Paschal Mooney (Fianna Fail)

If I was to allow my heart to rule my head in this debate, I would agree with what Senator Cullinane outlined. He has made a coherent, cogent argument as to why the treaty should be rejected by the people. However, he made a reference to living in the real world and perhaps it would be instructive to reflect on what is happening in the real world. I hope the Minister will respond to this comment.

Political upheaval is under way in France with the expected demise of President Sarkozy and that has implications for the eurozone and for relations between France and Germany if Monsieur Hollande is elected, as he has indicated he will renegotiate the treaty and add a growth element to it. There was shock news yesterday out of the Netherlands, one of few countries with a triple A rating. Its Government has collapsed because it could not agree a budgetary proposals which, by comparison to what has been imposed on the programme countries, pales into insignificance, as they comprise a relatively small amount. A wind of change is sweeping across Europe which is reflected in the first round of voting in France with the concerted rise of the far right vote and in the collapse of the Dutch Government, which is also centre right. The message seems to be that people are beginning to increasingly question the concept of austerity and how long it will last.

From an Irish perspective, the real world is that as a result of the upheaval yesterday, Irish bond yields, which were on a downward trajectory over the past number of months because of the work the Government was engaged in and because of the manner in which it was selling Ireland, increased. Investors who have money dictate bond yields and, ultimately, whether Ireland can return to the bond markets and borrow money at a reasonable interest rate that will not put further obligations on the Government, the very thing Senator Cullinane and his party constantly tell us we should avoid.

While the world will not come to an end if we reject the treaty, we will send a clear message to the very people we hope to go back to for money in two years' time. They will say, "You are not even prepared to get your own house in order. You are not prepared to pay back the money you have borrowed so why should we give you anymore?" David Begg is right on two fronts. He is right about his attitude towards the treaty but he is equally right that it is effectively a gun to our heads in that if the Irish people fail to ratify the treaty, it could close off all the opportunities we have to access further funding that we will need.

I stated earlier on the Order of Business that I have no wish to rewrite history. We can feel grievously wronged because we played by the rules until the bank crash in 2008 while France and Germany were not adhering to the Stability and Growth Pact agreed under the terms of the Maastricht treaty. Ireland continually returned budget surpluses. In 2006, the much maligned former Taoiseach, Brian Cowen, was Minister for Finance and he generated a budget surplus of €3 billion, €2 billion of which was set aside to reduce the national debt with the remaining €1 billion invested in the capital programme. That has been forgotten in the tsunami of insults and attacks thrown at the Fianna Fáil Administration for being reckless.

Since 2008, when the bank crash happened, we have been saddled with bank debt, as have other countries. It is instructive, and perhaps the Minister will respond to this, that economists now suggest that because of the fear surrounding Spain and its increasingly unsustainable debt, Europe will have to look at the sustainability of bank debt in the medium and long term. Large economies such as Spain could have a greater trickledown effect if they go under and have to enter a bailout programme than tiny Ireland. A debate is beginning as to whether the ECB should step in or whether eurozone governments should examine the possibility of reducing the unsustainable Spanish bank debt. Spain is in the same position as Ireland, except on a much larger scale.

If that is the case, it would be sensible and selfish to send the message that the people will vote for this treaty on the basis that we agree that we need to get our house in order. We cannot continue to sustain massive deficits and I am glad Senator Cullinane and his party agree that the gap should be bridged. He agrees that we cannot sustain a €15 billion budgetary deficit annually. Neither he nor Sinn Féin has indicated at any time where they would get the €15 billion but that is for another day. He has at least conceded that this is unsustainable.

We are getting our house in order. There is a dispute over the EUROSTAT figures that emerged in the media over the past day or two but it seems to me that we are ahead of target at 9.6% of GDP and moving towards an end of year total of a little over 8%, which will eventually reach 3% by 2014. It is not as if we have stopped progressing. We are moving towards balancing our books.

When one weighs all of that up, it is not just about today. It is about what will happen in two years and when we achieve a balancing of the books, we can look to return to the bond markets for money. Senator Cullinane's party says there are times when governments can borrow into deficit for investment purposes. If we fail to pass the treaty, the message that will send could be hugely damaging to the country. David Begg is correct that the unions will be pulled kicking and screaming into accepting that the treaty has to pass but he is a realist. Who is living in the real world? The treaty is no panacea and the wind of change blowing across Europe suggests the treaty and its implications may be revisited. We are staring into a hole of uncertainty because economic circumstances are ever changing.

Our reality is that we are moving in the right direction. The Government hopes to get into the bond markets within the next two years and we will be close to a balanced budget at that point. We will then be able to argue the case that the bank debt is unsustainable and I agree with Senator Cullinane and many others about this. We cannot allow this albatross to sit on the shoulders of future generations. It has to be addressed and I believe it will be.

Let us take tiny steps first and cross every bridge as we come to it. The fiscal treaty is the bridge we now face, flawed and all as it is. No detail is outlined in the treaty to address the questions raised by Senator Cullinane and others about the definition of "structural deficit" and what sanctions will be imposed if we breach the budgetary target of 3% of GDP. The reality is that we want to send a message of a strong and confident Ireland that is trying to get its house in order and balance its books to ensure the gap between income and expenditure on essential public services is bridged in order that we can convince those who have the money that we are a good bet and have not defaulted on our debts. At that point, the case to be made for tackling the unsustainable bank debt would be so strong, with the aid of what is happening in Spain, and possibly Italy, which is suffering under much larger bank debts, that the logic would be that some form of compromise and accommodation will be agreed. For my part, I believe that will be quantitative easing, a devaluation of the euro. It has been proven in other countries, when a country has control of its currency to the point where it can adjust it to take account of the economic realities, that it is a way out of the austerity to which Senator Cullinane referred. That is an argument for another day. What we are faced with is our immediate future as a country and whether we are capable of sending a message to the people on whom we will rely that the steps we are taking are difficult and painful. I am opposed to austerity. It appears to be an unending saga, worse than the longest running soap on television.