Dan Boyle (Green Party)

In 1993 at the time of a referendum on the Maastricht treaty I found myself arguing whether this country should consider being part of a future European currency. This issue did not figure in that debate as the main preoccupation was whether the amount of development funds received from the Edinburgh summit was £6 billion or £8 billion. It is unfortunate there was not a debate on such an important decision for the country. That said, the Maastricht criteria are excellent tools for the management of national finances. For the most part we have lived within those criteria. Circumstances in the past two years have meant that the figures of a 3% budget deficit and a 60% debt-GDP ratio have been wildly exceeded. We have found ourselves in the company of a number of other European Union member countries and euro currency member states. This time last year, when trying to seek finance on the international bond market to attempt to claw back the deficit over a six-year period, we were being charged more than Greece. Some of the painful but necessary measures the Government had to take have at least pulled Ireland away from the situation now faced by Greece, Portugal, Spain and, probably, Italy.

Many countries have found themselves with a deficit in borrowing. With this the euro has come under threat from international speculators. While we can argue the reasons behind this, the euro is seen as lacking the coherence of other international currencies such as the US dollar, yet the American economy is $13 trillion in debt and probably far weaker than the combined European economy. That, however, does not seem to be exercising speculators. The ratings agencies which have been discredited throughout this process still hold sway in how the markets behave. This has led to a dangerous situation in Greece.

Ireland has had to deal with a double economic shock caused by international factors and flaws in previous domestic policies that have brought up our borrowing needs, as well as a banking and financial crisis, yet it finds itself in the unusual position of being asked to offer a sizeable loan to the Greek state to cover difficulties which we consider we have at least begun to overcome through our policy decisions. These are difficult days for Greece. Its budget deficit is actually lower than Ireland's, but its national debt is far worse. The measures proposed by the Greek Government, induced by the eurozone working with the International Monetary Fund, IMF, have provoked a reaction in the country. It has something to do with its culture and a Mediterranean temperament that a dangerous situation has developed.

The loan facility is being made available with some uncertainties in the background. This collective action through the loan facility will provide the necessary stability, guarantee and a greater sense of certainty that the money will return. Our capacity to lend in current circumstances has improved because of the policies the Government put in place earlier last year. The money can be loaned, but the uncertainty arises in getting it back. The last European Council meeting of finance Ministers gave sufficient guarantees which underpin the Bill's principles. The overall position, however, remains uncertain. Recent statements by the Greek finance Minister that his country's participation in the euro is not guaranteed in the long term raise further questions. So too do the comments by the German Chancellor, Angela Merkel, about the euro being in crisis. It is important that if this loan facility is to work, it is built on collective action, solidarity and confidence. That is the message that must be sent to the wider financial world.

The underlying statistics are positive. The most recent European Commission forecast for 2010 indicated the rate of eurozone economic growth would be less than 1%, yet Ireland's would be 3%. Ireland is in a better position than it was in the past and can have confidence that it will meet its collective responsibilities in the eurozone and this loan facility.

Achieving a balanced budget figure by 2014 must, however, be strictly observed. Current trends indicate it is still difficult. Last year, while we were dealing with the double shock to the economy, the concern was that when recovery did occur, there might be a double dip, but that risk is now dissipating. The new risk is posed by the instability and uncertainty in the eurozone and the role that will subsequently be played by the Greek, Portuguese and Spanish Governments. The measures adopted by these countries in reducing their deficits have been tough but courageous. That should give Ireland heart in continuing on the road it has chosen. Although there are inherent risks in what we are embarking on in the Bill, the Minister for Finance has obtained sufficient guarantees. This is dealing with an interim difficulty that we can overcome because the European Union and the euro need to do so.