David Cullinane (Sinn Fein)

I welcome the Minister of State, Deputy Joe Costello, and the debate on the fiscal compact treaty, even if it is in the context of processing the Bill through the Houses of the Oireachtas.

On the Order of Business many Members mentioned the trade unions which have come out against the treaty. As the Minister of State knows, several trade unions have been very clear in their opposition to the treaty because they do not believe it will be good for Ireland and working people as it will enshrine austerity in law for decades to come.

The backdrop to the debate on the treaty is provided by what is happening in the economy. There are still far too many out of work and no real plans to get people back into employment. People see the domestic economy floundering. Further evidence of this was presented in a Bank of Ireland report published yesterday which stated domestic indicators remained weak, unemployment remained elevated and residential property prices did not appear to have fully stabilised. It also stated there were heightened concerns about other eurozone economies. This proves that across the European Union austerity measures are dampening economic growth and having the opposite effect of further job losses by taking money out of people's pockets. The trade unions which represent working people have sensibly come out in opposition to what they see as a bad treaty.

To be honest, the treaty does not solve the real problems in Ireland or Europe. Many social democratic parties, with which the Labour Party is affiliated, and the European Trade Union Confederation have come out to state "No" to a treaty which will not work. The ink was barely dry on the treaty when the conservative right-wing Spanish Prime Minister opted out of the fiscal adjustments which his country was asked to make. We see the same happening in Holland where there are tensions between coalition parties in government because they cannot make the tough fiscal decisions because of the effect they will have on the Dutch economy. Looking back at all of the budgets since 2008, we know we are no closer to being out of the economic mess than we were in 2008. While Jack O'Connor, general president of SIPTU, has not come out against the treaty, he did say the national executive council of SIPTU had decided that if the Government implemented a jobs stimulus plan, it would be prepared to recommend in favour of the treaty in the referendum. Otherwise it cannot endorse it. He has made the same point as Sinn Féin.

The big issue in Europe is the lack of investment and growth. The treaty will lock us into decades of more austerity and not deal with the real problems. It will implement existing fiscal rules, already in place since the Maastricht treaty was agreed to, and the debt brake rule which asks member states to reduce their debt-GDP ratio to 60%. Ireland's current debt to GDP ratio is 105%, with the Government telling us it will be 120% by 2015. It must be remembered what that debt is. Some of it is money borrowed in the sovereign bond markets by the previous Government. Some of it is what we are borrowing because of the big black hole in the public finances. However, some of it is also money used to recapitalise the banks and bail out bondholders. We are being asked to pay back this debt faster, with no write-down. After 2016, what will a reduction in the debt-GDP ratio from 120% to 60% mean? It will mean more tough budgets and austerity.

There are also the fiscal discipline deficit rules, with the existing 3% Stability and Growth Pact rule and the structural deficit target of 0.5%. In a useful briefing document from the Oireachtas Library and Research Service I note many economists differ on what the structural deficit is and how it is to be measured.