Eamon Gilmore (Dún Laoghaire, Labour)
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I move: "That the Bill be now read a Second Time".

I am pleased to introduce the European Communities (Amendment) Bill 2012 following the outcome of last week's referendum. The history of the European Communities Act itself stands as a reminder of the length and depth of Ireland's relationship with what has become the European Union. It has served as the means of domesticating each successive treaty in Irish law. It charts our progress as the Union has widened and deepened.

Our journey in Europe has been a positive one for this country and for its people. Last week's result takes that journey another step forward. It has sent, and has been received, as a strong signal that Ireland wishes to remain in the mainstream as a committed member state. It has underscored our commitment to a strong and stable euro, the currency we share with our partners. It has strengthened our hand as we face into one of the most important and significant periods in the Union's history.

Throughout the referendum campaign, the Government argued that in Ireland, as in Europe, stability is necessary for growth, and growth is necessary for recovery. This reality has now been accepted at the highest levels within the Union and developing a growth strategy for Europe will be the foremost item for discussion when the European Council meets later this month.

Key issues for discussion on that occasion will include mobilising all Union policies, especially the Single Market, and ensuring a better flow of finance into the economy to create jobs and growth, whether this is from the EIB or through project bonds. We will avail of all possible synergies between action at European and national level to contribute to job creation, with youth unemployment a particular priority for us.

An important debate is also taking place on what steps are necessary to restore stability to the euro and to take economic and monetary union to a new stage. President Van Rompuy is working to identify the main building blocks that will be needed and the best way in which this work can be advanced. He is doing so in conjunction with the presidents of the Commission, the ECB and the euro group and will report to leaders at the end of the month. I welcome this forward looking approach. The time has come to move on.

I hope the collective approach will be both practical and ambitious. It is very clear that Europe's problems will not be resolved unless and until growth is delivered, until the poisonous link between banking and sovereign debt is severed and until difficulties in the banking system are confronted and dealt with resolutely and credibly. The outcome of this discussion must be a solution that works for Ireland and that assists our recovery, including in making our bank related debt more sustainable.

Throughout the referendum campaign we heard from people of the very real impact the crisis is having on their lives. People are under real pressure and are worried for their own future and for that of their children. The Government is very conscious of the high burden of responsibility it carries. We know that all of the high level discussion in the world is of little value unless it makes a real and tangible difference on the ground for our people, our families and our businesses. The Government will take last week's result not just as a vote in favour of the passing of the treaty itself, but as a call to redouble our efforts to work for recovery and fresh hope.

The Bill is short and technical in nature, but significant in its import. The Government published it at the beginning of last month, in line with our explicit commitment to make available, well in advance of the referendum, all legislative proposals that were in any way related to the proposition put to the people concerning the Stability Treaty last week. It was in full knowledge of the Government's clearly stated intention to legislate for the amendment to Article 136 of the Treaty on the Functioning of the European Union, in order to provide that legal underpinning to the ESM, that our people went to the polls on Thursday last. The Bill, thus, is part of the legislative follow-up to the popular will and solemn decision of the Irish people, as explicitly expressed through last week's vote. It is all the more important for that.

The purpose of the European Communities (Amendment) Bill 2012 is to amend the European Communities Act 1972 to do a number of important things. It provides that the Protocol amending the Protocol on Transitional Provisions annexed to the Treaty on European Union, to the Treaty on the Functioning of the European Union and to the Treaty establishing the European Atomic Energy Community, and the European Council decision amending Article 136 of the Treaty on the Functioning of the European Union with regard to a stability mechanism for member states whose currency is the euro, shall both form part of the domestic law of the State. If the Bill is passed, these two elements would, upon ratification by Ireland, become a part of the domestic law of the State.

The first element is the protocol on transitional measures on the composition of the European Parliament.

The Lisbon Treaty provides for 751 seats in the Parliament, compared to 736 seats previously. The allocation of these seats under Lisbon increases the number of MEPs allocated to 12 member states, while reducing Germany's allocation from 99 to 96, which is the maximum for any member state. Ireland's number of MEPs remains unchanged.

This protocol bridges the gap between the existing Parliament which was elected in June 2009 before Lisbon entered into force and that which will be returned in 2014. The aim of the protocol is to include in the current parliament the additional seats which are provided under the Lisbon Treaty. In June 2009, 736 MEPs were elected and an additional 18 "shadow MEPs" were given observer status in anticipation of the entry into force of the Lisbon Treaty. The European Council in December 2008 and June 2009 adopted declarations to the effect that transitional measures were to be adopted as soon as possible to provide legally for the additional MEPs, while not reducing Germany's allocation until the next elections to the European Parliament in 2014. The protocol was agreed and signed by all member states on 23 June 2010. Ireland ratified the protocol on 23 November 2010, with the deposit of our instrument of ratification with the Italian Government in Rome.

Following ratification by all EU member states, the protocol entered into force on 1 December 2011. The entry into force of this protocol thus regularises the position of the 18 "shadow MEPs" and as a consequence the current Parliament exceptionally now has 754 members. From 2014, the Parliament will revert to having 751 MEPs, as intended in the Lisbon treaty. The impact of this protocol is thus entirely temporary, however as this protocol represented a change to the EU treaties, a change to the European Communities Act is thus necessary to provide for that change in domestic law.

The second element provided for in the Bill to become part of the domestic law of the State is the European Council decision amending Article 136 of the Treaty on the Functioning of the European Union, TFEU. Before elaborating on the European Council decision of 25 March 2011 amending Article 136 of the TFEU, I wish to provide the House with some background and context to the decision. When the economic crisis broke in Europe, and in particular when Greece came under severe pressure in the markets, the EU did not have a rescue mechanism through which loans could be advanced to a member state in difficulty. Loans to Greece were, therefore, made through a complex set of bilateral arrangements. That was clearly not a sustainable position. In June 2010, therefore, the European financial stability facility, EFSF, was established with the aim of preserving financial stability in the euro area.

It will be recalled by the House that the EU-IMF package for Ireland includes loans to the order of €17.7 billion from the EFSF. It will also be recalled that loans from the EFSF may be issued only up to June 2013, and that the EFSF is to be liquidated on a date after that when there are no longer loans outstanding. The EFSF was always intended to be a temporary facility. In October 2010, the European Council agreed on the need for member states to establish a permanent crisis mechanism. Difficulties in financial markets led to an acceleration of pace, and the euro group of finance Ministers, at a meeting on 28 November 2010, following a proposal from the Commission, agreed the main features of the future crisis mechanism, to be called the European Stability Mechanism, ESM.

At its meeting on 16 and 17 December 2010, the European Council agreed that the Treaty on the Functioning of the European Union should be amended to make reference to a permanent mechanism to be established by the member states of the euro area to safeguard the financial stability of the euro area as a whole. It was agreed that Article 136 of the TFEU be revised by adding a paragraph as follows:

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. The granting of any required financial assistance under the mechanism will be made subject to strict conditionally.

The meeting of EU Heads of State or Government on 24 and 25 March 2011, adopted the decision amending Article 136 of the TFEU. The amendment to the TFEU will enter into force when it has been approved by all the member states in accordance with their respective constitutional requirements. The European Council called for the rapid launch of national approval procedures with a view to its entry into force on 1 January 2013. The amendment of Article 136 of the TFEU will provide a legal underpinning to the ESM, which is to enter into force next month. Throughout the referendum campaign the Government made clear our strong view that the coming into force of the ESM is very much in Ireland's interests. It follows logically that providing for the amendment to Article 136 of the TFEU, which underpins it, is also strongly in our national interest.

I note that the ESM Bill itself, which was published by the Minister for Finance, will be before this House tomorrow, as I understand it. Thus, I do not propose to go into the detail of the ESM treaty or the contents of the ESM Bill. I do, however, wish to be very clear on a couple of related points that were raised during the debate on the stability treaty. First, in light of the people's decision of last week, Ireland will now ratify the stability treaty. Second, through the ESM Bill, we will legislate for the ESM treaty so that Ireland is in a position to have the treaty ratified in time for its entry into force next month. Third, through the Bill before us today, the European Communities (Amendment) Bill 2012, we will legislate to provide for the amendment of Article 136 of the TFEU.

During the referendum campaign we heard a great deal about why Ireland should attempt to veto the ESM, either through failing to legislate for it or through failing to ratify the amendment to Article 136. That was, and is, nonsense in legal and economic terms. Early entry into force of the ESM is very much in our interest. Why would a country in Ireland's position seek to delay a mechanism which will ensure that it has access to future funding, should the need arise? That makes no sense. In legal terms, we do not have the capacity to prevent the ESM entering into force; as the House is well aware, the treaty will enter into force once it is ratified by those providing 90% of its capital. Ireland is providing 1.59%. We do not, therefore, possess a strong lever, even if we were minded to deploy one. Through agreeing to ratify the stability treaty last week the people have voted to ensure Ireland will have access to it. It is the solemn duty of this House, therefore, that their views be respected and fully acted upon as quickly as possible.

As I said at the outset, the Bill before the House today covers two distinct elements. However, in the interests of the efficient management of business, the Government will propose that it be amended to provide for two other elements when it goes through its Dáil Committee Stage next week. It might be useful to the House, therefore, to say something about these new elements today. The first new element will propose that the European Communities Bill be amended also to provide that certain parts of the Croatian accession treaty shall become part of the domestic law of the State, as soon as Ireland ratifies the treaty. Approval of this amendment will pave the way for Ireland's ratification of the Croatian accession treaty. The forthcoming accession of Croatia, planned for 1 July 2013, will see the end of the EU integration process for that country; but it will, I hope, also mark the beginning of the accession of all the countries of the Western Balkans. Ireland is a strong advocate of the enlargement process, particularly as it applies to that region.

Croatia's journey to membership has been a long one. In June 2000, at the European Council meeting in Feira, Portugal, the EU confirmed that all the countries of the Western Balkans were potential candidates for EU membership. The EU-Western Balkans Summit that took place in June 2003 in Thessaloniki, Greece, saw the reaffirmation of this European perspective for the countries concerned. Croatian accession is proof that the EU holds to its promises, that the process may be complex, difficult, and demanding, but that there is certainty about the outcome. Ireland has been positively associated with Croatia's accession process from the beginning. During the Irish Presidency in 2004, this country sought and achieved a single clear decision on granting Croatia candidate status. The intervening eight years have seen the Croatians undertake onerous reforms in order to bring their legislation in line with the EU acquis. The acquis has become ever more complex. Croatia was the first acceding country to have to negotiate specific chapters on rule of law, the judiciary, fundamental rights, justice, and security.

Negotiations with Croatia were finally concluded at an Intergovernmental Conference on 30 June 2011. The process of drafting the Treaty of Accession was completed in September 2011 and it was signed in the margins of the European Council meeting on 9 December last. The Taoiseach signed on behalf of Ireland. We have now welcomed Croatia into our meeting rooms as an acceding state with active observer status. That is to allow it to become familiar with the working methods of the EU institutions and to be involved in the decision-making process before its accession. The process of ratifying the accession treaty has also begun. Croatia held a referendum in January on EU accession which saw an emphatic result in favour, with two thirds of voters agreeing to Croatia's future as an EU member state. The Croatian Government proceeded to ratify the treaty on 4 April this year. A further five member states have also ratified the treaty to date.

The task of negotiating and agreeing the terms of membership has been a mammoth one. It involved alignment with tens of thousands of pages of EU legislation. In the process, Croatia was required to make difficult economic choices and brave political decisions. Throughout the process, the EU has worked closely with Croatia, measuring its efforts against the exacting conditions of membership. For our part, Ireland carefully monitored the entire process, especially the conduct of the accession negotiations in policy areas of particular significance to us, such as agriculture, regional policy and institutional questions. The process is not yet complete and the Commission continues to monitor Croatia's progress, with particular attention to the issues of the judiciary, corruption and privatising the shipbuilding industry. Decisions will also need to be taken by individual member states, including Ireland, on whether to allow immediate access to our domestic labour markets for Croatian nationals. However, this is not a matter for decision now.

Croatia's accession will see our European family expand to 28 members. Croatia's success is the best proof of how strong and successful the transformative power of the enlargement policy can be. The Croatia that is on the verge of EU membership is different than the country that applied for accession to the EU nearly a decade ago. Croatia's foreign Minister, Ms Vesna Pusic, visited Ireland last year in her previous role as president of the national committee for monitoring EU accession negotiations. During my meeting with her and her colleagues, she spoke of how the accession process and the reforms it entailed had been to the overall benefit of Croatia. She pointed in particular to the requirements on the judiciary and fundamental rights. This area has seen the greatest reform, which she considered to be the EU membership negotiations' greatest benefit for Croatia.

Croatia's progress has shown others the way and proven that the benefits of European integration are within their grasp. Croatia has shown that it is possible for a country once ravaged by war and inter-ethnic strife to build stable democratic institutions where fundamental rights are respected and the rule of law is strengthened. It has shown that it is possible for a country that declared its independence just 21 years ago to build a competitive economy that is ready to form a part of the Internal Market and that has coped with the financial crisis.

I am also encouraged by Croatia's stated commitment to help its neighbours in the western Balkans to reach their goal of EU membership. The Croatian Government has already generously shared its translations of the acquis with its neighbours. It has undertaken to share its experience of the accession process to help guide others along the path. Croatia will prove to be a responsible member of the Union with which Ireland can work effectively.

As we debate the other aspects of the Bill, it is heartening to be reminded in this time of crisis that EU membership remains attractive and that countries are prepared to make painful reforms in order to join it.

The second amendment to the Bill that the Government will move on Committee Stage will provide for the protocol on the concerns of the Irish people on the treaty of Lisbon, which was signed in Brussels on 16 May to form part of the domestic law of the State. The signing of this protocol represents the culmination of a process that reaches back to the agreement reached among the EU leaders at the European Council meeting of 18 and 19 June 2009 when they agreed upon a decision on the concerns of the Irish people on the Lisbon treaty with regard to the right to life, family and education; taxation; and security and defence. The European Council stated that the sole purpose of the protocol would be to give full treaty status to the clarifications set out in the decision. The protocol will clarify but not change either the content or the application of the Lisbon treaty. In taking its decision, the European Council agreed that, at the time of the conclusion of the next accession treaty, the decision's provisions would be set out in a protocol to be attached, in accordance with the respective constitutional requirements of the member states, to the Treaty on European Union and the Treaty on the Functioning of the European Union.

As Croatian accession is moving closer and the process of ratification of its accession treaty is under way, it is timely that the process of turning the decision into a protocol is also being advanced. I warmly welcome the signing of the protocol, which is a case of our EU partners again delivering on their solemn promises. These are not entered into lightly and are delivered upon as agreed. It is fitting that this amendment is being introduced alongside the Croatian accession treaty. The amendment will pave the way for Ireland to ratify our protocol. I look forward to all EU partners having done so by the end of June 2013, which is the target date for the protocol's entry into force.

This Bill is short and technical, but significant, and touches on some of the most important issues confronting the Union. I look forward to an informed and reasoned debate. I commend the Bill to the House.

Seán Ó Fearghaíl (Kildare South, Fianna Fail)
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Tá áthas orm deis a fháil labhairt ar an ábhar tábhachtach seo atá os ár gcomhair um tráthnóna. As we begin this debate, it would be appropriate to pay tribute to the Tánaiste, his director of elections, the Minister for Social Protection, Deputy Burton, his partners in government and their director of elections, the Minister for Agriculture, Food and the Marine, Deputy Coveney, for their work on the campaign. I am sure that the Tánaiste will-----

Eamon Gilmore (Dún Laoghaire, Labour)
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Reciprocate.

Seán Ó Fearghaíl (Kildare South, Fianna Fail)
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-----acknowledge the work done by Deputy Martin. It was a clear demonstration of a positive and constructive Opposition. Our director of elections, Deputy Dooley, toured the country with Deputy Martin.

I also acknowledge the reason and dignity with which the campaign was generally conducted by people on all sides of the divide. There may have been a bit of political opportunism and some outrageous claims may have been made from time to time-----

Jonathan O'Brien (Cork North Central, Sinn Fein)
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Deputy Ó Fearghaíl is forgiven.

Seán Ó Fearghaíl (Kildare South, Fianna Fail)
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-----but we can all be quite satisfied with the nature of the campaign.

We all accept that last Thursday's decisive vote in favour of the stability treaty was a significant step along a long and winding path towards tackling the euro crisis for this country and Europe as a whole. The past four years of the crisis have placed the Union and the eurozone in particular under unprecedented stress. Fiscal imbalances, the threat of financial contagion and a profound disequilibrium between eurozone economies on a scale unimaginable to the signatories and creators of the Maastricht treaty dominate the EU agenda. The stability treaty establishes a fiscal framework as one part of a larger, complex puzzle of measures that are needed to stave off the collapse of the euro and the ensuing disastrous economic consequences. It is a step towards confronting the euro crisis.

The European Stability Mechanism, ESM, which replaces the temporary European Financial Stability Facility, EFSF, and European Financial Stabilisation Mechanism, EFSM, with a €700 billion financial bazooka, is the next step along the road to confronting the immense challenge that the euro faces. Despite threats from opponents of the stability treaty who continue to fail to outline where they will get the money from, the ESM represents a back-stop and a source of reliable funding at sustainable borrowing rates if Ireland requires it post 2013.

This Bill is the first step in a two-stage process in passing the ESM, which is the latest piece in the puzzle of addressing the euro crisis. While the technical details of the ESM will be fully fleshed out when Second Stage of its passage is debated tomorrow, this evening is an opportunity to look at the broader necessity of the ESM. I will outline the context of the crisis and its origins before speaking about the necessity of the ESM and its role in the broader, complex and arduous task of addressing the profound structural problems in the euro.

Examining the origins of the current crisis gives us some perspective on this important Bill and the need for the creation of the ESM as well as a sense of what future action will be required. The Maastricht treaty created a revamped European Union and a common currency that had two aims, those being economic and political. The economic aim was to provide financial stability and integration away from the endemic fluctuations and pressures of floating exchange rates. The political aim was to strengthen the "ever closer Union" following the dramatic shifts in the political topography of Europe after the end of the Cold War.

Since 1970 and the creation of the Werner plan for monetary and fiscal union, the proponents of deeper European integration and the economic stability and growth that they hoped it would bring envisaged a currency union as a positive European force. Currency conflicts such as the infamous battle of the franc in 1992, when the French central bank desperately attempted to retain some parity with the ever strengthening Deutschmark, underlined the damage that fluctuations in exchange rates could inflict upon a common market. The limits of efforts such as the currency snake to provide stability had been ruthlessly exposed by the divergent strengths of European economies. Black Wednesday in Britain, when sterling dropped out of the exchange rate mechanism, ERM, thereby tarnishing the economic reputation of the Conservative Party, is testament to the difficulties of exchange rates and the pressures under which they place governments. Furthermore, the dramatic political backdrop of the fall of the Berlin Wall, the re-unification of Germany and the end of the Cold War was a tectonic geopolitical shift on a scale not seen since the defeat of the Axis powers in 1945.

The creators of the single currency were operating on terra nova, a changed Europe. The original raison d'être of the EEC had been underpinned by the omnipresent spectre of the USSR, which helped to unify the rest of free Europe. The loss of this unifying force and the re-unification of Germany re-ignited old fears among a generation of leaders still shaped by the Second World War about the prospect of overbearing German dominance across the Continent. Under the guidance of Jacques Delors in the Commission and the leadership of French President François Mitterrand and German Chancellor Helmut Kohl, the EEC sought to forge a new union and common currency that would allay such fears and ensure a European Germany rather than a German Europe.

It is against this backdrop of strategic political demands and objectives that the Maastricht treaty took shape and established a common currency to achieve both its economic and political aims.

The common currency ultimately expanded across 17 of the 27 EU member states. A successful transition from national currencies, buoyant economic growth across the Continent and the convergence of bond yields for participant countries near the historically low Deutsche bond levels masked profound problems with the design framework of the euro. Behind the reality, however, disequilibrium between eurozone countries occurred where large current account deficits and surpluses accumulated, as countries did not have the usual economic indicator of an exchange rate. This allowed for a sharp economic divergence to develop, particularly between northern and southern eurozone countries. The accumulated trade surpluses in certain countries were recycled by their banks fuelling asset bubbles and consumption in other countries. The euro both facilitated and masked the problems at hand. The inability of countries to use the traditional currency devaluation lever to adjust and compete with other countries placed greater pressure on internal devaluation and the recessionary impact that can have.

Behind the initial success lay structural problems that were utterly exposed in the aftermath of the fallout from the sub-prime mortgage crisis that emerged in the USA. The collapse of Lehman Brothers was a cataclysmic event that starved the markets of funding and exposed the weaknesses of certain eurozone countries. The limits of the eurozone structures were completely laid bare by the pressures that countries blocked out from the bond market and struggling with banking debt were coming under. Ireland had adhered to the criteria under the Stability and Growth Pact that aimed to stabilise fiscal policy across the eurozone, unlike France and Germany which were the first to break the pact. Yet the deeper problems in the euro, the problems we are now seeking to address, ultimately generated the grave challenges we face as a country today.

Since 2008, Europe has in effect being playing catch up. The scale of the problems have become increasingly apparent and the scope of the solutions, many of them politically inconceivable at the start of the crisis, are coming to the fore. The initial creation of the European financial stability facility, EFSF, and the European financial stabilisation mechanism, EFSM, as funds for supporting countries that were unable to access funding on the bond markets, was an ad hoc response to an escalating situation. The fiscal treaty was another step towards addressing some of the underlying problems of the eurozone. The evolution of the European Central Bank, which has purchased bonds on the secondary market and launched a multi-billion euro LTRO, long-term re-financing operation, to finance banks and avoid the banking system from freezing over is also another milestone in adapting to the crisis. The European Stability Mechanism, ESM, represents a permanent funding mechanism to support countries on a level and scale inconceivable even three years ago.

In light of the weariness of creditor countries to lend money and the EU restrictions on financial support, the creation of the ESM marks a significant shift in eurozone policy and a transformation of pre-existing thinking on the crisis. While Europe has stalled on several issues and the pressing need for change is all too clear the creation of the ESM, the evolving role of the ECB and the passage of the stability treaty all represent significant steps forward for a Union often derided by the term "euro sclerosis".

This Bill is the first step in the two stage passage of the ESM, which is a crucial part of the EU response to the euro crisis, providing a permanent bailout mechanism and a financial backstop for eurozone countries. Vetoing the ESM, as some opponents advocate, will simply generate uncertainty and deny Ireland access to a reliable source of money at sustainable borrowing rates if necessary after the bailout funds finish. It amends Article 136 of the Treaty on the Functioning of the European Union, the Lisbon treaty, to allow for the establishment of a permanent financial support mechanism, the ESM for the eurozone. Ireland's membership of the ESM involves two steps - ratifying the treaty and the Dáil passing an amendment to Article 136 of the EU treaties.

The stability mechanism will provide the necessary tool for dealing with such cases of risk to the financial stability of the euro area as a whole as experienced in 2010 and, hence, help preserve the economic and financial stability of the Union itself. The finer technical details of the ESM will be dealt with in the ESM Bill which comes before the Dáil on Thursday under the auspices of the Department of Finance.

The question was raised during the stability treaty campaign as to why Ireland is not holding a referendum on the ESM. The Independent Member for Donegal South-West, Deputy Thomas Pringle, has brought a High Court challenge that encompasses the ESM and Article 136. He wants the court to examine the legality of an amendment to an existing treaty which, he says, will also be pushed through without a vote if the 31 May referendum were passed, as it has been. Deputy Pringle has asked the court to look at this amendment before any further action is taken by the Government to approve it. However, legal advice to the Government indicates the changes to Article 136 do not come under the scope of the 1987 Crotty judgment which places a legal obligation on the Government to hold referenda on issues that significantly affect sovereignty. I will not comment further on an ongoing court case except to provide the context to our own discussion on the ESM.

During the referendum debate Sinn Féin and other opponents of the recently passed fiscal compact treaty advocated that we veto the ESM using the Article 136 amendment mechanism to re-negotiate the terms of its loans. However, this ignores two critical issues. It is far from clear that the Article 136 amendment is really necessary to set up the ESM. The European Court of Justice has never said so. The only court to have pronounced on this issue - the German Federal Constitutional Court - produced a highly ambiguous ruling on this point last October. Indeed, the ESM's temporary predecessor, the EFSF, was successfully set up on the basis of another treaty article. In other words, it is unclear that Ireland actually has a veto on the setting up of the ESM. Opponents may be overplaying their hand in threatening a veto.

More importantly, Ireland does not benefit from vetoing the ESM. Why would we want to block a source of reliable funds at sustainable borrowing rates? Threatening to veto an institution as vital as the ESM would be an utterly bizarre strategy for a country in Ireland's weak position. It would achieve nothing other than infuriate those states upon which we are reliant for funding. The ESM provides a reliable source of funding from 2013 if Ireland needs a second bailout, a matter which opponents of the fiscal compact have failed to point out. Furthermore, it provides a backstop which will assure potential investors in Irish bonds that they will be re-paid if the State runs into future financial difficulty, thus lowering Ireland's borrowing costs. If Ireland vetoes the ESM, where will we get money from after the bailout finishes in 2013?

As I outlined earlier the problems with the eurozone are manifold and require real commitment and leadership from across the Continent to overcome effectively. Fianna Fáil has consistently argued that, in addition to the progress made with the fiscal compact treaty and the establishment of the ESM, much more fundamental work remains to be done to save the eurozone. Monetary union needs to be complemented with a higher level of fiscal and political union with EU institutions such as the ECB reformed to suit a new role. We advocate an overhaul of the role of the ECB to allow it purchase the bonds of countries in financial difficulties and adapt a goal of economic growth as well as its current objective of price stability. A pan-European banking resolution and regulation authority which guarantees deposits across the Union should also be established. Debt should be mutualised across the eurozone with the launch of eurobonds which can be used to help stimulate growth. The disequilibrium between member states' economies in terms of government spending, labour unit costs and inflation needs to be recognised and addressed when shaping broader monetary and fiscal policy. The fiscal compact treaty and ESM are small steps towards addressing the broader profound problems that the eurozone faces. The design flaws of the euro need to be tackled if it is to survive in the long run.

The European Stability Mechanism, ESM, is one part of a bigger puzzle and its implementation will be beneficial to both Ireland and Europe. It is one more step for us to take along the road to recovery, and it is important that this House passes this legislation as quickly as possible. I commend the Bill to the House.

Pádraig Mac Lochlainn (Donegal North East, Sinn Fein)
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It is typical of the chaotic approach that has been taken by the EU leadership over a period that this Bill comes before us today in this form. From day one of this crisis, there has been no joined-up and thought-out attempt to deal with the core issues causing this significant social catastrophe for people across Europe. The rule book has been thrown out the window, along with the community method. When the rules do not suit, it seems the EU now ignores them. Britain and the Czech Republic now find themselves half-divorced from the rest of the Union, something we were told for decades would never be allowed to happen.

There has only been one approach tried by the EU with this and previous Governments, which is austerity at all costs, and it has been a failure. It reflects extremely poorly on this Government and once again it has clearly been out-negotiated, allowing itself to accept a blackmail link between the proposed ESM and the austerity treaty. It failed to stand up for Ireland at every point in this crisis, and that performance is continuing as the Irish people are still paying dearly for the failure of the elected leaders. We should be clear that this is a bad way to make law and it is constitutionally questionable.

We call on the Government to publish its legal advice from the Attorney General on this matter. Sinn Féin does not agree with the use of the controversial simplified revision procedure, Article 48.6 of the Treaty on the European Union, to make this amendment. Treaty changes should be arrived at through democratic dialogue and should not be rushed through loopholes. This smacks of backroom dealing and does nothing to inspire confidence among our citizens in the EU and its decision-making procedure. The self-amending clause, as it is called, was inserted into EU law in the Lisbon treaty. Sinn Féin opposed it then and warned it could be used to rush through unpopular and ill-thought out decisions of significant importance without the normal level of scrutiny and democratic debate. We have been proven correct on that point.

Will the Government explain why this route was chosen over the standard approach? Why did it choose the option that allows the least scrutiny and debate? Sinn Féin is in favour of a fund that can be used as a last resort for states blocked from borrowing on the markets. Such an idea ties in with our vision of a Europe which offers genuine solidarity to members when they are in need. We are not willing to support any old stability mechanism. We will not support a bankers' mechanism or one hitched to the train of austerity. Such a mechanism is of no use to the ordinary people of Europe in the medium and long run.

The ESM will inherit many of the failings of its predecessor, the European Financial Stability Facility. There is some hope and time to allow for an improvement in what is being proposed, and the Spanish Government is seeking changes. My colleague, Deputy Pearse Doherty, will outline in detail tomorrow Sinn Féin's position on the ESM so I will not elaborate on it greatly now. Needless to say, it is not Sinn Féin's ideal solution. We would prefer to see the European Central Bank empowered to act as a lender of last resort, with the ability to recapitalise banks where necessary. This is not a realistic political option at this point. As usual, during the crisis, alternatives seemingly are not considered as the system must be protected at all costs.

Greece, Spain and possibly Cyprus, as well as this State, are likely to require emergency funding in the near future. We hope that by supporting this amendment, despite our criticism of how it was arrived at, the EU and our Government will take the opportunity to re-examine the options available and use this facility to create an emergency funding vehicle that matches the needs of citizens. That would be a major step forward in providing stability to the eurozone and the real economy. That is why we are supporting this Bill on Second Stage.

There are two additional items to be added on Committee Stage. I convey Sinn Féin's support for the Croatian accession treaty protocol. It has been a long journey for the Croatian people and in the European affairs and foreign affairs committee there has been a long dialogue dealing with these issues. We have maintained a very active interest in the affairs of the western Balkans. The Tánaiste and Minister for Foreign Affairs and Trade knows our concerns about Serbia and Bosnia. There is an ongoing position in Serbia where homosexual rights activists cannot hold an event to celebrate their rights, which is completely contrary to the progressive culture that is inherent in the European Union. There is also a concern about the approach of the Serbian Government in destabilising Bosnia. Lord Ashdown has been here to outline his concerns, having played a leading role in the region. Croatia is a good news story but before we can see the story replicated by other states in the western Balkans we must deal with certain challenges. Baroness Catherine Ashton, the external affairs representative for the European Union, will have a challenge in that region and although there has been a fair bit of criticism, I hope the issues can be resolved soon.

It was indicated that once Croatia takes up its place in the European Union, there will be access to our domestic labour markets. Ireland should be quite embarrassed about how we have treated the Romanian and Bulgarian citizens, as we have not given them the same rights as other eastern European countries which acceded to the European Union. There was a second opportunity recently for our Government to remedy that injustice and we failed to do so again. I do not anticipate that the Croatian citizens will enjoy those rights but I am hopeful the Government will review the decision it has made on Romanian and Bulgarian citizens. That would demonstrate true European solidarity and give those citizens the same rights as other members of the European Union. It is welcome.

I could comment mischievously about the protocol relating to the concerns of the Irish people about the first Lisbon treaty. I will withhold my comments.

Clare Daly (Dublin North, Socialist Party)
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I wish to share time with Deputy Finian McGrath.

Michael Kitt (Galway East, Fianna Fail)
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Is that agreed? Agreed.

Clare Daly (Dublin North, Socialist Party)
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It is scandalous, particularly as the Labour Party is involved, that we will debate under a guillotine, not just today but tomorrow, items of fundamental importance to the future of Europe and the sovereignty of citizens in this country. Our comments must be corralled into a very short space, which is wholly unacceptable. It is a complete U-turn, yet again, by the Government which was elected on the basis of talking about changes, transparency, open government and involvement of our citizens. It is a shame, and the Labour Party should be particularly embarrassed by it.

Some of the transitional measures in the legislation regarding MEPs are fine but the key reason we will oppose it is the fact it involves the facility to amend Article 136 of the Treaty on the Functioning of the European Union. This was a central issue in the debate we had on the fiscal treaty. It is somewhat ironic and regrettable we are discussing it now as one would think these measures were in place, given the debate of recent weeks. Despite the protests of Fianna Fáil, in order to make these amendments, we need the unanimous agreement of all member states.

The European Union clearly needs the amendment to set up the permanent bailout fund, as it calls it, although "bailout" is a harmless term for what is really extortion. Loan-sharking would be a more accurate way of putting it. The idea, as put forward by Fianna Fáil, that we are simply facilitating the creation of a reliable source of funding is ludicrous. It might have been ridiculous last week in the debate on the fiscal treaty, but this week, given the events in Spain, it is completely ridiculous. Spain alone could subsume the entire fund without any other country getting a look in. The problem is that Europe is at a crossroads and rather than taking stock and changing direction, we are perpetuating the same mistakes and digging a deeper hole.

Fianna Fáil asks from where we will get the money, which was the stock argument in the last few weeks. The facilitation of the setting up of the ESM was supposedly to save the eurozone, but we continue to see huge pressures exerted. A default by Greece or other countries would lead to enormous costs if the eurozone was broken up. There are pressures in that regard. By asking from where we will get the money, it avoids the central question of why we are looking for it. One of the key reasons is bank debt; for us to pay back debts that were never ours in the first place. We must see this debate in that context.

I nearly feel sorry for the Taoiseach, given how much he has been slapped around in the last few days since the passing of the fiscal treaty. Despite his bleating about getting a better deal, he has been firmly slapped into place by his German colleagues and had to admit that despite the passing of the fiscal treaty referendum, it is unlikely the bank debt issue will be sorted out. Let us face it, he was told to go away and that the European Union had more important things to be worried about than him and his bank debt. It shows how naive the Government was in its approach to the referendum and the whole issue of bank debt that is imposing such severe austerity on the lives and living standards of ordinary people across the State.

Doffing the cap will not work. The Government has been told this; therefore, it must take stock and look at this issue in a different way. It is not too late; even though the people voted to pass the fiscal treaty, that does not mean the treaty has been ratified, it merely gives the Government permission to ratify it on behalf of the people. Presumably that permission could be altered afterwards. There is a precedent for this in that the people voted to change the way people were elected to Seanad Éireann, but the then Government did not enact the legislation to make that change. The Government, therefore, has the power not to ratify the fiscal treaty.

The Tánaiste should make a stand because it is clear now is the time for the Government to stand up or be bypassed. We should join the rest of Europe which has not ratified the treaty. We see growing instability in countries such as Germany in which opposition parties have made it clear they are not interested in signing up to the treaty based on the fact that there are no growth criteria. We see in countries such as the Netherlands massive growth in the polls for those parties opposed to austerity and nothing will happen until the Greek and French elections are out of the way. We have the chance to do something, not to let the moment pass. The Government should consider this because we are debating a major change to a key European Union treaty to set up a permanent fund that will cost the country economically and socially.

There has been a lot of discussion about strict conditionality. In the debate on the treaty we were led to believe it just meant that we would sign up to the treaty and then have access to the ESM fund. That is not the case. This is a code word for the acceleration of vicious austerity, a programme of major macro-economic adjustment which will be spearheaded by the European Commission and Central Bank which will decide on key issues of economic policy in Ireland that will have a major impact on citizens. That is what it means - the policies that are being enforced and the neoliberal agendas highlighted yesterday when talking about events in Latvia in recent years where 10% of the population were forced to leave the country, 30% of public sector workers were sacked and the remaining employees had a 40% pay cut. As a result, the Latvian economy shrank by 25%. It has turned around a little, with a small growth figure last year, which is being lauded as a great achievement, but it masks the butchery that took place before it. No economy, never mind a group of economies such as those in the European Union, has ever been turned around by austerity measures. Ratifying this treaty would increase the European tendency to put the interests of bankers and big business ahead of those of the people or the social charter the European Union was designed to deliver.

When we look at changing the treaties to facilitate the establishment of the ESM, we see the Labour Party and Fine Gael going along with it. Article 15 of the ESM treaty indicates how the funds can be used to recapitalise financial institutions. The Labour Party has made a great virtue of how it opposed the bank guarantee, while Fine Gael claims it did not realise what was happening, that Fianna Fáil and the Green Party were to blame and that if Fine Gael had had access to all of the information, it would not have supported the bank guarantee either. What else does this article provide for except a similar situation in all of Europe, transferring private bank debts on to the shoulders of European citizens? Those who were supposedly opposed to this in Ireland, who would have done something about it had they been in government, are now in power and have the opportunity to do it because the Government enjoys the power of veto and has the ability to use its voice such that the rest of Europe will sit up and take notice. Contrary to the remarks made that such a course of action would leave us isolated, it would result in an almighty cheer throughout the rest of Europe from our fellow citizens who have been reeling from austerity measures.

We are talking about facilitating a fund we may or may not be able to access but into which we will definitely have to pay money. The fund is based on an €11 billion provision. From where will this money come? It is money that can be called upon, with an initial payment of €1.47 billion, but we must pay the money in instalments, starting with a sum of €225 million next month, from an economy that is already on its knees and paying billions in interest payments on previous debts. There is the proviso that the amount can be increased at any time, with a demand for the full amount to be paid should it be deemed necessary by the board which will adjudicate on the matter. We have the ludicrous situation where a fund is being set up in order that we can have access to it, but we must also pay into it. By virtue of the setting up of the fund in the first place, it could be instrumental in pushing us in the direction of a second bailout, the very thing it was allegedly set up to prevent. This is economic lunacy and a massive infringement on the sovereign rights of citizens of this state.

We do not have time to develop the points made and, sadly, not all of us will be able to speak in the debate tomorrow on the ESM proper because it is to be guillotined. The idea of legal immunity being built into the ESM such that it will not be accountable or subject to freedom of information requests is scandalous. Crucially, there is the issue of whether a referendum is necessary. I think it is but the matter is before the courts. It is ironic that while we are discussing this legislation, which the Government intends to ram through following a vote, the courts are wondering what way they will adjudicate on it. It does not matter what way this is packaged. The reality is that what is bring provided for is a major transfer of sovereign powers and a major signing off of funds belonging to the citizens and how they will be spent and handed over. The idea that people would not have a say on this or that elected Members would have their debate guillotined is an affront.

The Government parties' method of doffing the cap has been exposed in the past few days. They have been shown to be a bit player in Europe. People are not particularly interested in what they have to say and the polite approach does not work. They still have an opportunity to show a bit of muscle and they should do that by opposing this legislation and the legislation on the ESM which will be before the House tomorrow.

Finian McGrath (Dublin North Central, Independent)
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I am grateful for the opportunity to contribute to the debate. The EU has a long way to go to convince people of its sincerity and trust and the recent referendum showed that clearly when 50% of our citizens stayed at home on polling day. All politicians and Governments must reflect on this. Let us have a proper debate about the future direction of the Union. When 50% of the people stay at home rather than vote on an important referendum, that sends out a strong message about the lack of connection between them and the European project. That is why it is important to have independent voices to act as a watchdog, as most of the large political parties are sleepwalking on Europe and they do not seem to know what is happening on the day. The referendum, the banking crisis and the ongoing debate on the huge debt problem have demonstrated clearly that eurocrats are still sitting on the bench with ten minutes to go. They need a wake up call quickly.

I know where I stand on Europe and, as an internationalist, my political and economic world does not end in Berlin or Paris. However, most of the so-called pro-European politicians and political parties in the House do not know where they are going and that is not quality leadership. We also have a Taoiseach who will not participate in live media debates with party leaders or Independent Members. What kind of message does that send to the people of Ireland and Europe and to the millions of unemployed people throughout the Union? That reflects a lack of confidence, which is not what we need in a time of crisis. We need strong and decisive leaders and, sadly, that is lacking.

The Bill "is necessary to amend the European Communities Act 1972, in order to provide that the Protocol, amending the Protocol on transitional provisions annexed to the Treaty on European Union, to the Treaty on the Functioning of the European Union and to the Treaty establishing the European Atomic Energy Community; and that the European Council Decision amending Article 136 of the Treaty on the Functioning of the European Union with regard to a stability mechanism for Member States whose currency is the euro, shall form part of the domestic law of the State". That is the purpose of the legislation but again the Second Reading has been guillotined. This means the business of signing up to the ESM treaty and committing us to significant expenditure to help bail out Spain and other member states in the coming period could go through all Stages in the Oireachtas by the end of next week with minimal debate in the media about the long-term implications of these steps or awareness of what all this means among the public. The relation of the ESM treaty to the Article 136 of the Treaty on the Functioning of the European Union, TFEU, amendment of the EU treaties authorising it and to the fiscal treaty on which Irish voters decided last Thursday is set out in an excellent book entitled "A Tale of Two Treaties - A Citizens Guide to the Stability Treaties of 2012" by Cork solicitors, Joe Noonan and Mary Lenihan. It is important to deal with the detail of these issues.

The proposal to ratify the ESM treaty as it stands and to approve the Article 136 TFEU amendment to the EU treaties as authorising the stability mechanism envisaged in the ESM treaty is unlawful under EU treaties and are, therefore, unconstitutional in Ireland and other member states. We should examine these proposals closely. Constitutional challenges have been mounted to the ESM treaty and to the Article 136 TFEU amendment in our courts and in Estonia. Deputy Thomas Pringle has launched a constitutional challenge on these matters which opens in the High Court on 19 June. His lawyers are seeking a constitutional referendum on the ESM treaty. They also claim that "the EU treaties should be amended under a different provision of the Art. 48 TEU treaty revision procedure than that being currently used if the ESM treaty as it stands is to be lawfully ratified under European law." The Deputy's legal action is seeking to defend the principle - this has been often misrepresented - that the Union is an entity governed by the rule of law in the face of political attempts to change the European treaties by subterfuge and to open a way of transforming the current EMU into a fiscal-political union for the eurozone. I and many other Irish people share his concern that the integrity of the existing EU treaties and the Constitution be upheld in the face of an attempt by some eurozone governments to take the eurozone captive for their own ends and to organise the EMU on different principles from heretofore by means of the ESM treaty.

I have major concerns about what is happening in Ireland and the world generally regarding the financial crisis and the connections between finance, politics and current and former politicians. A number of top level politicians have recently become members of a secretive corporate billionaire and political society known as the Bilderberg group. Members openly express their desire to see protestors against their new world order "die in plane crashes" or label them as "cockroaches". I find these comments highly offensive and consider the secretive nature of their meetings a direct threat to democracy around the world, as there is mounting evidence to suggest the group's members have purposely engineered the global economic crisis for their own financial gain. The list of members is interesting. They include Paul Gallagher and Dermot Gleeson, former Attorneys General, Michael McDowell, former Attorney General and Minister for Justice, Equality and Law Reform, the current Minister for Finance and Peter Sutherland of Fine Gael and Goldman Sachs International. The agenda of the group's meeting in 2011 includes direct references to the true scale of the Irish economic crisis and it can be seen that members of the group are actively trying to destroy the economy in order that they can personally profit from the financial crisis by investing in the private companies to which our State assets are being sold off at way below their true market value and by financially betting against Ireland on the international stock and currency markets.

Tommy Broughan (Dublin North East, Labour)
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I caution the Deputy that it is important if he makes statements about people who are not present in the House to ensure he uses freedom of expression effectively.

Finian McGrath (Dublin North Central, Independent)
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I accept the Acting Chairman's advice.

I raised EU issues during the debate on the fiscal treaty referendum. Many of us felt the treaty was flawed and did not inspire confidence in the economy. I also said it was a rushed decision. Rushed decisions are bad decisions and this has been proved by a number of decisions taken in recent years to address the banking crisis. I heard the Taoiseach having a go at Deputy Shane Ross this morning regarding his proposal some weeks ago to defer the fiscal treaty referendum. When Deputy Ross put forward that proposal, polls showed that 54% of the electorate wanted the Government to take a calmer and cooler approach. The failure of almost half of the electorate to cast their vote in the referendum last week tells its own tale.

Economic growth and jobs should have been at the heart of the treaty instead of in the form of an add-in which indicated that action will hopefully be taken in six months time. That will be too late for many people. One can only hope that the change of government in France will provide some impetus to progress in this regard. Regardless of the positions taken in other member states, our Government should come out strongly on the issue. There was a great deal of reference during the debate on the referendum to Article 3, paragraph 1, and Article 4 of the treaty, with many of us expressing concern that the additional €5.7 billion in cuts from 2015 would only deepen the recession. Commerzbank, a European financial giant, observed that the treaty was totally irrelevant to an Irish recovery and would have no major impact on it. Although I would not generally be on the side of such organisations, that assessment is particularly clear and instructive.

On the broader issue of economic sovereignty and the sovereignty of the State, I am greatly concerned by the treaty provisions which give powers of oversight to the European Union. The treaty bypasses the Dáil as the final arbiter of budgetary policy and, as such, is yet another agreement which signs away Irish sovereignty and freedom and assigns a power of determination over their affairs beyond that of the Irish people as represented by the Oireachtas. Governments will no longer have a free rein on broad economic policies in terms of when to spend to stimulate the economy. The elephant in the room is that this marks the first serious step towards a federal Union where national governments are subservient to the European Commission or the European Central Bank. I have no difficulty in others expressing support for European federalism - a type of united states of Europe - but my own preference is for a Europe of independent nation states. The global economic crisis, however, has led us to a situation where Germany is the only country in a strong position in these negotiations. The reality is that the entire European Union project is being moulded into the German model for the future. That is an issue deserving of our close attention. We should have been afforded more time and latitude to consider the ongoing debate on the treaty in Germany before asking the Irish people to make their decision thereon.

This morning we heard further proof that the German Parliament, across all political parties, is determined to shut the door firmly on any proposed deal on our bank debt. Many of us made the case during the debate that the treaty opens the door for the European Union to dictate precisely how Irish governments can spend Exchequer moneys and that the current troika arrangements may become a standard in the future. We are all in favour of good housekeeping and seek to adhere to it in our family and personal lives. No Member of this House is opposed to the country getting its financial act together. However, the other elephant in the room is that the treaty includes no provisions for the easing of the debt burden. I have referred to Germany, but the situation in Greece, France and right across Europe is changing by the day.

The Bill provides for the substitution of a new definition for the existing definition of the treaties governing the European Union. I emphasise the word "treaty", which implies a respect for difference and diversity. A community is about looking after each another, not having major players walking over smaller entities. I have spoken to a number of Members of the European Parliament who, although very pro-Europe, are greatly concerned by the manner in which democracy has been shafted in the past 12 months. Recent elections in various member states must serve as a wake-up call to us all. I take this opportunity to wish the Irish football team well in the European Championships. However, concern as been expressed for the safety of supporters in certain locations where we have seen the emergence of political groups on the extreme right. Resentment of the Union among ordinary European citizens is an issue that cannot be ignored by any government.

Section 2 of the Bill refers to the European Council decision of 25 March 2011 amending Article 136 of the Treaty on the Functioning of the European Union with regard to the European Stability Mechanism. The reality, at this time, is that we have stagnation instead of stability, coercion in place of co-operation and authoritarianism rather than governance, all of which is leading to a stifling of growth across the Union. I remind the Tánaiste of his pre-election promises to burn the Anglo Irish Bank bondholders and his claim that it would be Labour's way or Frankfurt's way. I urge him and his Government colleagues to support the pro-growth voices across the Union. The Tánaiste must also support the reform of the ECB that would allow it to issue euro bonds.

Small business owners in this country are very concerned by the provisions of Article 3 which stipulate that eurozone members' budgetary position must be balanced or in surplus, with a structural deficit ceiling of 0.5% of gross domestic product. Article 4 provides that when the ratio of government debt to gross domestic products exceeds 60%, the member state in question must reduce that debt at an average rate of one twentieth per year. These issues were discussed during the debate and remain relevant to today's discussion.

We must have a broader debate on the European Union which allows us to examine in a positive way where we are going and whether we are making the right decisions. Many of us who raised genuine concerns in recent weeks were dismissed as cranks and worse. As an Independent Member of this House and a member of the Technical Group, my responsibility, together with my colleagues, is to ensure every proposal the Government brings before the House is scrutinised, challenged and debated in the interests of the people. I accept without qualm the democratic result of the referendum. However, it must be borne in mind that in my own constituency of Dublin North Central, for instance, 37.8% of voters rejected the proposal on the basis of very genuine concerns, while many others stayed at home. There is a disconnect between ordinary citizens and the establishment right across the European Union.

Olivia Mitchell (Dublin South, Fine Gael)
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I propose to share time with the Minister of State, Deputy Lucinda Creighton, and Deputy Seán Kyne.

Tommy Broughan (Dublin North East, Labour)
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That is agreed.

Olivia Mitchell (Dublin South, Fine Gael)
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We are all aware of the grave crisis facing Europe such that the future of the eurozone project is now in question. We can also see how joined at the hip we all are in terms of our financial and economic futures. The availability of a rescue mechanism for Spain, Estonia, Greece or any other member state is as important to Ireland as the availability of such a mechanism for ourselves. Given the relative size of Spain's economy, it is probably even more important. After more than four years of successive financial crises, we are finally at the end game. That which was heretofore unmentionable - whether one calls it the spectre in the corner, the elephant in the room or the thing of which we are all afraid - is now being openly discussed, namely, the potential collapse of the euro, with a growing view that such an outcome is moving from a possibility to a probability. Parliamentarians across Europe have a role in ensuring that does not happen.

If we thought we were grappling with disaster heretofore, there is now a realisation across the eurozone that we have seen nothing compared with what would befall us were the euro to fail. This would be a disaster not only for Ireland, Spain, Greece or any other individual state, but a cataclysmic disaster for all 17 eurozone countries, including Germany. It would be only slightly less of a disaster for the other EU member states and for the countries with which Europe trades.

This is an enormously challenging time for European leaders, unlike any outside wartime in Europe. The time for pussyfooting is over, as is the time for timid and tentative half measures. We need decisive political leadership in addressing a comprehensive solution not only to the immediate crisis with the euro in Spain but also in ensuring the euro is placed on a sustainable footing if it is to survive. That is the leadership required.

Spain is talking about a bailout requirement of approximately €40 billion, but the reality is - this is widely accepted - that it is only now external experts have been called in to validate its banks' exposure. God knows what the exposure of its banks will ultimately be, but it is widely accepted that it will be considerably in excess of the €40 billion mentioned. Whatever the figure is, Spain must be rescued. If it goes down, we all will. Right now it is more important to our future that it is rescued than any Irish bank deal or renegotiation of a bank deal. That is not to say we do not need a better deal on our bailout programme - we certainly do. That is precisely why the Taoiseach, the Tánaiste and every Minister raise this issue at every opportunity and will continue to do so.

The ratification of the treaty on fiscal prudence and agreeing to these new rules will help by proving our commitment to engaging in sensible fiscal behaviour. So too would a better deal for Spain, especially if the deal shifts the burden from the sovereign to the banks. Currently, that is not permitted. Under existing rules, neither the current EFSF nor the soon to be permanent facility, the ESM, is allowed to make direct injections into banks. However, I am sure it is not beyond the ingenuity of our leaders to find some mechanism to allow the rescue of the banks in Spain which, at the same time, will not drive the sovereign over the edge.

I certainly hope a more favourable deal for Spain which may be negotiated will be reflected in a reopening and restructuring of the bailout deal and conditions for Ireland. On the night prior to the bailout in Ireland when many welcomed the rescue and the funding assured by the the bailout, I spoke in near desperation about the need for the Government of the day to resist being bounced into a bailout. I knew then, even if it was unavoidable in the long term, that once the bailout was negotiated and it was a fait accompli, our fate was sealed. The minute we accepted the deal all of our leverage and all possibility of negotiations were gone and we were immediately bounced into a position of mendicant which we still hold to this day. Whatever way we like to dress it up, we are dependent on others and subservient to their demands in respect of every penny we spend. By accepting the deal and the conditions of the bailout, we also accepted responsibility for all bank liabilities. This protected other countries' banks, prevented the spread of contagion and protected the euro which benefited all of Europe.

For us, it meant that overnight our debt-to-GDP ratio reached monstrous proportions and it is still climbing. This kind of bailout is the last thing Spain needs and it is the last thing Ireland needs for Spain. Europe is out of time and talking about vetoes and postponing decisions is no longer an option. We need to be honest with ourselves and accept that it may mean a move towards a more federal Europe and eurobonds. When I talk about honesty, I do not mean honesty among ourselves in Ireland. We must be honest with others also and move the debate on from a point where we simply talk about who among us is most opposed to austerity. This Bill is a necessary step towards restoring Ireland's and Europe's economic fortunes. As it is a perilous time for Europe, it is a step we must take. As I said, we are at the end game and will not get a second chance.

Lucinda Creighton (Dublin South East, Fine Gael)
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I very much appreciate the opportunity to contribute to the debate on Second Stage of the European Communities (Amendment) Bill 2012. As the Tánaiste set out, the Bill provides for the incorporation into Irish law, once ratified, of two important provisions - the protocol on transitional arrangements for the European Parliament and the amendment to Article 136 of the Treaty on the Functioning of the European Union.

I am particularly delighted to support the Bill in the new context created by the positive outcome of last week's referendum. The Government published the Bill ahead of the referendum in order that the people would have the full picture available to them when they cast their votes. We are now moving forward with its enactment as we said we would. The referendum has sent a clear message to the world about how Ireland sees itself and how it is positioning itself to best secure its economic recovery. We have shown that we are a committed and disciplined member of the eurozone. We believe in fiscal responsibility in Ireland and every other country which has the euro as its currency. This clearly is in our interests. We have ensured this and future Governments will behave in a prudent way and have secured access for Ireland to the emergency funding available to those countries which are members of the European Stability Mechanism and have ratified the stability treaty.

In voting in favour of the treaty by such a significant margin, the people have strengthened the Government's hand when it comes to negotiating the new growth strategy for the European Union that will be the key item for discussion at the upcoming meeting of the European Council and to ensuring Ireland can benefit from any new step taken to stabilise the position in Europe's banks and sever the link between sovereign and banking debt. I welcome the opportunity we had earlier when a number of Deputies opposite were present to touch on many of these issues. No doubt we will come back to them again in the days and weeks ahead.

These are further important steps towards securing Ireland's economic recovery and are most welcome. The Government appreciates that the decision to vote "Yes" was not a straightforward one for many. The economic developments of recent years have placed a significant burden on the shoulders of many ordinary Irish people. The tough decisions we have had to take to get the economy back on track have had real consequences for people's lives, yet despite the very difficult circumstances, a very significant majority was prepared to endorse the treaty as a contribution to moving Ireland forward. It was a courageous decision and the right one. The Government recognises that it places a particular onus on us to redouble our efforts to secure growth, jobs and recovery. It is a duty we take very seriously. As the Taoiseach told the House, we will work diligently and creatively with partners to drive this agenda forward.

As I have noted, the European Communities (Amendment) Bill 2012 provides for the inclusion of two elements in the domestic law of the State. The first is a protocol to the EU treaties which provides for a temporary increase in the number of MEPs. This arrangement applies only for the life of the current European Parliament until 2014. This arose due to the fact that the 2009 elections to the European Parliament took place before the Lisbon treaty had entered into force. Under the Lisbon treaty, 12 member states were to be represented by an additional 18 MEPs. Given that the Lisbon treaty entered into force before the end of 2009, EU leaders agreed that these member states should have their full complement of MEPs for this session of the Parliament too, thus giving rise to the protocol. Given the temporary nature of its effect, this element of the Bill is essentially a matter of good housekeeping.

The second element the Bill seeks to include in the domestic law of the State – the European Council decision of 25 March 2011 amending Article 136 of the Treaty on the Functioning of the European Union - was introduced as a means to provide legal underpinning for the ESM. The change to Article 136 is separate and distinct from the ESM treaty, but clearly the two are related. The entry into force of the ESM treaty does not require the prior entry into force of the amendment to Article 136 - a fact highlighted by the target date for the entry into force of the ESM treaty, next month, while the amendment to Article 136 is expected to enter into force in January 2013. It is wholly in Ireland's national interests to have established an ESM which is strong and robust. The amendment to Article 136 contributes to that end and as such should be embraced by Ireland and the European Union.

Since the publication of this Bill on 8 May, the Protocol on the Concerns of the Irish People on the Treaty of Lisbon was signed in Brussels, on 16 May. Therefore, there are two further EU developments that need to be incorporated into the domestic law of the State. The first is the Irish legal guarantees protocol, which I just mentioned, and the second is the Croatian accession treaty. The Government will bring forward Dáil Committee Stage amendments to this Bill to provide for these additional elements.

In 2009, when EU leaders agreed to provide a series of legal guarantees on a range of issues - including the right to life; family and education; taxation; and security and defence - they did so by way of a legally binding decision. They also agreed that, at the time of the conclusion of the next accession treaty, the provisions of the decision would be set out in a protocol to be attached to the EU treaties at the time of the next accession treaty. With the signing of the Croatian accession treaty, work was progressed on our protocol, culminating in its signing last month. I very much welcome this development as it is yet another real confirmation that the European Union keeps its promises to the Irish people.

The second element to be introduced, as an amendment to this Bill next week, is the Croatian accession treaty. Ireland has been a strong and steadfast supporter of the enlargement policy of the EU. We were among the first beneficiaries of that policy when we joined almost four decades ago, and the enlargement of the Union continues to be relevant and appropriate and a process that Ireland supports. Already our Croatian colleagues have joined us around the Council table as observers. I look forward to welcoming Croatia as the 28th member state of the Union in the middle of next year. This amendment to the European Communities Act 1972 will pave the way for Ireland's ratification of the Croatian accession treaty, which has been already ratified by the parliaments of seven member states and, of course, Croatia itself, following its referendum in January last.

I reiterate the importance of the decision taken in last week's referendum. We again have confirmation from the Irish people that they are determined to remain at the heart of the European project and are ready, willing and able to take the necessary decisions to ensure this sentiment has real effect. I very much welcome the adoption, in due course, of this Bill by the Oireachtas and look forward to pursuing actively the interests of Ireland and Europe in the period ahead. I strongly commend the Bill to the House.

Seán Kyne (Galway West, Fine Gael)
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I thank the people for making the right decision last Thursday by supporting the amendment to the Constitution with regard to the stability treaty. I acknowledge the 57.9% who voted "Yes" within the Galway West constituency. One reason the Irish ratified the treaty - it was clear on the doorsteps - was that doing so would ensure access to the ESM. A "No" vote would have meant Ireland could not access ESM funds, if required. This Bill establishes the treaty in Ireland.

I concur with the comments of Deputy Olivia Mitchell on issues such as eurobonds. I hope eurobonds become more possible in light of our ratification of the stability treaty and its eventual ratification across the European Union. I refer also to the stimulus and project bonds, which clearly ought to be part of Europe-wide recovery, irrespective of whether they pertain to investments in capital projects or otherwise. There is no shortage of projects across the Union and certainly in Ireland.

The European Communities (Amendment) Bill facilitates in Irish law the amendment to the EU treaties to allow the member states to establish a stability mechanism to assist member states in difficulty. It also allows for the appointment of 18 more MEPs. This has arisen following the enlargement of the European Union. During the recent treaty campaign and other campaigns, it was clear that those who argue decision-making has been transferred to Europe, that Brussels is where the real power lies and that we have signed away more of our sovereignty with each treaty were not correct. Their claims are baseless. The falseness is exposed by the very fact that this national Parliament's representatives of the people are debating this Bill only following the successful acceptance of the stability treaty by the people in a democratic vote. We are, in effect, exercising our right as a sovereign, independent people to accept or reject the amendments being sought to European treaties. These amendments have been on the agenda for a number of years now. The idea of establishing a permanent crisis mechanism to safeguard the financial stability of the euro area arose in October 2010 before the last general election. This explains why Fianna Fáil campaigned alongside Fine Gael and the Labour Party for a "Yes" vote, on the stability treaty, which treaty is undeniably necessary to guarantee Irish access to the new stability fund.

It is worth noting that when the European treaties were consolidated into their present form some five years ago, it was stipulated that the Union would intervene financially to assist a member state only when that state found itself in serious difficulties caused by natural disasters, exceptional circumstances or circumstances beyond its control. It is through this ad hoc mechanism that the Union was able to support various countries, first Greece and then Ireland and Portugal. With the benefit of hindsight, it has been logical and appropriate over the past few economically turbulent years that the Union and its member states moved to create a structured and comprehensive assistance fund.

Opponents are continuing to insist that ratification will institutionalise and impose austerity for years to come. This is incorrect. Ireland agreed long before now to reduce its deficit and to tackle overspending, primarily out of necessity. Everyone should know and understand that the country cannot spend indefinitely when it does not earn.

Another inaccurate contention of opponents to the stability treaty and the creation of a stability mechanism was that we could veto the legislation setting up the ESM by failing to pass the required legislation. As the European Union has grown as a community of nation states, the use of qualified majority voting has replaced the national veto in most policy areas, chiefly because the veto has been used to the detriment of Europe and to stall the functioning of the Union on several occasions. A famous example was the empty-chair crisis of 1965, whereby President de Gaulle and other French representatives refused to attend Council meetings, paralysing the Community. The institutionalisation of the national veto led to decades of stagnation. Qualified majority voting promotes co-operation, negotiation and consensus building. The idea that Ireland should resort to using a veto by refusing to ratify the legislation before us is as ludicrous as it is unfeasible.

To be clear in this case, exercising the veto we have would exclude us from a stability mechanism and a bailout fund. Regrettably, Ireland is in a relatively weak position, despite the encouraging economic signs. Why on earth would we wish to block the establishment of a stability mechanism we may ultimately need? I hope that with further responsible decision-making plans and programmes and with a certain amount of fortune in the world economy, we will not require additional access to a stability mechanism. However, as a majority of the electorate realised last Thursday, it is vital we ensure this option is open to us.

Tommy Broughan (Dublin North East, Labour)
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Deputies Dooley and Kelleher are sharing time.

Timmy Dooley (Clare, Fianna Fail)
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I welcome the opportunity to contribute to this debate and I support the Bill. In particular, I support the establishment of the ESM. As the Tánaiste pointed out, this legislation will ensure it is enshrined in European law through the treaty on the functioning of Europe, unlike the EFSF, which tended to float somewhat outside the confines of the body of law that makes up the European Union. For this reason, it is important that the Irish Parliament seeks to address that issue at a very early stage and recognises it appropriately. It would have been difficult to get this measure through during the course of the most recent referendum campaign. The ESM will be in place very quickly when a number of countries have signed the instrument into law. It is hoped it will be functioning well before this measure is enshrined in EU law early next year, as the Minister of State said.

The new stability mechanism is a vital component of the European Union's response to the crisis. It is a measure for which we have been calling for some time. The forerunner to this fund, the EFSF, was an ad hoc measure effectively operating outside the body of law in place to address the crises that existed in Greece, Portugal and Ireland. It is worth noting that, at the time in question, Ireland moved rather quickly to seek to fall within the bailout programme and to seek funds from the EFSF in the hope of preventing the kind of contagion we have seen continue. Despite the fact that Ireland was well funded at the time in question and would have been such for some time, the then Government still felt it was necessary to take action, through accepting entry to a bailout programme, in an effort to stave off the speculators and show that the country was not going to cause further problems. Unfortunately, as I have said, that has not happened. We now find ourselves on the brink of a bailout for Spain and who knows how the situation in Italy will develop in the coming weeks. While the fund is in place, one wonders, if pressure is exerted from Spain for a larger bailout fund or if it involves one of the other countries such as Italy, if it will be big enough. I hope there is advance planning at European level to ensure there will be an adequate response and that we will not find ourselves again having to use the ad hoc approach that we had to use in the past in relation to the EFSF. I am sure Ireland will be contributing in that regard.

As other Members stated, it is clear that the people were cognisant of the necessity for the support of our EU partners in making funds available to this country through the ESM. We clearly hope we will be in a position to re-enter the markets place through the issuance of our own bonds as early as possible. Given the turmoil in international markets and the impact of the recession on many of the countries with which we trade and to which we export, it seems unlikely that we will be able to do this without an extension of the current programme, or perhaps a new one. It is right and fitting, therefore, that at an early stage this Parliament should show its support, having recognised that the people have given us that authority and overwhelming mandate.

When one considers the relatively low turnout, there was a high percentage in favour of the stability treaty which, in addition to the establishment of the ESM, sets in place the budgetary discipline measures required by other member states. For that reason, I, too, congratulate all those who campaigned on both the "Yes" and the "No" sides. The arguments were well and truly thrashed out. Much of the negative campaign was based on a tissue of untruths, particularly as it related to the establishment of the ESM and the notion that somehow it was possible for Ireland to veto its establishment. I always failed to understand why we would want to do that when it was something of which we would potentially have the benefit and for which we had called. Somehow there was an expectation that we would veto its establishment to hold somebody else to ransom, while at the same time there was the suggestion one would somehow weaken the efforts Ireland would have to make to provide for its own budgetary discipline. That was an argument the people did not accept and I am particularly pleased they did not.

As well as to the passage of the stability treaty, we should lend considerable weight to the establishment of the ESM which of itself, is a backstop. It is an insurance policy. It is not a solution to a particular problem, rather it is a backup in the event that the crisis escalates further or is not addressed as quickly as we would like from an Irish perspective. We must still make considerable progress. We had an opportunity earlier - I am sure we will have an opportunity tomorrow in the debate on the European Stability Mechanism - to discuss further the measures needed across Europe. There is a concentration this week on these measures and I hope we can continue the dialogue in the coming weeks. It is only through a continuance of that dialogue, both here and throughout Europe, that some changes will be brought to bear.

We must look at the potential for growth and associated policies. While the French are taking a lead role, it is important that we continue to set out our platform and ideas. While I do not want to be critical of the Minister, I am certainly critical of the Government as a whole in being relatively lethargic in addressing that component of the recovery stream. Without an appropriate growth strategy, we have little chance of addressing the stock of debt the State has accrued.

We must also look at significant reform of the ECB and in so doing so we must talk about its capacity to purchase sovereign bonds in the primary market. I was taken to some extent by what the Governor of the ECB, Mr. Dragi, said, not today but one week ago, that it was time for political leaders across Europe to decide what role they wanted the ECB to play and what character and format it needed to take. He said that was not a decision for him or the board of governors, rather that it rested within the remit of the political leaders. That was a refreshing statement which clearly showed a mindset within the ECB that there was a recognition that it could do more, that it could do things differently but not without a political mandate. The political leaders need to look to the ECB to be able to guarantee deposits across Europe in order that we will not have fluctuations or the movement of capital, as has been seen in Spain and by us. Probably the reason Ireland was bounced so quickly into a bailout was the reserves within the banking system here needed to be protected. We have seen the flight of in the region of €100 billion from the Spanish financial system. That makes it impossible for the banking system to survive in the coming weeks or months without some changes being made in that regard.

We need to look at the issue of eurobonds and project bonds, an issue I addressed with the Minister of State, Deputy Lucinda Creighton. We need a direct approach by the Government on how it will be dealt with.

We must be careful in what we say, both inside and outside the House, about the approach we will take in an effort to ensure pressure is brought to bear on Chancellor Merkel. There has been a suggestion made by some, as I understand it, within the Labour Party that we should challenge the Chancellor to the point where we would put it to her that we would be prepared to leave the euro, print money and go back to using the pound. Anyone who has studied anything in this regard will know that that would have a hugely negative impact. It would lead to a run on our banks and put our membership of the European Union in jeopardy. It would also impact on the rate of inflation significantly. We are a major importer of fossil fuels and a range of other goods and we would see their prices sky-rocket. We need, therefore, to put that suggestion to bed. We will leave it to a certain fringe element which is not taken very seriously on these issues. Certainly, we do not need to hear it from any of the main parties in this House which claim to be pro-European.

Luke Flanagan (Roscommon-South Leitrim, Independent)
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Your economic policies have worked really well, have they not?

Tommy Broughan (Dublin North East, Labour)
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Through the Chair, please.

Timmy Dooley (Clare, Fianna Fail)
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I thank Deputy Luke 'Ming' Flanagan. I would like to hear what his economic policies are. He might give us an insight into how he thinks the country might be run, as opposed to knocking everybody else's policies.

Billy Kelleher (Cork North Central, Fianna Fail)
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I welcome the opportunity to speak to the Bill which obviously my party will be supporting. More importantly, my party welcomes the decision of the people in the recent referendum. The Minister for Transport, Tourism and Sport, Deputy Leo Varadkar, says a great deal. I suppose when he says a great deal, one is inclined to agree with parts of it and disagree with others. One part I found quite amusing early on was that referendums were a little awkward because often many of the issues discussed were not ones related to a particular referendum. When the treaty campaign started, it was evident that most of the issues not covered in the treaty were being introduced by those who were opposed to it in the referendum. There is a referendum commission to adjudicate on what is in and what is not included, but after this referendum we almost should establish a truth commission because there was nothing but lies and deception propagated throughout the country by various groupings which claimed to be political parties with responsibilities, yet at the same time they were instilling fear and causing confusion everywhere they went. It should be stated clearly in the House that this, to say the least, is dishonest campaigning. The holding of a referendum is very important in Ireland. It can change the Constitution which the people hold dear as their last protection. Nevertheless, certain political parties in the House and groupings which claim to be loose affiliates of socialists have wandered throughout the countryside telling bare-faced untruths to the people. They have tried to sow confusion and fear. In fairness, this time the people stood back and analysed the position. They voted not necessarily in their best interests but in the interests of the country. I could never understand the argument put forward by those opposing the referendum. They claimed it would legalise austerity for many years. The European Stability Mechanism establishes a fund to ensure countries which many be unable to access financial markets will have the ability to source funding elsewhere to pay for the delivery of services and the running of the state. If we did not have the ESM we would be at the mercy of the people who, according to those opposed to the treaty, got us into this difficulty in the first place. We would be dependent on the capital markets. We are told continually that those in the capital markets caused the difficulties because capitalism is blatantly a flawed philosophy. If that were the case all the people who voted "No" or who supported that campaign should have supported the establishment of the ESM to ensure we were not at the mercy of the vulture capitalists, as they are eloquently called from time to time by Deputies opposed to the treaty.

I wish to return to what this is all about. Fundamentally, this is about ensuring we have a facility to access funds in the event of our not being able to go back to the markets when we exit the current programme in 2013. Had we voted "No" it would have made it more difficult for the Government and the State to access markets in the years ahead. There would have been a dramatic dislocation in society because we would have had vast cuts to social welfare, health and education. That is not fear mongering or scare-mongering. It is a fact. We would not have had the capacity to fund the State on a daily basis. The establishment of the ESM is a positive step taken by the European Union. Some may suggest it is a belated step and I have been critical of the European Union and the ECB as well.

The role of the ECB should be changed to make it more proactive in terms of investment and acting as the lender of last resort. Clearly, the riding instructions and the establishment of the ECB relate primarily to controlling inflation at the cost of everything else. The Government should be to the fore in examining the ECB, its role and whether it should be expanded to ensure it can see beyond inflation control as its single remit. This should be put at the heart of the agenda. We are well aware there are inherent flaws in the euro mechanism. This is because there are many banks with many regulatory systems but, at the same time, only one central bank which keeps control of the purse strings per se. However, if a bank in a given country runs into trouble and is important to the stability of the economy of that country, the sovereign is forced to bail it out. I accept the view of the "No" camp that this is inherently unfair but one cannot avoid something at all costs because it is unfair. The fact is we need a functioning banking system in a modern economy. If we let all the banks fail then we would have a basket case economy. It is inherently unfair that the Irish person is asked to shoulder the complete burden of private debt. It is inherently wrong as well.

The Government has a mandate in this regard. Those now in government did not have to wait for a treaty to secure a mandate. They were given a mandate last year by the people to go forth and re-negotiate. They promised they would do so. Prior to the election they stated that they would burn bondholders and diminish private debt and the burden on citizens. The Tánaiste said he would take his battle to Frankfurt. The only man who has taken the battle to Frankfurt so far is the Irish Examiner reporter, Diarmuid O'Flynn, who is there with 15 people from Ballyhea protesting outside the ECB at present. The Tánaiste has not gone there yet. Those in government need not have waited for this referendum to pass to strengthen their belief that they were doing the right thing by seeking a reduction of private debt. They promised the people last year that they would reduce it if they were elected. They got elected but the promises have diminished.

Lucinda Creighton (Dublin South East, Fine Gael)
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As the Deputy is aware, there has been a change in the interest rate.

Billy Kelleher (Cork North Central, Fianna Fail)
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That was by accident.

Lucinda Creighton (Dublin South East, Fine Gael)
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It was not by accident. I will not take any lectures from the people who destroyed the economy.

Tommy Broughan (Dublin North East, Labour)
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Through the Chair, please.

Timmy Dooley (Clare, Fianna Fail)
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We were not in power in Spain or Italy.

Billy Kelleher (Cork North Central, Fianna Fail)
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Let us be clear. We are trying to be helpful and to jog the memories of those in government.

Tommy Broughan (Dublin North East, Labour)
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Please, Deputies.

Billy Kelleher (Cork North Central, Fianna Fail)
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We are trying to highlight was said. With regard to the reduction of interest we know-----

Alex White (Dublin South, Labour)
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Fianna Fáil brought us to where we are.

Tommy Broughan (Dublin North East, Labour)
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Through the Chair, please.

Billy Kelleher (Cork North Central, Fianna Fail)
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We know why the interest rate reduction came about. It was because other economies were struggling and they were given a reduced rate of interest as well. The quid pro quo was given to Ireland subsequently. In the interests of ensuring this country can access markets and stand on its own two feet as quickly as possible, the Government must negotiate with the mandate it was given last year on this issue. However, there are conflicting views coming from the Government continually. The Minister of State can dismiss me as much as she wishes but some Ministers have stated the matter is inherently linked to a "Yes" vote and that if we received a "Yes" vote it would strengthen our hand in any re-negotiation of the debt burden in Europe. Some weeks ago the Taoiseach stated he would not have "defaulter" written on his forehead. I am unsure who is right or wrong but these statements are not compatible. We need a strong Government to do this work and, rather than have a quick chat with Chancellor Merkel on the telephone, we need solid diplomacy at its best. We need the Government to plead the case in the context of the promissory notes and the private debt saddled on the people.

The European Union has an obligation to stand with smaller countries. Reference has been made to a partnership approach. No one country runs the European Union. It is a partnership approach and the European Commission has failed dismally. It is the most castrated organisation I have seen in a long time. Effectively, it is non-existent. First, there was the Merkel Sarkozy axis and now we have the Merkel Hollande axis. Under the various European treaties the European Union has an obligation to uphold and vindicate the rights of smaller countries. This is written in the treaties but the Commission has failed abysmally.

We need a resolution to this issue and the quicker it happens, the better for Ireland and Europe. I put it to the Minister of State that her Government is saying opposite things at the same time and this is having a negative impact on the view the people have of Europe. More important, it gives the Europeans and those opposed to addressing the issues underlying our difficulties an opportunity to opt out and not give us what we believe to be fair and just, that is, a re-negotiation to lighten the burden on the people and the country in order that it can return to prosperity and start contributing again.

Pat Breen (Clare, Fine Gael)
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I welcome the opportunity to contribute to the debate. The Bill amends Article 136 of the Treaty on the Functioning of the European Union to allow for the setting up of the ESM. It also facilitates the protocol on the temporary adjustment of the number of MEPs, which will apply to the current European Parliament the additional seats provided under the Lisbon treaty.

The Bill is an important step in moving forward and building on last week's referendum result. I commend the Minister of State with responsibility for European affairs on her work during the campaign. She sent out a positive message. It was not negative. She has done excellent work for us in her role and I expect she will continue to do so in future.

I welcome the result overall and especially the result in my constituency of Clare, where there was a 65.73% "Yes" vote, above the national average of 60.2%. This is the sixth highest "Yes" vote in the country. From speaking to people during the campaign, it is clear they were aware of the importance of passing the fiscal treaty in terms of Ireland's future role in the European Union. The strong message they delivered last week was that they want to remain at the very heart of Europe and to see stability restored to the eurozone. I reject the argument made by a sizeable number of campaigners against the treaty that people made their decision on the basis of fear. Such nonsense does our intelligence and informed electorate a disservice. Voters weighed up the pros and cons of the treaty before casting their votes and set aside their financial suffering and pain for the greater good of the country. Their decision is to be commended. While they recognised that the treaty is not a quick fix for our economic ills, they wanted the Government to have a strong hand and they recognised that economic recovery hinges on events internationally, particularly the outcome of the general election in Greece on 17 June, elections in France later this month and the banking crisis in Spain, which is dominating news coverage this week and may dominate the headlines next week. The situation is highly volatile. People were also conscious of the important role of foreign direct investment in creating jobs. In voting for the treaty they sought to ensure that no damage was inflicted on Ireland's international credibility now that international confidence in the country is at an all time high.

The resounding "Yes" vote has been greeted positively throughout the world. I have received a number of calls from people in Europe and in the United States congratulating us on the result. Deputy Kelleher's statement that we do not have a strong voice in Europe is incorrect. Our voice is heard in Europe and we have a strong team of diplomats working abroad.

When people went to the polls last week they considered how the international markets would react to a "No" vote and where we would obtain finance in the event that the country is unable to return to the markets at the end of the bailout programme. International commentary on the referendum outcome reveals the extent to which the markets and European leaders were holding their breath as they awaited the result. According to the French newspaper, Le Monde, the vote meant the fiscal treaty overcame a "perilous obstacle". The German magazine, Der Spiegel, described the result as "a rare piece of good news for European Leaders", while The Wall Street Journal argued that the outcome strengthened the country's European credentials. The Washington Post stated the treaty "won a decisive and much-needed victory in Ireland in a closely watched referendum". It was important, therefore, that Ireland sent out the right signals to Europe and to the world, especially given our strong dependence on foreign direct investment.

The President of the European Council, Mr. Herman Van Rompuy, described the outcome of the referendum as an "important step towards recovery and stability". In light of the international response to the result, there is no doubt rejection of the treaty in the referendum would have sent shockwaves through the financial markets and we would have been denied access to funding on the markets. The question as to whether we will be able to return to the markets at the conclusion of the bailout programme, as hoped, will be determined by the financial markets. For this reason, stability and a resolution to the euro crisis will be critical.

The economy is performing well and Ireland is on track to meet all the requirements of the European Union and International Monetary Fund bailout programme. Our exports are performing well, with the latest figures from the Central Statistics Office showing that industrial production increased by 1.3% in April, a clear signal that the economy is recovering. Yesterday's Exchequer returns were also highly encouraging. If they continue on their current trajectory, the country will be in a strong position next year.

The main problem facing the economy is the slump in the eurozone. It is important to expand our markets, particularly in countries outside the European Union, including emerging economies. I was recently asked to open a conference organised by the Shannon Chamber of Commerce to discuss opportunities for enhancing our economic and tourism ties with China. The event, which was held at Shannon Airport, built on last February's highly successful visit of the Vice President of China, Mr. Xi Jinping, during which he visited Lynch's farm in Sixmilebridge where a new born calf was named in his honour. The Vice President's visit has placed Irish agricultural exports on the map in China. For the past two years, food exports have expanded by 25%, with food and drink exports to China worth nearly €200 million in 2011.

The potential for export growth to emerging markets is significant and we must have a presence in these countries. I pay tribute to the IDA and Enterprise Ireland whose representatives continue to work closely with high profile trade delegations and missions. Trade missions, of which there have been a number recently led by the Taoiseach and the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, and the Minister for Agriculture, Food and the Marine, Deputy Coveney, are very important. I understand the Minister of State, Deputy Costello, will lead a mission to Russia in the near future. A direct air link between China and Ireland would advance ties between our two countries and I hope the new board of Shannon Airport will examine this possibility.

G7 finance ministers met yesterday to discuss the ongoing crisis, particularly developments in Spain, and vowed to continue to monitor financial developments ahead of the G20 summit in Mexico on 18 and 19 June. A move to address the banking crisis in the European Union is on everybody's lips amid intense speculation that the Spanish banks will need a bailout. At its meeting in Frankfurt today, the board of the European Central Bank announced it would maintain interest rates at their current record low of 1%. While this is a welcome decision, all eyes are focused on how the European Union and European Central Bank will address developments in Spain.

While the vote of confidence in the fiscal treaty has strengthened the Government's hand in negotiations at EU level, as the Taoiseach noted this morning, there are no simple or quick fix solutions. Buoyed up by the outcome of the referendum, the Taoiseach and Minister for Finance are now in a stronger position to make the case that the issue of banking debt must be addressed and there must be a quid pro quo for Ireland in any resolution.

It is also important that Europe brings clarity to the issue of banking because failure to do so would dampen prospects for the introduction of a growth package. A reduction in our debt ratio and the introduction of further growth measures will be critical if we are to make a significant dent in our unemployment figures. This is a major challenge.

By voting "Yes" last week, the electorate demonstrated it is well aware of the challenges that lie ahead for the economy. Voters knew they were voting to have an insurance policy which would ensure the country has access to the European Stability Mechanism. It still may be possible to return to the markets by 2013, as planned. The enactment of the European Stability Mechanism Bill will mark an important step in ensuring Irish people's wishes are adhered to and the bailout fund is put in place.

Alex White (Dublin South, Labour)
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We are debating this legislation in the aftermath of the referendum on the fiscal treaty last week, the outcome of which I welcome. As some of my colleagues have referred parochially to their constituencies, I can have the indulgence of a few seconds to say how pleased I am that my constituency of Dublin South returned the highest "Yes" vote in the country at 76%, notwithstanding the rather late intervention of an independent Deputy in the constituency, whose intervention in the last few days of the campaign was described in some quarters of the press as constituting a game changer. Perhaps it did change the game, but not in the direction intended by the Deputy.

This debate is a relatively net issue in the Bill, although the Government is also taking the opportunity to include another couple of important aspects. Principally we are debating the amendment to article 136 of the treaty. I would have a lot more sympathy for colleagues who were complaining earlier about the guillotine in this debate if there were arguments of substance being put forward as to why we should not support this Bill and not agree to what is being proposed. Having listened reasonably carefully for most of the afternoon, I cannot identify any argument of substance other than the general argument to the effect that we do not want anything to do with all that, and that we know we are against it before we even read it. That is to what these arguments amount.

I take a slightly different view from some of my Government colleagues on the "Yes" side. While I agree there were strong reasons inherent in the referendum proposal which justified a "Yes" vote, it still constituted a relatively modest proposal to the people. This is because many of the measures which the change in the Constitution will allow the Government to endorse are already in place. Amidst all of the noise of the past three or four weeks, that point was missed. Those on the "No" side now have a difficulty facing up to the consequences of the arguments they made at the time, and this was evident earlier in Deputy Daly's speech. The Deputy pressed the Tánaiste on what the Government would now do, given that the people had agreed to amend the Constitution. She correctly pointed out that the amendment to the Constitution is a permissive, enabling amendment that will allow the State to ratify the treaty. It was claimed that many rules would be put into the Constitution if the referendum were passed, but of course none of those rules was put into the Constitution. Do those on the "No" side still hold to the view that what the people did last week was to enshrine austerity permanently in our Constitution? Are they seriously saying the Irish people gave a mandate to permanent austerity last week? If that is what they think happened last week, they will have problems with their politics in future, because that is not what happened, and that was not what the people were asked to do, in spite of the claims on some of the "No" posters. The people agreed to permit the State to ratify this treaty.

Deputy Daly stated today that it was pointless setting up a fund like this because if Spain goes down, it will use up all of it, or at least the lion's share of it. Even if she is right - I do not think she is - how is that an argument for not having a fund? She stated that Ireland would have to contribute to it. The countries have to contribute to the fund because they are setting it up. We cannot conjure money out of the air, although perhaps Deputy Daly and her colleagues think we can. The most extraordinary argument of all was Deputy Daly's point that the setting up of the fund would itself push us towards a second bailout. From where do these people get these arguments? Surely they must be embarrassed when making such points. What possible argument is being advanced to the Irish people?

Deputy Daly's comments were reflective of the nature, tone and content of the arguments made in the past four weeks. I said the proposal put to the Irish people was modest, but the decisive reason for the victory of the "Yes" side was what the "No" side were saying. Perhaps I am alone in thinking that, but I believe the "No" side won it for the "Yes" side. When people read the proposal initially they probably thought it was modest and not much about which to be enthusiastic. However, they had to listen to arguments from the "No" side, with all the untruths and the misrepresentations in the teeth of what the treaty said. For example, the argument was made that there would be no conditionality on funding in the future. We were urged by Deputy Boyd Barrett and others to forget that part of it. Reference was made to selective quotations on the treaty. People are not stupid. They were able to see they were being told "porkies" by the "No" side. The truth was being misrepresented to them by many on that side.

Sinn Féin has come around to supporting the Bill, which is to be welcomed. There would be no logic to its position if it were not to do so. However, some colleagues remain here who think we ought not go ahead with this proposal, but have offered few arguments to support that position. Deputy Daly complained that people are always asking where will the money come from. She does not want that question to be asked. It is a hard question for her and for her colleagues, and it is useless saying that people are asking the wrong question. Deputy Daly and her colleagues have not answered the question because they cannot answer it.

Deputy Finian McGrath made the point earlier that there is a certain amount of sleep walking going on across Europe on where the Union and the eurozone are headed. He is right on that. There has been a lamentable incrementalist approach to change in recent months. There has been a paralysis of decision making, which is regrettable. It may now mean that change will have to happen very quickly. People have said we are at a fork in the road and that the European project, and certainly the eurozone, will go one way or the other - either towards closer integration or towards break up. We have managed to arrive at this binary dilemma and it is one way or the other. If I am right that it is a choice between one route or the other, those who advocate that we should not take the more integrationist approach have also got a responsibility to propose to the Irish people what they think ought to happen to our country in the future. They cannot keep saying this is the wrong question. Deputy Daly talks about the Government being naïve, but the perspective she has been advocating in this House is devoid of credibility as an alternative analysis for the Irish people.

Let us join in the politics of what needs to happen. I am pleased Francois Hollande was elected in France. I do not agree with some of my colleagues who say it does not change very much and that growth was already on the agenda. I know growth was already on the agenda, but the Sarkozy-Merkel political approach to what constitutes growth has been ruptured by that election, and that is a good thing. It changes the conversation about what needs to be done for growth, and I wish colleagues would get involved in that debate rather than turning their backs on it.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I had planned to say certain things but I must respond to Deputy White.

Tommy Broughan (Dublin North East, Labour)
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I remind you, Deputy Boyd Barrett, to respond through the Chair.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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The idea that it was the arguments of the "No" side that led to the passing of the referendum is an interesting analysis. It gives little credit to the arguments of the "Yes" side and is not borne out by the facts. The polls showed that the percentages on the "Yes" and "No" sides did not shift from the beginning of the campaign to the end. It looks as though the arguments pretty much cancelled each other out, from the beginning to the end. Deputy White made an interesting political jibe but it does not stand up to scrutiny or to the evidence of polls taken consistently from the beginning to the end of the campaign.

The issue was always the fear of the consequences of voting "No". The Government and the "Yes" side traded on fear of the unknown, of the dire consequences of funds not being available to the State, of money not coming out of ATM machines and of pensions and social welfare not being paid. That is the message the Government gave and that ordinary people got. It is the message canvassers heard on the doorsteps from people who were intending to vote "Yes". They were afraid. Fear was whipped up relentlessly by the "Yes" side throughout the campaign. A significant proportion of those who voted "Yes" did so with a heavy heart because they were angry at being asked to carry the can for the crimes of others in the Irish financial and political systems and for the greed of developers, speculators and others. They voted "Yes" with a heavy heart because they were afraid of the consequences of a "No" vote.

There were mixed opinions on the "No" side, but the United Left Alliance has a clear alternative. Unlike the Government and the "Yes" side, we do not promise ridiculous fairytales such as investment, stability and certainty. No one can promise those. We did not promise them. The "Yes" side did.

Bernard Durkan (Kildare North, Fine Gael)
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Deputy Boyd Barrett did not promise anything, except oblivion.

Lucinda Creighton (Dublin South East, Fine Gael)
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Armageddon is what they promised.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I will get to that.

Bernard Durkan (Kildare North, Fine Gael)
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Some of the methods of canvassing were not very nice either.

Tommy Broughan (Dublin North East, Labour)
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Please address your remarks through the Chair, Deputy Durkan.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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The "Yes" posters emblazoned investment and recovery and stability. Certainty was a slogan. That was a fairytale. There is no stability.

Bernard Durkan (Kildare North, Fine Gael)
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Where were those slogans?

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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We do not promise stability, at least not in the short run. The Government should not have promised it, but having promised stability, it should deliver it. One would have to be living in a parallel universe to imagine that a decision taken last Thursday or the rushing through of the ESM would lead to stability. Can Deputy Durkan stand over that?

There is rampant and well-founded speculation that if the people of Greece are not willing to take even more poisonous doses of austerity, which has already decimated Greek society and its economy, Greece will be forced out of the eurozone. No one knows whether that will happen. There is no certainty.

Bernard Durkan (Kildare North, Fine Gael)
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Where would Deputy Boyd Barrett get the money from?

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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There is a widespread belief that if Greece exits, as a result of being bullied out of the eurozone because it is not willing to accept more of the poisonous austerity that has done such damage, the result will be catastrophic for the wider eurozone and could spell the beginning of the end of the eurozone. That is very likely. It is also likely that a Greek exit would tip the eurozone further into recession and, possibly, into a depression. No one really knows. To suggest that stability and certainty lie on the other side of the vote is nonsense.

Bernard Durkan (Kildare North, Fine Gael)
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A "Yes" vote was the better option by a long shot.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Certainty was repeated again and again. We do not have certainty of funding. There is no security.

Bernard Durkan (Kildare North, Fine Gael)
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We need certainty, security, stability and reliability. These are all the things Deputy Boyd Barrett rants against.

Tommy Broughan (Dublin North East, Labour)
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Deputy Durkan, you will have an opportunity to speak in a few moments. Please allow Deputy Boyd Barrett to speak.

Bernard Durkan (Kildare North, Fine Gael)
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I apologise, a Chathaoirligh. I am upset.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Of course Deputy Durkan is upset.

Bernard Durkan (Kildare North, Fine Gael)
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I am upset by that rubbish which I have been hearing for the past three months.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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He does not like being disagreed with. I understand that. He will have his chance.

Lucinda Creighton (Dublin South East, Fine Gael)
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Deputy Boyd Barrett also had his chance, and the people gave him their answer.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I remind Deputy White that the United Left Alliance clearly set out an alternative. Sooner or later that alternative will be debated, when the austerity agenda crashes further into crisis, as it is destined to do and as the foundations of the eurozone are shaken further by the disastrous strategy being pursued by Angela Merkel.

Alex White (Dublin South, Labour)
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Default was what Deputy Boyd Barrett proposed.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Absolutely, and I will say it again: default, default, default.

Bernard Durkan (Kildare North, Fine Gael)
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That is sound economics.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Deputy Durkan's sound economics-----

Bernard Durkan (Kildare North, Fine Gael)
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Deputy Boyd Barrett's sound economics are total nonsense.

Tommy Broughan (Dublin North East, Labour)
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Deputy Durkan, you may have a private conversation later. Please speak through the Chair. Deputy Boyd Barrett has the floor.

Bernard Durkan (Kildare North, Fine Gael)
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I apologise again, a Chathaoirligh, but it is very hard to listen to that.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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They do not like hearing alternative proposals.

Bernard Durkan (Kildare North, Fine Gael)
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We do not like nonsense.

Tommy Broughan (Dublin North East, Labour)
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Deputy Boyd Barrett, please speak to the Bill.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Some of us believe the alternative is to refuse to pay the gambling debts of bankers, financiers and bondholders and that alternative would substantially reduce the debt burden on the country and our deficit.

Alex White (Dublin South, Labour)
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It would bury us.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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It would not. In addition, we need to nationalise our banking system.

Alex White (Dublin South, Labour)
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We have done.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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By nationalising, the United Left Alliance means that as well as recapitalising banks, we would actually control their policies. It is amazing that Deputy White and others on the Joint Committee on Finance, Public Expenditure and Reform bemoan the fact the banks we have recapitalised will not provide adequate finance to small and medium enterprise or give an adequate break to distressed mortgage holders who cannot make their repayments and are threatened with the loss of their homes but continue to insist we have nationalised the banks. It was my understanding that if we nationalised the banks, we would control them.

Alex White (Dublin South, Labour)
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Should politicians decide who gets a loan?

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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People who are democratically elected by the people, yes.

Bernard Durkan (Kildare North, Fine Gael)
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The politburo.

Lucinda Creighton (Dublin South East, Fine Gael)
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My God.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Does Deputy Durkan think it better to have in charge of our banks the same bankers who led us into the crisis and who are paid half a million euro a year?

Bernard Durkan (Kildare North, Fine Gael)
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I have never heard economic theory like that in my life.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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We understand.

Bernard Durkan (Kildare North, Fine Gael)
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The Deputy should understand, after the referendum vote.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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We believe the people, through democratically elected representatives, should control the financial system, so that we dictate the lending and investment policies of the banks and so that those policies are directed towards the social good, investment in small and medium enterprise and infrastructural projects, the development of strategic industry and enterprise and all the things that are not happening now. The banks are not putting the money back into the economy. No matter how much we shovel money into the banks, it does not go back into the economy. We throw up our hands and ask why the banks do not do this, that and the other, but we refuse to exercise control over them.

It is not a question of exercising control over every nut and bolt. It is about setting the strategic priorities for the banking system and telling banks that our priorities are distressed mortgage holders and keeping roofs over people's heads, employment and putting people back to work, and developing strategic enterprise and industry in order to put people back to work and generate real wealth, real growth and real revenue. Is Deputy White saying we cannot do that?

Alex White (Dublin South, Labour)
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We can do it.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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We are not doing it.

Alex White (Dublin South, Labour)
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We cannot do it with la-la economics.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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It is not la-la economics. It is about setting the strategic priorities and enforcing them on the banking system.

Alex White (Dublin South, Labour)
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That is what we are doing.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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We are not doing it.

Alex White (Dublin South, Labour)
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Of course we are doing it.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Where is the money going in? Why are small and medium enterprises screaming week in, week out about how they are being starved of credit by the banks that we have recapitalised? Why are they screaming if it is all working swimmingly?

Bernard Durkan (Kildare North, Fine Gael)
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I do not think Deputy Boyd Barrett is living in the real world.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Why have trillions been put into the European banking system and still the money is not going back into the European economy, which is being suffocated? The European economy is contracting and there is a major strike of private sector investment which has collapsed across Europe. Those are the facts. When are we going to wake up and assert control over the banking system which we have re-financed? Do we not have the right to do that? Is it not an absolutely urgent priority that we do it? It seems obvious to me that it is.

Alex White (Dublin South, Labour)
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It is a serious problem.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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In response to what Deputy White said, when people ask where is the money, has he not noticed what we have been doing-----

Alex White (Dublin South, Labour)
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Is this the Deputy's €10 billion Bill?

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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-----for the past two or three years? The money is in the banks because we put it into them.

Bernard Durkan (Kildare North, Fine Gael)
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What world has Deputy Boyd Barrett been living in?

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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The money is in the banks.

Peter Mathews (Dublin South, Fine Gael)
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Deputies should be aware Deputy Boyd Barrett has the floor.

Bernard Durkan (Kildare North, Fine Gael)
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I apologise, a Chathaoirligh. After three months we have to do it all over again.

Peter Mathews (Dublin South, Fine Gael)
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Deputy Durkan will have a chance to contribute in a few minutes. Deputy Boyd Barrett should proceed. He should speak through the Chair.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Yes. The money is in the banks and it is about time we used it for the social good and the development of the economy and society. Furthermore, we have argued there must be a more general redistribution of wealth in society because it is concentrated in the hands of a small minority who are either not spending the money or not investing it in the economy. Figures emerged in recent weeks showing multinationals in Europe sitting on between €2 trillion and €3 trillion worth of uninvested profits. Why are they not investing? It is because they do not think they can make a profit. Why do not think they can make a profit? It is because the demand in the economy has collapsed and they do not think they can sell their goods.

Bernard Durkan (Kildare North, Fine Gael)
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It is because they are worried about Deputy Boyd Barrett.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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We must short circuit that situation and get control of those resources. That means tackling the wealth through corporation tax, taxes on financial transactions and taxing the obscene wealth of a tiny minority who control disproportionate amounts of wealth and reinvesting it in society and in the economy. In contrast to that - a genuinely alternative approach to organising our economy - our Government, along with Mrs. Angela Merkel, cling on the dogma and doctrine of austerity which has failed miserably for the past four years.

Bernard Durkan (Kildare North, Fine Gael)
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Deputy Boyd Barrett thinks we should spend more and that we should forget about prudent economics.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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At least the Government was honest when it said there was nothing new in the treaty. That is exactly the point. That is precisely why we opposed it, because there is nothing new and it is carrying on along the same train tracks of austerity that have led us into this mess in the first place.

Alex White (Dublin South, Labour)
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Does Deputy Boyd Barrett have a mandate for parking austerity?

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I say to Deputy White that we want something new. We want an alternative strategy because the one that is being pursued is not working.

Bernard Durkan (Kildare North, Fine Gael)
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Why is Deputy Boyd Barrett talking about unwise spending and unwise investment?

Peter Mathews (Dublin South, Fine Gael)
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Deputy Boyd Barrett should be allowed to speak.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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If the catastrophes that have been inflicted on this country and on the Greek people as a result of austerity have not woken the Government up to the fact that austerity is not working and that this approach to the crisis is not working, perhaps the Spanish crisis will now wake the Government up to that fact. The hole in the Spanish banks is likely to be anywhere between €100 billion and €250 billion, probably closer to the latter figure. We will have to contribute to that fund, after contributing billions to bail out our own insolvent banks whose reckless gambling and speculation caused the crisis in the first place. We will now have to bail out the Spanish banks, the French banks and German banks.

Bernard Durkan (Kildare North, Fine Gael)
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Should we pay nothing?

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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When will we stop bailing out the banks and start to adopt a different approach where we prioritise people, jobs, economic growth and employment? The Government defends its position by saying that at least there is talk in Europe now of there being assistance to the banks that will not be channelled through the sovereign and will not be unloaded onto the backs of ordinary citizens and the books of member states. That is the Government's big play after the referendum, that it is hoping that the ground is shifting in Europe and that we will be able possibly to ride on the back of whatever Spain gets in the hope that we can get a retrospective deal on bank debt. However, Mrs. Angela Merkel responded to the Government's appeals only days after it had done what she demanded it do in passing the fiscal treaty and said: "Nein, nein, nein." While that is German for "No, no, no.", it could equally be the 999 emergency number we will need to ring for the European economy if we keep going down the road of this disastrous austerity.

Bernard Durkan (Kildare North, Fine Gael)
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I thought about ringing it a few minutes ago.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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At what point will the Government get it? It has taken the best boy in the class routine to the most extreme lengths in pushing through this treaty when other forces in Europe are at least delaying it or beginning to question Mrs. Merkel's strategy. The Government continues with the best boy in the class routine and only a few days after this country passed the fiscal treaty, Mrs. Merkel slaps the Government in the face again. There has been no reward, no deal on bank debt, no change to the terms of the austerity arrangements and she has made it clear that Germany insists that ordinary citizens, working people - the vulnerable - will continue to pay the price of the crisis in the system. All of the assistance will be strictly conditional - that is the key term: "strictly conditional" - on continuing with the poison of austerity inflicted on ordinary people. When will the Government learn that trying to suck up to Mrs. Angela Merkel and the austerity boot boys of the troika is not working? The more one encourages her to think there is no end to the punishment we are willing to take, the more she dishes out the punishment. Despite saying the Government is supporting the forces in Europe that are now calling for a growth and jobs agenda in Europe, the reality is that by ramming the fiscal treaty through with such speed and now the ESM, in particular in the case of the latter which is not being discussed, it is undermining and sabotaging the forces in Europe that are beginning to challenge Frau Merkel.

Bernard Durkan (Kildare North, Fine Gael)
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The referendum was last week.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Yes, and now it is the ESM, which is not being discussed properly. The Government wants to ram it through to prove again to Mrs. Angela Merkel what good boys and girls we are. There will be no discussion on it despite the fact the ESM has profound implications. Throughout the referendum debate the Government presented the ESM as if it was some sort of benevolent fund which was there to assist the people when there was so much more involved in it. Whether one agrees or disagrees, it is utterly dishonest to suggest that is all there is to it, that it is just an insurance policy or a benevolent fund. Serious issues arise from the ESM that must be debated properly. It would be utterly dishonest of the Government to say the people of this country are acquainted in any serious way with the contents of the ESM treaty because they are not. It has not been discussed.

Bernard Durkan (Kildare North, Fine Gael)
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It was also discussed last week.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I accept the fiscal treaty was discussed at length. The Government won the debate. There is no question about that - through fear in my opinion - but the Government did win the debate. However, it is dishonest to suggest there has been a full public discussion of the serious issues that arise out of the ESM because it is not just a benevolent fund. It raises serious questions about the potential cost to the State of establishing the ESM in the event of a further bank meltdown across the eurozone, which is now looking seriously likely given what is happening in Spain and the knock-on effects we are likely to see in France and elsewhere. To be honest, there could be a call on the State of €11 billion or more. This is what the treaty allows.

Joanna Tuffy (Dublin Mid West, Labour)
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The Deputy's time has concluded.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I apologise. I did not know. It is wrong to railroad this legislation through the House in just a few hours. The Government should allow for a proper debate. Instead, this is a continuation of the sucking up to Angela Merkel despite the fact that no matter how much the Government does so, she slaps it down and humiliates it. She is giving it nothing. When will the Government realise that sacrificing the interests of our society and of ordinary people in Ireland to please Frau Merkel is not working and we need to take a different tack?

Peter Fitzpatrick (Louth, Fine Gael)
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May I share time with a number of my colleagues?

Joanna Tuffy (Dublin Mid West, Labour)
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Is that agreed? Agreed.

Peter Fitzpatrick (Louth, Fine Gael)
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I welcome the opportunity to discuss the European Communities (Amendment) Bill 2012. It is particularly apt to be discussing a European Bill following the recent adoption of the fiscal treaty by the Irish people. The relief among my constituents is palpable. I was in Drogheda on constituency work this morning and it is fair to say people were delighted the referendum was passed. An air of confidence is starting to creep back into society. People believe the Government has taken some hard decisions for the good of the country.

Honesty of endeavour and hard work is what the country needs. Tough decisions have been taken, but the Government was not elected to take the easy options or to avoid issues and pander to the masses in a popularity contest. The Government was elected to put Ireland firmly back on the road to economic recovery. That is what we are doing. People recognised that passing the fiscal treaty was part of that process and voted strongly for it. The Irish electorate are intelligent and sophisticated voters. They do not stand for mediocrity and demand the best from their elected leaders. By passing the treaty, they have endorsed the Government's actions.

Last weekend in Collon, I was reminded there had been a fall in the yield on Irish two-year bonds in reaction to the "Yes" vote. This is the type of reaction that is required. That the markets reacted positively is a clear sign the "Yes" vote has been welcomed. I do not mean welcomed for the sake of it, as markets are anything but sentimental. Rather, the vote put Ireland on a sound footing and removed a great deal of uncertainty. As we all know, markets do not like uncertainty. They have also voted, in that they have reduced Government bond yields, which is a strong endorsement of the Irish Government and people for backing the fiscal treaty.

Last week while canvassing in Dundalk, there was a constant and simple message from my constituents. While they did not like on a personal level many of the decisions that had been taken, they realised those decisions had been taken for the good of the country. As a result, they understood and respected the decisions. They realised taking a tough decision now would ensure a better future.

Dundalk and the greater Louth area have seen an upsurge of international companies locating there since the formation of this Government. It is not a coincidence. Those companies can now plan more confidently for the future and new companies looking to locate in Ireland will be greatly encouraged by the decision of the Irish people. The veil of uncertainty has been lifted and Ireland is firmly on the road to recovery.

The purpose of this Bill is to amend the European Communities Act 1972 to provide for a number of measures to form part of the domestic law of the State. One is the amendment to Article 136 of the Treaty on the Functioning of the European Union, which provides a legal underpinning to the European Stability Mechanism, ESM. The other is a protocol on the temporary adjustment of the number of MEPs. I have no hesitation in commending this Bill to the House.

Eoghan Murphy (Dublin South East, Fine Gael)
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I wanted to make these comments in the context of our statements on the European Council but, due to Standing Orders and the equal allocation of time to groupings rather than individuals, doing so was not possible. That needs to change.

Bernard Durkan (Kildare North, Fine Gael)
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Hear, hear.

Eoghan Murphy (Dublin South East, Fine Gael)
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If the Chief Whip is listening, I urge him to move to change the situation.

I have not been able to follow the Council statements or this debate because I have been attending a committee meeting. If we are to be more efficient and to participate properly in the workings of this House, we could make another improvement to our work in this regard.

When the second Lisbon referendum was passed, the consensus was there had been a change from the inward examination of what Europe was trying to achieve, whether integration was improving or whether European functionality needed to change. The idea became one of whether the EU was performing outwardly, that is, in its foreign relations and other aspects of its work. As we now know, that analysis was wrong. Our relationship with Europe and the European project is continuing to change, particularly in terms of its internal functionality. It is a fact of our relationship with Europe that we proceed via referendum, in that we consult the people on the main issues of the day before we continue. We will consult them again in the near future, as it is certain there is more to come in our quest to save the euro. There must be. However, we do not need to march blindly on, wondering what changes may come and when, and only discussing them at the last minute in the pressure of a referendum campaign in which other interests and political motivations come into play. A significant shift in the functioning of the EU is under way through these efforts to make the currency union viable.

It is time we started discussing the end game, what the currency union should be for us and for Europe and what we are willing to do to achieve it. We need to discuss our vision for Europe and our place in it. We now have the room to have that discussion. We passed the stability treaty and our funding post 2013 is secure. As elected Members, it is important we begin the discussion on what the euro will look like in the coming years. We have a fiscal stability plan, but currency unions, euro bonds and the ESM directly intervening in Europe's banking system require more than that. They require more than just coherence of planning. They at least require coherence in fiscal instruments, if not some sort of central control of the fiscal levers of the State. This was mentioned at the outset of the euro project, but it is only being understood now.

It is time we figure out where we stand on some of the key taxation issues if we are to understand and chart the right direction for the future of Europe with us at its core in the euro. We have stated we will not move on the financial transaction tax without our UK partners, as we would not want to put the IFSC at a competitive disadvantage. The UK is not inside the euro and will face different questions than the ones we face. We have stated our corporation tax rate of 12.5% is sacrosanct, which is true. However, would we agree to changing it if we were offered a forgiveness of our banking debt in return? This question deserves consideration, even if control was only given up in principle. If we do not give up any control of our taxation measures, it will have implications for the path we will chart in Europe and for the euro.

These are key questions, given the direction Europe is taking, led by Chancellor Merkel. It is better and more prudent to prepare ourselves and Europe for that future now. A larger referendum is sure to be held in the next few years. We need the euro to survive and it is time to start asking ourselves honest questions about what we are willing to do to ensure its survival and our own with it. I raise this issue now because the constitutional convention is to begin its work shortly. This is an important question for the convention to consider. As a priority, the convention should deliberate on Europe and where we want to be in it. Putting this question at the top of the convention's agenda would make sense. It would also make sense were the Dáil to establish a committee to examine the same issues in tandem. If Europe is moving towards a fiscal union of one form or another, be it a single taxation system or a commonality of taxation policies, we must know what it might look like in order that we can start preparing and decide what we want from it.

Seán Conlan (Cavan-Monaghan, Fine Gael)
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This Bill is an essential instrument of legislation, as it facilitates the establishment of the ESM. Economic and monetary union was always going to call for some element of budgetary discipline among participating states. Originally, this area was regulated by the Stability and Growth Pact. However, that mechanism lost its influence largely by 2005 and collapsed when the Schröder and Chirac Administrations in Germany and France, respectively, proved unwilling to allow the sanctions ordained by the pact to apply to their countries.

A state of inactivity reigned until the EU was faced with the catastrophic events that led to the necessity for the 2010 Greek bailout and the subsequent need for temporary rescue measures to address emerging problems in Ireland and Portugal. These measures relied on Article 122(2) of the Treaty on the Functioning of the EU which in actual fact had only ever been intended as a balance or escape clause to counter the principles as established in Article 125(1) of the same treaty which is known as the no bailout clause.

Events in Germany, where a case challenging the financing of the Greek bailout highlighted deep public opposition to the transfer of funds to less fiscally responsible states, presented a case where such transfers may have become impossible. This, coupled with the possibility of mayhem breaking out in the markets when the current bailout agreements terminated in 2013, led the German Chancellor to address the situation which was beginning to have the capacity to wreck the whole euro project. The current legislation, while having its genesis in the Deauville declaration of October 2010 where the Sarkozy-Merkel team first attempted to confront the worsening situation by regaining control of budgetary disciplines within the euro area, is a more refined instrument. It is aimed at identifying the problems and addressing them in a more pragmatic and less knee-jerk fashion with the endorsement of each participating member required before the amendments take effect.

This legislation before the House is the result of much negotiation and is essential to the economic well-being of the euro area and, indeed, beyond. It is an instrument whereby all participating members can achieve stability in their economies and avoid the excessive fluctuations of both interest and currency rates which adversely affect business, both domestic and international, and, as a result, cause widespread unemployment resulting in large-scale mortgage defaults and misery. It offers to us further affordable funding and protection from excessive interest rates, should they prevail. This is essential to our recovery and to the protection of the very fabric of our society. We must embrace this legislation and identify it for what it is, namely, an instrument of stability, of support in terrible times and of delivery to ensure this catastrophe can never again manifest itself in our national economies.

Regarding the amendments to Protocol No. 36 of the Lisbon treaty, it is clear, as in all matters, that a state of flux cannot prevail. A thing either grows and develops to compensate for changing circumstances or it fades and dies. This amendment is a temporary measure seeking to deliver the provision of extra seats, temporarily allocated to properly selected representatives, to make their representation possible. In doing so, it will cure a temporary glitch which has occurred as a result of the timing of the Lisbon treaty and the European elections. It is correct that we display the flexibility to address such matters and present a vibrant and growing EU.

Bernard Durkan (Kildare North, Fine Gael)
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I was going to respond to Deputy Boyd Barrett but, as he is no longer present in the House, I will refrain from so doing. I do not know whether he, or those with similar views to his, have ever run a business and had to borrow money from a lending institution. If one goes back to that lending institution to say one is defaulting, the immediate aftermath would be economic anarchy with crisis after crisis unfolding. For those who have not read their history, that happened in Europe previously and many people remember it.

Catherine Murphy (Kildare North, Independent)
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What about Iceland?

Bernard Durkan (Kildare North, Fine Gael)
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Irish voters, with no difficulty, said they are in a difficult spot, recognised the writing on the wall and made a difficult decision to support the treaty. There is nothing easy about this as these are tough times. The voting public came to a decision not reluctantly but because they felt it was in their and the country's best interests.

The allegations tossed around like a battering ram by Deputy Boyd Barrett and others that austerity was invented by the Government to punish the people are far from the reality. We are in a difficult situation which we inherited. I am not blaming anyone for it but that is the reality. The Government and the people have been called upon to deliver in the most difficult circumstances ever experienced in the history of the State. We should all take pride in the fact the Irish people rose up in the majority last week and made a clear decision they wanted stability, reality and to move forward. They did not enjoy it. They are suffering and they know we know they are suffering but they made that decision to accept the treaty for a very good reason.

There is one matter in which the country can give a lead. The recognition for political convergence that existed across Europe over the decades has waned in the face of these difficult times. Individual member states have sought refuge in their own revisited nationalism. That is not a good way to go. There is a great responsibility to give the lead in Europe. The Minister of State, Deputy Creighton, has done tremendous work in this area, as well as all Ministers and the majority of Members. There is a job to be done in giving the lead in Europe and taking responsibility for our part in European issues and affairs. That is what the people bestowed on us last week. Each member state must also make its contribution.

Someone referred earlier to sucking up to the German Chancellor. The German people have made many sacrifices over recent years which seem to go unnoticed. The people of this country are also making significant sacrifices. There is simply no manna from heaven or some mechanism that can allow us live in the lap of luxury. We ended up where we are through bad management, bad housekeeping and overspending. Those who profess to know an easier and softer option are not living with reality. The reality is that confidence is generated in the markets when they recognise those in charge mean business. I believe the Irish people were clear in their views last week and made a clear and conscious decision in their own interests and for the whole European project, a decision on which they should be commended. It was a courageous decision in difficult circumstances.

Economic turbulence has a difficult history across Europe. Even a cursory examination of history will show that when economic instability occurs, along with it comes suspicion, aggression, blame and worse. We must be careful and mindful of the circumstances in which this has happened. In the course thereof, we should all now realise that we all have a contribution to make to modern Europe. We know we can make a difference and we have shown others the way. Next year's Irish term of the EU Presidency will be its most important since joining the Union. It will fall to us to show other Europeans who may have second thoughts and think the European project is not working that it actually is. Each member state must make its own contribution in whatever way it can. Together, we the people across Europe will make the contribution that will see us out of our current economic difficulties.