Lorraine Higgins (Labour)

I welcome the Minister of State to the Chamber and congratulate him on his recent appointment as Minister of State at the Department of Foreign Affairs and Trade and wish him the very best in his portfolio.

I welcome the opportunity to speak today on the Thirtieth Amendment of the Constitution (Treaty on Stability, Coordination and Governance in the Economic and Monetary Union) Bill 2012. This is the most important treaty ever to come before the Irish people for consideration. It is the legislative framework that is designed to protect the citizens of this State from reckless spending and its essence is based on sound budgetary principles which will ensure intergenerational transparency and accountability. In effect, governments will be precluded from engaging in the type of reckless spending policies pursued by Ireland's previous Administration in the noughties.

On 31 May 2012, the referendum to allow the people of Ireland decide whether we should ratify this treaty will be held. Prior to this, citizens will need the full facts on what is in the treaty and the implications of ratification for Ireland. In the coming weeks, information from the Referendum Commission will arrive to every house. Members of the Labour Party, Fine Gael and Fianna Fáil will also canvass on doorsteps advocating a "Yes" vote. Furthermore, bodies such as the Irish Farmers Association will urge a "Yes" vote to ensure the integrity of the European project and Ireland's place within it. In the referendum, the people of Ireland will be asked to vote "Yes" or "No" to adding the following to Article 29.4 of the Constitution.

100 The State may ratify the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union done at Brussels on 2nd day of March 2012. No provision of this Constitution invalidates laws enacted, acts done or measures adopted by the State that are necessitated by the obligations of the State under that Treaty or prevents laws enacted, acts done or measures adopted by bodies competent under that Treaty from having the force of the law in this State.

Should the people of Ireland agree, the Government will ratify the treaty and will, subsequently, introduce legislation to give effect to it.

While the contents of this treaty have come under attack from various quarters, such as some of the Opposition Members of the Houses of the Oireachtas and some trade unions, I wish to be clear that this is not an austerity treaty, but a treaty designed to end austerity. We must be mindful of the fact that at the very core of its title is the word "stability". This must resonate with each and every one of us who have craved this in previous politically and financially insecure times. The problem with the recessionary times in which we live is that during Celtic tiger Ireland, no savings were made for a rainy day. Budgets were giveaways, banks were largely unregulated and consequently ran amok. The rest is part of our unfortunate recent history.

As a small open economy, it is essential that we have such plans for stability in place. Stability is about us adhering to a Keynesian economic framework, whereby we strike a delicate balance between taxation and distribution during the good times so that we have enough of a cushion, should anything untoward happen to our economy. Not one of the provisions of this treaty should cause any concern for Ireland. To alleviate any reservations in this regard, it is crucial to point out that the terms under which we are currently governed under the EU-IMF programme go considerably further than what is envisaged in this treaty. What this treaty will do is ensure financial and economic accountability for each and every member state so that monikers and acronyms like PIGS will be a relic of a bygone era. Such an approach will bring credibility and confidence to the euro and stability to the financial markets.

What some Opposition commentators fail to grasp is that without such stability within the member zone, we will have difficulty endearing ourselves to multinational companies. We only have to look at Ireland's record in this regard. Eight of the top ten pharmaceutical companies in the world are located here, not to mention multinational giants like PayPal, Facebook, Twitter, Google and eBay. These are all household names. Comfortingly, and despite our economic difficulties, in 2009 we attracted €9.8 billion worth of foreign direct investment to our shores. In 2010, 63 multinationals set up or expanded here, and this figure reached over 140 in 2011. This is no fluke. We are well placed geographically, we are English speaking with a highly educated workforce, and we are becoming more price competitive. More crucially, we are a member of the EU. We are well placed as a country to avail of such investment opportunities, so why then would we usurp this upward trend when we need it most?

Under the treaty, we will be compelled to ensure that our Government deficit will not exceed 3% of GDP, our structural deficit will not exceed 0.5% of GDP and our ratio of debt to GDP will not exceed 60% of GDP. It is in the national interest that we affect such debt reduction and bring budget deficits under controlled limits. These figures will be scrutinised by the Department of Finance, the Commission and the Council, so that we have full accountability of our financial movements. However, there is some scope for movement in these figures in the event of exceptional circumstances, whereby the State can deviate from them. Irrespective of the outcome of the referendum, we will be compelled to abide by the aforementioned figures, by virtue of the Stability and Growth Pact 2011, as all that is required is for the agreement of 12 of the 17 member countries to ratify it. The fundamental difference a "Yes" vote will yield is that our Government will be able to choose how these targets are reached, thereby helping us regain some degree of our fiscal sovereignty. This will be but one step in the right direction. Moreover, the passing of this treaty will ensure relative parity of borrowing between the various member states, such that the actions of any one country within the monetary union cannot adversely impact on the interest rate with which other eurozone countries can borrow money on the international financial markets. Furthermore, it will ensure that we will not have to face the indignation of paying over 8% on the bond markets or seeing our bonds being termed junk status. The massive disruption experienced by the financial markets in recent times, which led to Ireland having to rely on the EU and the IMF to provide us with access to funding so we could ensure our schools, hospitals and other public services could remain operational and that our social payments could be honoured, will be a thing of the past.

As a consequence of our citizens voting "Yes", we will have access to the European Stability Mechanism, which is a permanent rescue funding programme to succeed the temporary European Financial Stability Facility and European Financial Stabilisation Mechanism in the 17 member zone. Some Members of the Opposition in these Houses consider it blackmail that if we fail to ratify the stability treaty, we will consequently be precluded from accessing the European Stability Mechanism. I would like to say to them that we do not live in a monetary utopia. It would be great if this State could continue to receive funds without being obliged to deal with our fiscal problems, which is one of the provisions of this treaty. We must be mindful that there is no bottomless pit in Europe from which we can continue filling our black hole. In any case, why would we, as a proud nation, want to continue to suffer the ignominy and continued financial envelopes from the EU and from the IMF? Where is the Opposition's national pride? We need to be part of this to ensure our long-term financial security.

Restoring stability to the euro is a critical step in removing ourselves from our current predicament. The treaty will play a crucial part in realising that objective, such that we need to pass this referendum for stability. It is only through such determined action that we will get back on track. We are on the road to recovery, but I acknowledge that there are difficult times ahead for many thousands of families in Ireland. I urge those people not to make their decisions on the household charge, septic tanks or on this Government. All of these issues are separate to that of the economic and fiscal well-being of this country. We need to pass this referendum to aid our recovery and provide certainty to our international investors and consumers. A "Yes" vote will signify that we are serious about our recovery, that we are serious about our fiscal and economic independence, and will help us build political capital within the European Union. Let me re-emphasise this. A vote for the treaty will be a vote for economic stability and economic recovery. Irrespective of that, the train is leaving the station and Ireland must be on it. A "Yes" vote is a vote for a better future and therefore, I commend this Bill to the House.