino capitalists, bondholders, bankers and speculators who are nearly 100% responsible for the crisis in which we find ourselves. It means that from 2014 we will be forced to make an annual payment of €4 billion in principal debt repayments on top of interest payments that will amount to a total of €8 billion.
Somewhat perversely, the people are being asked to sign a treaty that will do nothing to curb the future excesses of the bondholders and speculators who caused the crisis. Let us be clear that, despite the misinformation being peddled by the Government, rejecting the treaty will not force Ireland out of the euro or the European Union. Put simply, the decision we face is whether we should sign up to even greater austerity or continue to suffer under the current reign of the troika. The treaty will impose even greater hardship on citizens through the imposition of even greater austerity measures and cutbacks. In particular, it will shackle us to the most power member states of the European Union such as Germany and France, the self-interests of which will always take precedence over those of small countries such as Ireland.
Let us be clear: the treaty is not about growth and economic stability in Europe, particularly not in Ireland. Rather, it is about making sure a larger chunk of public money will be available to pay the private debts of rogue bankers in Ireland who borrowed recklessly and were lent money recklessly by EU banks. We can veto the Article 136 amendment on which the treaty is based. The Government has the trump card and I urge it to use it.
That the Government is engaged in making threats to secure the passing of the referendum on the treaty is nothing new. We have become well used to being cajoled or bribed into supporting successive moves in the ceding of Irish sovereignty to the European Union. People will recall the wonderful promises made in the course of the first Lisbon treaty referendum campaign. Its passing, we were assured, would usher in a new era of plenty. We were told to "Vote Yes for Jobs". All that now sounds rather hollow as, under the terms of the bailout programme, the European Union has become anything but a fairy godmother. What we also learned in the Lisbon treaty referendum campaign was that the elite in this state and Brussels literally did not take "No" for an answer. The democratic decision of the people was not accepted and we had a second Lisbon treaty referendum but with fewer promises and more threats. In the current environment there are few promises, as can clearly be seen by comparing what the Government is doing with what it promised to do during the general election campaign and in the programme for Government. The threat is no longer implied but starkly outlined: the choice is to vote "Yes" or face even worse times ahead.
The fact that the Government has signed up to the treaty is a further illustration of the extent to which it has surrendered to the politics and economics of austerity. It also strives to give the impression that there is a consensus in favour of the treaty and that there is no alternative to it. In doing so it is ignoring a wide range of opinion across Irish society that opposes the politics and economics of austerity and instead supports a positive programme of utilising our own initiative and resources to stimulate growth.
It is somewhat ironic that on this issue the Labour Party is being outflanked on the left by respected members of the business community. I listened yesterday morning to what Mr. John Teeling, former owner of Cooley Distillery, had to say and do not believe he was a participant in the Occupy Dame Street campaign. He was making the same perfectly logical point my party, the trade union movement and a raft of economists have been making for the past few years - that austerity does not work. This has been proved historically and is being proved every passing day in the State, as the negative multiplier effect of taking money out of the economy leads to further business closures, higher unemployment and further social decline. The alternative is to simulate the economy through investment which needs to be led by the State, rather than, as it is proposing to do, by shedding public companies and withdrawing more capital.
Mr. Teeling has also proposed that the State defer debt payments for the next six years and use the money saved and the window of opportunity that would open to get the economy back on its feet. However, such a proposal would be greeted with horror by the European Central Bank and the Government will do nothing to offend it. We seem content to genuflect every time it opens its mouth. What we are being offered instead is an endless vista of austerity, with even worse to come if we do not cede further powers to the European Union by passing the treaty.
While I do not expect the Members opposite to agree with Sinn Féin on the treaty, I urge them to support the call made in the motion not to ratify the amended Article 136 or the ESM treaty until after we have had a debate on the referendum free of these issues.
Tá sé rí-thábhachtach go ndéanfaimís díospóireacht ar an rún seo. Is rún an-thábhachtach é agus tá súil agam go bhfuil na páirtithe os mo chomhair, agus an t-Aire, sásta éisteacht cheart a thabhairt don díospóireacht seo, mar todhchaí na tíre atá i gceist againn. Tá súil agam go mbeidh todhchaí mhaith againn ach má leanann an Rialtas sa treo ina bhfuil sé ag dul beidh sé i bhfad níos deacra orainn agus ar na glúine atá ag teacht. Táim ag impí ar an Rialtas athrú poirt a dhéanamh.
Recently the Minister for Finance, Deputy Michael Noonan, said the economy "will take off like a rocket;" the Minister for Social Protection, Deputy Joan Burton said we were "marching towards recovery," while the Minister of State, Deputy Shane McEntee, said "there are plenty of jobs available". In their concerted efforts to deny reality these Ministers and many others because they are not the only culprits who are living in a dream world would have the public believe it is a lifestyle choice to emigrate. They should speak to the families of the 60,000 or 70,000 people who emigrated last year. They have also said it is a "lifestyle choice" to be on the dole, but they have not talked to the 450,000 on the dole. We even had one Minister say people with Down's syndrome were "wayward". These are not the only insulting comments made by Ministers. I could cite a number of other examples in the past year.
Are the Government benches populated by deluded fools or devious operators? That is the question I will ask at the end of my contribution.
One thing is certain, however, that is, the Government is deluded if it thinks it will get away with blackmailing the people into voting for decades of counter-productive, austerity-driven misery. Tá breall ar Theachtaí an Rialtais. Déanfaidh an pobal a bheart nuair a thiocfaidh an vóta. Roimhe sin, ba chóir don Rialtas an reachtaíocht a chur a leataobh go dtí go ndéanfar an vóta sin agus deis a thabhairt dúinne eacnamaíocht cheart a thógaint amach anseo.
The Government is badly in need of a reality check. The latest ESRI quarterly commentary makes nonsense of the Government's projections and shows that the recession is set to continue for the foreseeable future. Consumer spending will continue to fall through next year, as will the level of investment.
The ESRI's employment projections are going in the opposite direction from those of the Minister and the Government. The ESRI projects that employment will fall, not grow, in 2012 and 2013. Average real wages for those lucky enough to hang on to their jobs are also set to fall. There are no rocket take-offs on the horizon for the Minister for Finance, not if he continues to choose austerity. CSO figures in the past 15 consecutive quarters have shown falling employment. So much for marching towards recovery. This is not a march, it is a death march led by the Minister for Jobs, Enterprise and Innovation if he continues to employ the austerity treaty as intended.
If there are plenty of jobs available, as members of this Government claim, was the European Commission's vacancy monitor lying to the European public when it demonstrated that there is just one job available here for every 50 jobseekers? Does the Government think that one job between 50 people is plenty because the others will emigrate? Tá 50 duine dífhostaithe do gach uile fholúntas sa Stát seo; an meán san Aontas Eorpach go hiomlán ná 9 duine do gach folúntas. Tá Éire breis is cúig uaire níos measa as ná an tAontas Eorpach. Má fhéachaimid ar ár bpáirtnéirí, siúd atá ag sciobadh an t-airgead uainn agus atá iarraidh fhlaitheas eacnamaíoch na tíre seo a sciobadh chomh maith, an Ghearmáin mar shampla, níl ach triúr duine dífhostaithe do gach uile fholúntas. Cén sórt comhpháirtíochta é sin?
If things were negotiated in a true spirit of partnership, access to the ESM would not be conditional on our signing up to legally binding austerity forever and a day. Austerity is precisely what is making the situation worse, it is stamping out demand in the local economy and every economic indicator proves austerity is not working.
"TINA" - there is no alternative - was once the mantra of Margaret Thatcher but it has been now adopted by the Labour Party and Fine Gael. There is no alternative if the Government legislates away our right to choose the alternatives or if it does not look at them. That is precisely what the Government has done since it took office a year ago. There are alternatives; the Government must grow them and stand up to Germany.
Grow them and stand up for Ireland. Negotiation should be done from a position of strength and we will be in a position of strength only when we look at the alternatives for the country instead of cutting the heart and soul from communities and local economies.
The economic approach of austerity or any detailed, not to mention highly suspect, fiscal formula has no place being articulated in our Constitution. The Irish electorate should be free to democratically select and mandate the economic approach it decides to choose at any general election in the future.
It should not be conditional on us signing-up to legally binding austerity for ever and a day. Austerity is precisely what makes our situation worse. Austerity is stamping out demand in the local economy. Pretty much every economic indicator proves that austerity is not working. Specifically, what the Government is doing in the forthcoming referendum is putting such an austerity measure into the Constitution. If the Labour Party and Fine Gael Members of this House are "devious operators" they are well aware of all the facts I have outlined and are consciously choosing to tie their own hands and undermine the ability of the public to select an alternative in future elections.
If they are deluded fools we cannot afford for them to remain so. I would advise all Members of the Government parties to check out progressive economist Michael Taft's blog "Notes on the Front" and they might learn something before it is too late. The Government must do the right thing and not pre-empt the people. It should delay the European Stability Mechanism Bill and the European Communities Act (Amendment) Bill until after the referendum.
Many thought that real change was in prospect when the Fine Gael-Labour Party coalition was formed. Many are now sadly disillusioned.
We pointed out before the general election that Fianna Fáil, Fine Gael and the Labour Party already constituted a coalition for cuts because they agreed on the essentials of their economic policy. Crucially as far as this debate is concerned, they also agreed on the essentials of policy with regard to the EU. There is not a hair's breadth between them.
This should surprise no-one. These were the parties that united in support of the first referendum on the Nice treaty. When the people rejected that treaty, the three parties united again to brow-beat the people into accepting the second referendum in 2002. There was no opposition from Fine Gael and the Labour Party to the Fianna Fáil-led Government's blatant defiance of the people's will in the first referendum.
The same scenario was played out on the Lisbon treaty in 2009. The people rejected it but the so-called main Opposition parties marched obediently behind the "Yes" banner, more concerned as always to pander to the larger and more powerful member states of the EU than to implement the democratic mandate of the Irish electorate.
Fine Gael, Fianna Fáil and the Labour Party are the three brass monkeys of Irish politics, see no evil, hear no evil - how could they because they are never here - and speak no evil as far as the EU is concerned. They cannot be trusted to represent the national interest at EU level because they have no clear conception of what is that national interest. They cannot stand up for Ireland because they are in a permanently crouched position from decades of bowing to the Brussels bureaucrats.
The people gave Fine Gael and the Labour Party an unprecedented electoral mandate. It was a mandate to undo the disastrous legacy of the outgoing regime, including the outrageous impositions of the troika, the unlimited bank guarantee and the totally unjustified pledges to unguaranteed Anglo Irish Bank bondholders. What has the coalition done with that mandate? Nothing. Absolutely nothing. The ballot papers may as well have remained in the boxes.
The straitjacket imposed by Fianna Fáil is still in place. Far from removing or even loosening the Fianna Fáil straitjacket, this Government wants to make it permanent by signing up to an austerity treaty that will tie this and future Governments to a narrow, rigid economic doctrine, condemning our people to more long years of economic stagnation, unemployment, poverty and emigration. It comes as no surprise that this is the position espoused by Fine Gael, and not for the first time, but the greatest vexation and annoyance for so many good people who used their votes wisely, as they thought, is that the Labour Party is complicit in all of this.
The Sinn Féin motion before the Dáil tonight exposes the pathetic weakness of this Fine Gael-Labour Party Government on the European stage. Instead of using the mandate of the people to demand our rights, it has crumbled. It has willingly accepted the blackmail clause in the European stability mechanism treaty to claim that an Irish rejection of the austerity treaty would see this State barred from emergency funding from the ESM, a claim that is clearly false.
This is yet another attempted swindle of the Irish people by the political establishment in both Dublin and Brussels. As our motion states, the Government agreed to the blackmail amendment to ensure that in the event of a referendum here, it could use this issue to frighten people into supporting an austerity treaty for fear of losing access to emergency funding. This was a disgraceful course for the Government to take, and it is under a moral obligation to reverse it. It is yet another reason for the people to vote "No" in the forthcoming referendum. We strongly urge them to do so and we urge all Deputies, irrespective of their politics, to vote with their conscience and in line with the mandate given to them and support the Sinn Féin motion.
I move amendment No. 1:
To delete all words after "Dáil Éireann" and substitute the following:
— the European Stability Mechanism, ESM, treaty is an important part of the significant number of initiatives which have been taken at EU level to ensure the economic and financial stability of the euro area and the EU as a whole which include:
— the establishment of a temporary support facility, the European Financial Stability Facility, EFSF, and also the extension of the use of the EU's European Financial Stabilisation Mechanism, EFSM, facility;
— the agreement to enhance the effectiveness of the EFSF through increased lending capacity and additional flexibilities;
— the agreement to reduce the interest rates and lengthen the maturities for programme countries;
— the agreement to establish a permanent support facility, the ESM, by July 2013 to replace the temporary EFSF and EFSM arrangements;
— the agreement to include the new EFSF flexibilities in the ESM;
— the agreement to accelerate the entry into force of the ESM treaty to July 2012, subject to ratification by member states representing 90% of the capital commitments;
— the agreement at EU level to provide significant additional resources to the IMF;
— the agreement to reassess in March this year the adequacy of the overall ceiling of the EFSF/ESM of €500 billion;
— the agreement to provide substantial additional support to Greece and the enhancement of its debt sustainability;
— the enhancement of economic governance with the strengthening of the Stability and Growth Pact through, for example, the six pack of legislative measures and also the agreement on the stability treaty; and
— the ECB's significant initiative to provide liquidity of up to €1 trillion in support to the EU banking system;
— the Government has participated actively in the development of these initiatives, as appropriate, which are in Ireland's and in Europe's interests; and
— the Government will decide on the appropriate timing for legislation to ratify the ESM treaty in due course, with regard to the agreed timetable at European level for ratification."
I will hand over to the Minister for Finance.
I thank the Sinn Féin Party for moving this motion this evening. It gives me the opportunity to put some material in the public domain. First, there is a matter I wish to bring to the attention of the House as the Government has always committed itself to informing the Dáil about any development concerning the payment of the promissory note at the end of this month.
In recent months we have been involved in technical discussions on reducing the burden of debt associated with the recapitalisation of the banks. In particular, our focus has been on the promissory note arrangement that was put in place to fund the Irish Bank Resolution Corporation, IBRC, formerly known as Anglo Irish Bank and Irish Nationwide Building Society. This is an arrangement that requires the State to make cash payments of €3.06 billion each year to IBRC. There have been some developments on this issue during the day. The discussion with the European authorities on the general issue continues but we are also negotiating with the EU authorities and principally with the European Central Bank, ECB, on the basis that the €3 billion cash instalment due from the Minister for Finance to IBRC on 31 March 2012 under the terms of the IBRC promissory note could be settled by the delivery of a long-term Irish Government bond. The details of the arrangement have still to be worked out, but are being worked out.
I will now turn to the core of the motion before the House, the Government's extremely constructive engagement with the EU on whether we wish to put in place appropriate support mechanisms at European level. We all know these are needed, so I will recap on how Europe has reached its current position.
Europe, and indeed the broader global economy, has been in the throes of an economic and financial crisis for a number of years now. The approach of providing support mechanisms started with the Greek loan facility in early 2010. That was a specific measure for Greece. It was followed quickly by action to put in place a more general support facility, the EFSF, which could be used for any euro area member state. This was a temporary mechanism which will expire in 2013. It turned out that Ireland was the next country to require assistance, in late 2010.
Those lads walking from Donegal will have to get the bus home.
At the same time, there was a clear understanding that these types of support measures for countries in difficulty needed to be complemented by measures to promote more sustainable public finances. The six-pack is the new set of rules on enhanced EU economic governance which entered into force on 13 December 2011. The six-pack has four main aims: to strengthen the rules of the Stability and Growth Pact, SGP, which was designed to limit budget deficits and government debts, by introducing a much greater and stronger degree of surveillance at an early stage and to make it easier to initiate the excessive deficit procedure - the new rules will also give a greater importance to debt, and not only deficit, reduction and sustainable growth; to introduce new controls on macro-economic imbalances across the EU, such as housing bubbles and growing divergences in competitiveness between member states; to set standards to ensure the correct and independent compilation of statistics as this data is crucial to sound budgetary policy-making and monitoring of budgets; to enhance the transparency of the decision-making processes and the accountability of decision-makers.
It will be clear, therefore, that the direction in Europe was always towards providing support to deal with countries in difficulty but also to put in place measures to ensure this would not happen again. It is important to recognise that we are in uncharted waters here. That is why the approach is being adapted as it develops. I have been pointing out for some time that when the euro was put in place, the architecture to support it was not adequate. I stated clearly some of the elements that were required; lower interest rates for the programme countries and a substantial firewall were among those I mentioned. These, and other proposals I have made, have gained traction in Europe and are now part of mainstream thinking. This resulted in some amendment to the interest rates for the programmes in March 2011. This meant a reduction of almost €10 billion in the onerous burden that was placed on the Irish taxpayer.
At the same time, the discussions on the ESM continued and in early July 2011, Finance Ministers signed the treaty as it then stood. However, in parallel with this discussion, it became increasingly clear that the existing mechanisms needed to be greatly enhanced. This culminated in the decisions of the euro area Heads of State and Government on 21 July 2011 which agreed significant changes for the Greek loan facility and, more importantly for the broader European agenda, to the EFSF. Most notable among these was a reduction in the interest rates and the other costs associated with the EFSF and the change in its structure, while the maturities were lengthened. All of these measures aimed to enhance debt sustainability in programme countries. In addition, the EFSF was also granted additional flexibilities allowing it to act on the basis of a precautionary programme, finance recapitalisation of financial institutions through loans to governments and intervene in primary and secondary sovereign bond markets on the basis of an ECB analysis.
It was agreed at the same time that these flexibilities would also be included in the ESM. In order to do that, there was a need to reconsider the draft ESM treaty. These additional flexibilities and the establishment of a permanent support mechanism are clearly in our interest, and the reopening of the ESM discussions clearly brought potential benefits for us.
While that was taking place, discussions continued on the second Greek programme involving substantial additional funding and also private sector involvement, which is strictly limited to Greece. We discussed those measures recently when we considered the legislation on the second amendment to the Greek loan facility.
Of course, thinking was developing as to how further to underpin the EU's support programmes. The outcome was that, as part of the agreement to these broader measures, discussion started on a broader fiscal compact with the aim of ensuring that the level of fiscal irresponsibility, which brought about the current crisis, could not be repeated. This represents a development of the approach underlying the six pack, in the same way that the enhancement to the EFSF and the ESM represented a significant and important development in the approach to support mechanisms.
The measures in the fiscal arena have been complemented by the actions of the ECB. The low interest rates currently in place will help to offset the economic slowdown, which is affecting not just Europe but also the world economy. In addition, the ECB's longer term re-financing operation or LTRO, has provided some €1 trillion in liquidity to the European banking system.
Looking now to our own position, we are in receipt of substantial support from the EU mechanisms under our EU-IMF programme of financial support. This provides funding at rates well below those which would be available if we had to fund ourselves in the financial markets. In addition, the ECB continues to provide substantial liquidity support to the Irish banking system. It should therefore be clear that European solidarity is in our interests and to our benefit.
Our programme is working and we have met all our targets to date. Over 90 individual policy measures have been taken and put into effect. We have met the quantitative fiscal targets and we have implemented financial sector restructuring. We achieved banking recapitalisation at a significantly lower cost than initially envisaged. We imposed burden sharing on junior debt holders. We are implementing structural reforms with a view to enhancing the growth potential of the economy. We are introducing fiscal reforms to improve the management and control of our public finances.
The success of our programme implementation has been recognised by the financial markets. Our ten-year bond yields have remained below 7% for a number of weeks now. In addition, the NTMA has successfully re-engaged with the markets through the recent bond swap. These are all positive indications. They reflect our resolve to emerge successfully from our programme at the end of 2013 and to resume financing ourselves in the financial markets.
It is in Ireland's and in Europe's interest that there should be a strong firewall or safety net available to all euro area member states. I have argued for this consistently. The ESM provides this firewall. It provides reassurance to the financial markets and to all of us, thereby underpinning the confidence that is essential to healthy economic activity. It will also help to protect euro area member states which are in economic difficulty from market speculation.
Turning to the content of the ESM treaty, there is no basis for the assertions made in the Private Members' motion in relation to the inclusion of the cross reference to each other in the ESM and stability treaties. The linkage between the ESM and the ratification of the stability treaty was accepted in the context of the acceleration into force of the ESM by July 2012. It was of particular importance to a number of countries. It is entirely logical and reasonable that a country receiving the support of its partners under the ESM should be prepared to run sensible budgetary policies as required under the new treaty. That is the position and the attempt to put any other gloss on it is both inaccurate and misleading.
I have clarified that the linkage of both the ESM treaty and the stability treaty refers to new applications for assistance under the ESM and will not affect the transfer to the ESM of undisbursed amounts under the European Financial Stability Facility - that is, the EFSF - for Ireland and other programme countries. The funding approved under the existing programme of financial support for Ireland is not therefore conditional on Ireland ratifying the fiscal compact but, as is currently the case, on Ireland successfully implementing its programme.
The ESM treaty will have to be ratified by the 17 euro area member states; it will enter into force and the ESM will become operational as soon as possible. The target date is July 2012, a year earlier than originally planned. As a permanent mechanism, the ESM will take over the tasks currently fulfilled by the European Financial Stability Facility and the European Financial Stabilisation Mechanism. The ESM's lending capacity is currently set at €500 billion and this will be subject to reassessment later this month. This again reflects the continuing development of EU policy to which I referred earlier.
Sinn Féin tabled a motion to try to cast the Government's actions in a bad light. The Government has consistently acted to support the financial stability both of Ireland and the euro area. We have contributed constructively to efforts at European level to ensure the economic stability of the euro area, the financial stability of the European Union, and the safeguarding of the financial stability of the euro area as a whole. While the underlying economic and fiscal situations differ across Europe, it is imperative that countries restore their respective economies to health and their public finances to a sustainable position.
As our amendment to the motion makes clear, the decision on the timing of legislation for the ESM treaty, and also for the Article 136 amendment, has not yet been taken. However, it is clear that we will bring forward this legislation at the appropriate time. This will have regard to the target date for entry into force of the ESM treaty on 1 July.
The motion before the House seeks to sow confusion and doubt where none should exist. The Government's amendment places the ESM in its proper positive context of a series of developing EU measures to address the current crisis and to seek to avoid a future repetition of that crisis. The Government has played a constructive part in these discussions.
I commend the Government's amendment to the House.
I welcome the comments by the Minister for Finance in which he informed the House that the sum of over €3 billion that was due to be paid back next week will now be converted into a long-term bond. With that news, it is almost distressing to see half the membership of the Sinn Féin Party down tools and walk out of the Chamber. They do not share the satisfaction the rest of us have.
Once again, this is a Sinn Féin motion. In their contributions, Sinn Féin TDs, including Deputy Ó Snodaigh, used terms such as "lies", "fools", "blackmail" and "dishonesty", in the face of yet another significant piece of work done on behalf of this State by the Minister, Deputy Noonan. It smacks of the hypocrisy that all of us who are democrats know is absolutely appropriate to how Sinn Féin has conducted its business - in a self-serving manner since their foundation.
That is what the rest of us can deliver on. In respect of the motion, the key message we will have over the next couple of months is truth, which is what people will get from this side of the House. Even before a date has been set for the referendum, we are already seeing more misinformation coming from Sinn Féin. When all the arguments and facts have been fully aired and debated, we believe the people will view ratification of the stability treaty as another step in the rebuilding of confidence in Ireland's economy and in our international reputation. That is why the Government is going to make an unprecedented effort to give the people the facts and the information they need to make an informed decision about this treaty.
At the heart of the treaty is a new compact for countries using the euro that is designed to restore stability, confidence and growth along with a commitment to support each other through times of crisis and market speculation. Member countries will agree to reinforce the rules and to cut out and prevent excessive Government borrowing. This is like a home insurance policy that protects families against risk but also requires that families minimise those risks by putting in place smoke alarms and proper locks. The stability treaty offers protection to countries that follow these rules.
A "Yes" vote offers the rules-based economic stability, certainty and investment that our recovery requires. It will keep us at the heart of the euro and the eurozone. A "No" vote is a step back into the unknown and into isolation and the financial and economic instability that brought the country to the edge of collapse under the previous Government. The Government will not allow that to continue. I congratulate the Minister for Finance on the excellent work he does on our behalf.
I commend the Government amendment to the House. The Minister for Finance, Deputy Noonan, has set out the logic and urgency of ensuring the Oireachtas plays its part in putting in place a viable stability mechanism to succeed the European Financial Stability Fund, EFSF, in order that EU member states have a clear and tangible insurance mechanism to restore stability to the markets and order to the eurozone.
I draw the attention of the House to a statement by the leader of Sinn Féin in the House on 29 February last when he said the European Council must ensure the European Central Bank, ECB, which has a responsibility in this, takes all necessary action to stabilise sovereign bond interest rates and ensure market access for all member states. I could not agree more. What Deputy Adams was advocating is precisely what the Government is doing. Although he is sadly alone in the Sinn Féin Party, I am glad that he, at least, understands the need for the Government, along with other member states and the ECB, to take all necessary action to stabilise the eurozone. That is precisely what we are doing. It is incredible, however, that three weeks later Sinn Féin puts this motion before the House, advocating that we do the very opposite.
It is important to set out what the European Stability Mechanism is. The ESM is the new eurozone rescue fund of €500 billion that has been put in place to protect countries from market speculation. The agreement to establish this mechanism, combined with the other measures at EU level, including the agreement of the six pack in particular, and the recent long-term refinancing operation, LTRO, undertaken by the ECB, has already brought greater stability to the eurozone.
Sinn Féin Members are speaking out of both sides of their mouths in this regard. On the one hand, their leader says he wants to stabilise sovereign bond markets. Either they have changed their minds or they are entirely inconsistent, because on the other hand they say they want to prevent the cornerstone of this stabilisation process from coming into force. Those are entirely inconsistent and contradictory positions. Perhaps, during the course of this debate, Sinn Féin Members might like to clarify what their leader had in mind. If it is not the stability mechanism that is proposed by the European Council and by the Government, what exactly does Sinn Féin propose to stabilise the markets and ensure access to the markets for Ireland and other countries currently in financial programmes?
The actions taken within the eurozone since last summer to minimise the crisis are beginning to work. Across the House, Members may not like to hear that, but it is a fact. The various stages that are clearly set out in the Government amendment and which have been adopted by the European Union are working. Yesterday, for example, we saw Spain sell €5 billion worth of six-month bills at the lowest interest rate achievable in two years. Demand was boosted by ECB lending which happened directly as a result of Europe's Governments implementing the structures and safeguards to protect the currency which culminate in the European fiscal compact. Across the European Union, bond yields are falling. Irish yields are, in fact, the best example of that. They have fallen to the lowest rate in over a year. This is envied by other member states. All yields across the eurozone are falling. The situation is stabilising because European Governments, including the Irish Government, have taken decisive action and joined together in a common purpose to try to resolve the eurozone crisis. The European Stability Mechanism will offer Ireland protection from market movements, the very movements against which Deputy Adams says he wishes to see the ECB and European Governments take action.
Theoretical access to the ESM will ease our return to the markets. That is a vital insurance policy and safety net, not just for Ireland but for all members of the eurozone, including those who are not in financial assistance programmes. Our exit from our programme is dependent on the existence of the ESM as a safety net. That cannot be disputed by the Opposition.
Not having access to external assistance would put the country into extreme austerity and would have severe economic and social consequences for all citizens. So, it is apt that Sinn Féin refers to the fiscal treaty as an austerity treaty because were we not to ratify it, the austerity the country would face would be quite grave and serious. It is important that Sinn Féin be honest about it. I hope Sinn Féin Deputies will be so, in the interests of transparency and of having a full and frank debate on the issue.
The introduction of the European Stability Mechanism will safeguard stability in the eurozone while assisting us in calming the crisis. The fact that implementation has been brought forward by a year to July, along with the agreement for the fiscal treaty, has begun to have that effect. That is quite clear, as I have outlined.
It is inconceivable that Sinn Féin could think ratification of the ESM is not in our interest. It is in our interest even more than most other European countries. The ESM, like the fiscal stability treaty, is only part of the solution. No one is pretending that any single element of this is a solution in its own right. Together, all of these elements are vital to solving the eurozone crisis and to reinjecting stability into both the eurozone and the Irish economy. There is no magic bullet but these measures are yielding positive results.
I would like to quote a report on Bloomberg News that appeared at 4.30 this evening:
Europe's comeback from the brink is extending to the region's corporate debt market, where borrowers are selling bonds at the fastest pace in two years [...] The European Central Bank's injection of cash into banks through loans and Greece's debt restructuring is raising optimism that the region's sovereign crisis will be contained. The cost to borrow for European non-financial companies has fallen at a faster rate this year than for issuers in the US, Bank of America Merrill Lynch data show [...] "While Europe still faces many obvious challenges, there has been a combined regulatory and political response to euro area problems," [said a strategist from] Royal Bank of Scotland ... [The strategist further said] "The follow-on risk appetite has been reflected in robust new issuance."
That is a clear response to the fast-tracking of the introduction of the ESM and to the fiscal compact.
There is a new decisiveness in the air among European leaders, something that had been worryingly absent. I was one of the many who had commented on it. There is now a willingness, joint effort and resolve among European leaders to save the euro, which clearly is in this country's interests, which is backed up by strong action.
The European Union is turning its focus to growth, but we must be honest that growth cannot be achieved without confidence and stability in the market and across the eurozone. Anyone who talks about growth in a vacuum is misleading and pretending that there are simple solutions. We must restore confidence and stability to the market in order to foster the environment we need to see growth within the eurozone. That is the Government's objective, on which we are delivering.
I welcome the opportunity to make a brief contribution to the debate on the Private Members' motion tabled by the Sinn Féin Party. Fianna Fáil set out its position on the fiscal stability treaty in recent weeks. We have made it clear that while the treaty proposal does not represent an overall solution to the eurozone financial and debt crisis, on balance, it should be supported. Limited and all as it is, it does recognise the core objectives already signed up to by the country in the six pack of measures and other European initiatives to ensure fiscal discipline is an important part of the eurozone and that the existing budget deficit figures - 23 of the 27 countries in the European Union are in breach of the terms of the European Stability and Growth Pact - are adhered to and that such breaches do not become a permanent part of the landscape on the map of the European Union.
That said, we have also been critical of the Government's handling of the negotiations. What lies at the heart of the Sinn Féin motion is the agreement by the Government to sign away access to European Stability Mechanism funding for countries that do not ratify the treaty. Such a strategy has increased the stakes considerably in the forthcoming referendum. If this country does not ratify the treaty on which the people will vote in future months, we will be exposed to the international markets over a period. That is an enormous risk to expose the people to. I note the inclusion in the July communiqué of a statement to the effect that the European Union remains committed to supporting countries currently in a programme through financing, provided they meet the programme conditions until they regain market access. The question arises as to where that commitment stands in the event that a programme country rejects the fiscal stability treaty. We are critical of the fact that the Government has signed away that insurance policy and safety net.
The bottom line is that it is not possible to say with any degree of certainty whether a second bailout will be required by this country. We will know this time next year or in 15 months or 16 months time whether the country is in a position to exit the programme and return to borrowing in international markets in the normal way. We hope that will be achieved, but it remains an open question. There are many variables, some of which are outside the country's control, which will determine whether we will be in a position to return to the markets. As a Parliament, we must ensure the country has access to funding in order that the State can continue to operate and function in the normal way. It would be disingenuous of anyone to suggest in some way that if we do not accept the treaty and that if we were not relying on our international partners for funding, there would be no need for austerity. That is not a realistic proposition either because the bottom line is that every country with a budget deficit will have to eliminate it over a period. Either our international partners who are lending to us will insist on this or the international markets to which we would look for funding will insist on it.
Sinn Féin takes the view that it will be all right on the night; that if we reject the treaty, the European Union will continue to fund us, and even if it does not, there will be other sources of funding. It has cited the IMF as one potential such source, but its party leader has already said it should be sent home with its money. That would be the other potential source of funding for the country closed off. While we are critical of the way the Government has negotiated the treaty, the people must arrive at a decision based on what has been put in front of them. On balance, the treaty should be supported by them.
Like the previous speaker, I welcome the opportunity to speak on the issue. It is an important debate to have in the House in setting out the stall of the Government and the political parties on the European fiscal compact treaty referendum to be held in the near future. It is important that we have an honest debate on the position of the country in the European Union, the supports we receive from it and the mechanism for governing the Union. We must also debate the perceived democratic deficit at the heart of the Union in ensuring citizens have direct access to decision-making processes at EU level.
When I spoke some months ago on the Finance Bill, I was critical of the European Commission. That is still the case. The Commission has been inept. It has not been capable of standing on its own two feet and flexing its muscles in the face of the Franco-German alliance that has been very much to the fore in recent times in dealing with the crisis. I accept that ultimately much of the money and support through our troika partners comes from the Germans, but the broader issue of democratic accountability is one that will be discussed in the treaty debate.
We must be honest about what would happen in the event that the treaty is rejected in terms of access to funds in a continuing programme or whether it would undermine our ability to return to the international markets. They are key issues on which we must be honest. If we say we should reject the treaty, we must examine the downside of that decision because it is clear that there would be downsides to a rejection of the treaty. In having a debate about this country, its position in the European Union and its relationship with it, we must also point out that if we reject the treaty, there could be serious consequences in the provision of funding for services in this country. That is one issue we must revisit in the near future.
The broader issue of the purpose of the fiscal treaty is to ensure cohesion among member states in terms of fiscal responsibility. We are all aware the Stability and Growth Pact failed miserably to bring responsibility to the various member states in budgetary management. This country was held up as a prime example of a country which was living within the constraints of the pact and remaining under the 3% target year-on-year.
In addition, the issue arose of the banks and how lending was allowed to escalate out of all proportion. That leads me to another important point: the European Central Bank has failed miserably in its responsibility to the eurozone and the broader European Union. There must be a fundamental examination of its role which should not be just to maintain a watch on inflation. It should have a broader remit in terms of provision of support for the currency and to ensure lending practices throughout the European Union are responsible. The Government, the previous Government and the people could deal with the imposition of a reduction in the budget deficit, but the funding of banks is another factor that is creating significant hardship. They are key issues in the European Central Bank almost abdicating its responsibility to ensure oversight in previous years of lending to states on the periphery by large member states at the centre of the European Union. That was obvious to people involved at the heart of the Union, but there was continual lending from Germany and the larger economies to nations on the periphery. We are now in a situation where we are being forced to pay back the money. What Deputy Michael McGrath stated a number of weeks ago in the context of at least delaying the repayment of the €3.1 billion of promissory notes is a key issue. It is the right thing to do because we now have access to other forms of funding that we did not have when that deal was put in place. I would urge the Minister of State, Deputy Creighton, to use all her diplomatic skills to ensure the repayment is delayed and that we can put a fair rational repayment to the people in the context of our commitments on the promissory notes as well.
I welcome the opportunity to contribute to this debate and I thank Sinn Féin for tabling the motion. While I do not necessarily agree with the content of the motion, neither do I agree to a large extent with the amendment proposed by the Government. Notwithstanding that, I have always believed that if there are difficult issues that involve the people, especially when they are issues that will ultimately go before them in a referendum, it is important we in this House discuss the issues at every available opportunity and thrash it out among ourselves because it is only through debate in this House that media attention focuses on the various issues. Taken from whatever standpoint one so wishes, it generates debate and allows the people an insight into the different aspects of the treaty that will ultimately go before them in order that an informed decision will ultimately take place. This is why my party put so much stock into encouraging the Government from the outset to hold that referendum.
Sadly, the Government negotiated this treaty in the expectation that there would not be a requirement to refer it to the people, and that is why we are having this discussion. I cannot imagine that the Government would have allowed a clause to appear within the context of this treaty that closed us off from access to much needed funding in the event of there being a requirement for a second bailout, which some Ministers indicated as their strongly held view was that such would be the case.
Neither do I think, if the Government had expected to hold a referendum, would the Minister, Deputy Varadkar, have gone on the public airways and suggested - I am paraphrasing or to some extent putting words in his mouth, but it largely encompasses the context of what he said - that extraneous issues would form part of the debate and that the people would not be in a position to judge the important issues from the peripheral stuff. This is a fairly simple treaty and it is my view that the people will have a clear view on it. I believe, therefore, that the Government got caught entirely off-guard here.
It is beyond me how the Government could not have engaged with the Attorney General's office on an ongoing basis. It seems they were engaging with some legal advice, and comments made by various individuals in Europe have always indicated that the Irish position was to try to find a solution. If we go back on the various different iterations of the draft documents, we moved from a situation where there was talk about a constitutional requirement to a constitutional requirement being preferable. That was clearly done to facilitate the Government's desire to avoid taking this to the people, and that is why I think it has been done in an exceptionally hamfisted way.
Notwithstanding that, my party supports, as Deputy Michael McGrath stated strongly, the necessity to bring about a better level of management of our public accounts and to do so in association with our partners in Europe. I agree with my colleague, Deputy Kelleher when he spoke of the treaty not going far enough, particularly as it should relate to the ECB, and that it is only a stopgap measure. Until such time as the ECB gets its head around being the lender of last resort, until such time as it understands the necessity, as happens with the Federal Reserve within the United States, of transfers taking place between richer and poorer states, and until such time as there is a clear understanding of the Community approach to the management of debt through the issuance of eurobonds, there will not be an appropriate mechanism to deal with the ongoing crisis. I accept the markets are calm and there is, I suppose, no reason to see how they should change, based on the different matrices one would normally apply in this regard, but the fundamentals have not changed.
I have a question and it is a pity there is nobody from the Labour Party here to answer it. I was quite amazed as I listened to "Morning Ireland" to hear the Minister, Deputy Rabbitte, say he strongly supports the candidacy of M. Francois Hollande, the leader of the Socialist Party in France, for the presidential election which will take place in April and May of this year. Interestingly, M. Hollande has stated that, in the event of he being elected president, he will renegotiate this treaty. Is it a case that M. Hollande has seen the way the Labour Party operated prior to the election, the way it succeeded in doing a few handbrake turns very soon afterwards, and has been looking to its catechism for his election, or is it that the fraternity of the Labour Party across Europe has something it has not told us about and that it has a grand plan to do something very different after the French election? It is merely a question I pose. It is not for the Minister of State, Deputy Creighton, because I appreciate she has always been a strong supporter of the European project. It will be interesting to see how the Labour Party will enlighten us on that statement. No better man than Deputy Rabbitte, I am sure at some later stage, to enlighten us on where he is coming from on that issue and the consequence for the State in the event of his friend being elected President of France.
I welcome the opportunity of speaking briefly to this motion. There is a direct connection between the level of debt and this fiscal compact treaty. Regardless of whatever wording is designed to be put in front of us, the ECB basically instructed this country not to allow a bank to fail. When an entity gives an instruction, it must back that up with some sort of compensating action. That did not happen in this case. Ireland's bank debts would not have arisen had it not been for the design of the euro and the cheap European funding that was available to peripheral countries from countries such as Germany. The people themselves will make that direct connection.
What we cannot ignore either is the fact that we will be asked to insert the terms of this treaty in the Constitution - the 0.5% structural deficit and the 60% debt-to-GDP ratio. This is why the German Chancellor, Dr. Angela Merkel, wanted to include this as a constitutional provision. I presume the Minister of State, Deputy Creighton, will be aware, one cannot enact legislation that is repugnant to the Constitution. How will we enact a finance Bill in the future if we must keep with those numbers and at the same time have this gigantic debt? There is a direct relationship between the two.
This intergovernmental approach is a disaster for Europe. We are talking about money markets. There are in excess of 500 million people in Europe and we are not looking at what this European project is supposed to be. I know what it was supposed to be, but it is not that. Now it is exclusively about money markets. I appreciate the need for stability and for a currency that is sustainable, but if there is to be more Europe, we need to start talking about what kind of more Europe there will be, whether it will be about money markets or about something with a much bigger vision. I still do not see any leadership in Europe in that regard.
I too am delighted to be able to say a few brief words on the European fiscal compact treaty debate. I welcome the debate and I welcome what the Attorney General decided and the statements from an t-Uachtarán freisin.
I do not believe we would have this debate only for what has happened, and it is totally anathema to the Government because it is caught, and why would it not be? Its members are telling us, as I heard from different Deputies in this discussion, that they will have a good, clear, concise debate. What will they do with Big Phil? Will they bring him into the equation? If they do, he will make a mess of it-----
-----Minister Phil - as they have made an appalling mess on rural water services, the septic tank issue and now the household charge. It is utter pandemonium. They should be ashamed of themselves or else they will have to dislodge him or lose him somewhere. They are in big trouble if they have Ministers like him coming out.
Then there is the Minister, Deputy Burton, coming out with her statements on projections of timescales on when it might be held. The Government is in disarray.
When the Taoiseach and the Minister, Deputy Noonan, went abroad, the lads at home had a field day. I do not know what the Taoiseach will do when he comes back. The Chief Whip was abroad and they lost a vote in committee. We came in to speak on a very important motion put forward last week by Deputy Michael McGrath and there was not a Member on the other side of the House for 12 minutes. So much for Merkel and Sarkozy's way or Labour's way. There is not a Labour person here tonight.
This is an appalling situation. The ECB and the European Commission have been asleep in regard to fairness and equity across the European project. They have neglected and abandoned it. They have allowed money to be pumped in here from bigger banks. Now, they want Paddy to pay. The Taoiseach said Paddy must know. Paddy is not a fool. If the Taoiseach, the Tánaiste, the Minister, Deputy Noonan, and the Minister of State, Deputy Creighton, cannot find the green jersey, we will get it for them, but they had better put it on and stand up for Ireland. Mise Éireann. This is Ireland we are talking about. We are being blackguarded by the European people. We are being blackguarded by the banks. The Government has got to find its courage. They pilloried the last Government, yelling day and night as to what they would and would not do, and they pointed out the inadequacies of the Government of the time. They have been a dismal failure with the Commission people. All the Taoiseach, Deputy Kenny, wants is pats on the back, a smile and "Goodbye there, maith an buachaill. Go back to Mayo, Taoiseach, and-----"
I compliment the Sinn Féin motion. I plead with the Government to get real with the banks and with everybody else and to give the people room to breathe. They should be ashamed of themselves given the way they are dealing with this at the moment. If they do not understand what it is going on out there, they will get a rude awakening. This referendum has not a hope of being passed - críochnaithe, game over.