John Gilroy (Labour)

I welcome the opportunity to participate in this debate and pay tribute to the Leader of the House for facilitating it. This is a very important discussion and it is welcome that the main Opposition party in both Houses is also supporting this very important treaty. This is probably the most important decision facing Ireland as a country, as a "No" vote would leave us outside the main decision making processes and areas of influence in Europe. No doubt, I will be accused of scaremongering for merely making that point. However, there must be honesty in this debate. The treaty requires ratification by just 12 countries. The European Union will move on and if we do not ratify the treaty, there is a strong possibility we could be left behind. We should discuss what is contained in the treaty and what those who support it and those who oppose it, having read and reflected on its contents, believe the consequences might be for the country of making a decision on way or the other. There is a grave responsibility on all commentators to ensure this takes place. We should confine our comments to the treaty, not discuss a host of other matters that might legitimately exercise the feelings of large sections of the electorate.

One of the arguments made by opponents of the treaty is that it cedes more of our sovereignty to the European Union. The initial accession agreement in 1972 and each succeeding treaty amendment represented a commitment to a future of partnership within the European Union in pursuit of shared goals and aspirations. Sovereignty means more than just being able to say "No", which appears to be what certain commentators are saying when they speak about a loss of sovereignty. It is a negative quality which betrays a lack of national self-confidence.

Ireland's involvement in the European Union has been and remains positive. If things are bad now, imagine how very much worse they would be if we were not part of the eurozone. One Senator has said we do not have a fiscal problem but a monetary problem. It is generally accepted that a monetary union without fiscal rules might be part of the problem we are experiencing. If there are a number of states bound by a shared monetary policy, but they have an independent fiscal policy, we will end up with states such as Greece, for example. The Senator suggests the root of our problems lies in massive cheap capital transfers into the State. It is remarkable that the cheapness of an industry's inputs can be blamed for its problems.

Professor Philip Lane of Trinity College has pointed out that some countries, notably Sweden and Chile, which experienced a banking crisis in the 1990s and introduced fiscal rules that ensured fiscal discipline, have escaped the worse effects of the current recession. It is likely that if we had had similar fiscal rules enshrined in law, we might have similarly escaped. The idea that the treaty will lead to further austerity and constrains the ability of governments to borrow misses the point. It does no such thing. What it requires is that budgets be balanced, which is no bad thing. There is latitude to allow for spending on capital projects which require borrowing, as long as it is clearly outlined how the borrowing costs will be met. There is no question about this and to suggest otherwise is to demonstrate a lack of understanding about what the treaty contains.

Working out and defining what constitutes a structural deficit gives rise to considerable uncertainty and this has been pointed to as a major flaw in the treaty. However, the UK Office for Budget Responsibility has managed to outline what a structural deficit might be in general and workable terms. It is interesting that the UK Government is working within the parameters of its own fiscal rules which are enshrined in law and closely mirror the terms contained in the treaty we are discussing. It is also interesting to note that some of the opponents of the treaty in Ireland have not raised concerns about the workings of similar rules in the northern part of this island.

It is difficult to understand how any commentator could fail to understand paragraph 25 of the treaty which states access to the ESM is contingent on ratifying the treaty. It might be based on a genuine misguided interpretation of the text, a misunderstanding of the words or it might be wishful thinking. It is unlikely that we will require access to the ESM as we intend to be back in the financial markets by the middle of next year, but why would we close off the option? It makes no sense. We are again hearing the nonsensical argument that we can act unilaterally and without consequence.

I will have a great deal more to say about the treaty and we will have an opportunity to do so again in the House. I ask those in favour of the treaty and those who oppose it to, at least, be honest. If opponents of the treaty call on people to reject it, they should, at least, acknowledge that there are consequences to that decision.