Lorraine Higgins (Labour)

I welcome the opportunity to speak in the debate on the Treaty on Stability, Co-ordination and Governance in the Economic and Monetary Union. This is the most important treaty to come before Irish people for their consideration and has been the subject of much scaremongering. This has been addressed by the Tánaiste recently in the Dáil and will continue to be addressed by the Government as the referendum approaches.

We must be mindful that the word "stability" is at the core of the treaty title. This word must resonate with each and every one of us given that we have craved stability in previous politically and financially insecure times. What does stability mean for this country? It is about adhering to a Keynesian economic framework, whereby we strike a delicate balance between taxation and distribution in the good times in order that we have a sufficient cushion should anything untoward happen to the economy. The problem with the current recessionary times is that during the Celtic tiger period, Governments did not save for a rainy day, budgets were giveaways and banks were largely unregulated and consequently ran amok. Developments subsequently have been highly unfortunate.

As a small, open economy, it is imperative that Ireland has plans in place for stability. Under the treaty, we will be compelled to ensure the Government deficit does not exceed 3% of gross domestic product, the structural deficit does not exceed 0.5% of GDP and our ratio of debt to GDP does not exceed 60% of GDP. These figures will be scrutinised by the Department of Finance, the European Commission and the European Council in order that we have full accountability for our financial movements. However, provision is made for some flexibility, as in the event of exceptional circumstances the State may deviate from the figures. By virtue of the revised Stability and Growth Pact of 2011, Ireland will be compelled to abide by the figures I cited irrespective of the outcome of the referendum.

The fundamental difference a "Yes" vote would yield is that the Government will be able to choose how these targets are reached, thereby helping us regain some degree of fiscal sovereignty. This will be but one step in the right direction. Furthermore, the passing of the treaty will mean Ireland will not have to suffer the indignity of paying more than 8% interest on the bond markets or having our debts given junk status. We will also have access to the European Stability Mechanism, ESM, a permanent rescue funding programme to succeed the temporary European Financial Stability Facility and European Financial Stabilisation Mechanism in the 17 member eurozone. The ESM will be launched as soon as member states representing 90% of the capital commitments have ratified the treaty, and this is expected to occur in July 2012.

We need to be part of this process to ensure our long-term financial security. The train is leaving the station and it is essential that Ireland is on board. We need to pass the referendum for stability, to aid our recovery, to provide certainty to investors and consumers and ultimately to create jobs. We need to maintain our high levels of foreign direct investment. A "Yes" vote will signify that we are serious about recovery and our fiscal and economic independence and will help us build political capital in the European Union. It is ultimately a vote for a better future.