John Gilroy (Labour)

I welcome this opportunity to speak on the fiscal treaty referendum which will be the most important vote for our country in a generation. There are two main reasons we should consider voting "Yes" and be actively canvassing for it. The first is to demonstrate our commitment to the European project, which promotes certainty and stability across the eurozone. We will benefit from that. The second reason for voting "Yes" is for access to funding. However, as the date for the referendum draws ever closer, the "No" side is still persisting with an argument that has nothing to do with the substantive contents of the stability treaty. I was going to ask those proposing a "No" vote where they intend to get the money from. I would have asked them if they were here. It is disappointing that the only party opposing the treaty cannot even find time to attend the House for this debate.

If we cannot return to the financial markets next year and we shut ourselves out of the ESM due to a "No" vote, where will we get the money for essential services? We should be serious about this matter. The "No" side says that we will not shut ourselves out of the ESM if we vote against the treaty, or they say that if we shut ourselves out, our European partners will give us the money. If our European partners do not give us the money, the "No" side says we will get it from the EFSF or the IMF. If we cannot get it that way, they say we will get it by vetoing the treaty establishing the ESM. Failing that, they say we can veto the treaty amending Article 136. If we cannot do that, they say somebody somewhere will give us money. That seems to be the gist of their argument but it is a recipe for uncertainty. In recent days, we have seen what uncertainty has done for the good people of Greece.

I anticipate that the "No" side will claim we are scaremongering by merely drawing attention to these facts. However, if we take a closer look at what is happening in Greece, our fears may be confirmed. Greece is following a policy of austerity which is similar to, although stricter than, ours. The recent elections in Greece saw the hard-left parties emerge to hold the balance of power. The leader of the Syriza party, Alexis Tsipras, refused to enter government despite the popularity of his party, which is based on an anti-austerity platform. According to Mr. Tsipras:

The EU, led by Berlin, is engaging in a high stakes game of bluff. The threat to accept more austerity, or exit the eurozone, would never happen because the eurozone itself has too much to lose.

If we think that argument sounds familiar, of course it does because that is what our own anti-treaty people are saying. However, when Mr. Tsipras had the opportunity to enter government and implement the policies on which he was elected, he failed to do so. It clearly sounds as if he did not have confidence in his own argument, and the same could be said for the "No" side here.

This type of talk is good at getting votes, of course, as the hard left has seen in Greece. It has been calculated by some politicians to be good for increasing party support here as well, as we have seen in recent polls. Those with a simple, popular argument are gaining party political support and I suspect that this is calculated in the actions of those proposing a "No" vote.

On the night of 28 September 2008, Sinn Féin backed the bank guarantee. They did so even though I think they did not understand what they were doing. It did not have a consequence for them because the other parties also backed it, apart from the Labour Party. Sinn Féin was lost in the numbers then and it is the same this time. The leader of that party appeared before the fiscal compact committee a few weeks ago and demonstrated a clear lack of understanding of the economics involved. I am sorry to say that because I had several questions to put to him, but he failed on every occasion to give me any sort of credible answer. When he was pushed on particular points he descended into personal attacks on his questioners. It was a disappointing performance by him. It makes me wonder if he was not properly briefed before attending the meeting, or perhaps was not convinced by his own arguments. Perhaps he did not know enough about the subject.

On this occasion, there is a real consequence for those who are proposing a "No" vote. Populist, political posturing in Greece has led to uncertainty which has seen a run on the Greek banks. Some €3 billion has been withdrawn from Greek banks in the ten days since the elections. Uncertainty leads to chaos as the Greek people are now experiencing. We can see how delicately the euro economy is balanced. Uncertainty in Greece has seen Irish bond spreads widening. It has seen some private capital being withdrawn from Spain. In addition there has been speculation about Greece leaving the eurozone and imposing controls on how much can be withdrawn from banks. This is what uncertainty does and it is not a positive thing.

If we vote "No" would we undermine that fragile certainty that is slowly and painfully returning to our own economy? It is everyone's right to advocate a "No" vote, but in so doing one has a responsibility to spell out the consequences for those being encouraged to vote "No". A "No" vote on its own will not lead to a run on the Irish banks and neither would it cause us to leave the eurozone. However, it will shut us off from the ESM and other funding sources if we cannot return to the markets next year. It will also demonstrate that Ireland wishes to remain in some sort of semi-detached relationship with Europe where uncertainty is embedded in our economy.

Looking at it in the wider context, which is affecting Greece, Spain and perhaps Portugal also, it will create conditions that will put our hard-won gains since the last election at risk. If we are prepared to risk this, then we should vote "No", but if people are not prepared to take the risk, the obvious thing is to vote "Yes". If parties wished to increase the share of their vote, they could encourage people to vote "No". If one thinks one's party is more important than one's country, perhaps one should encourage people to vote "No". If one does not understand the situation, and I think some commentators do not understand it, one should pause and take time to sit down with one's policy people to familiarise oneself with the facts. If people refuse to acknowledge the economic and political complexities involved, they are being dishonest. If one wants to encourage people to vote "No", one should not link the treaty with extraneous issues such as water charges, the household charge or bank debt. It is plain dishonest to do so. The treaty should be debated on its merits in the context of the consequences of voting "No".

On what Senator Leyden said about the access to IMF funding, when countries join up to the IMF they are allocated a quota relative to the size of their economy. A country is allowed to borrow against that quota up to 200%, 300% in extreme circumstances and 600% cumulatively over the course of the borrowing. Having borrowed €16 billion, Ireland's share of the quota stands at 1,300%. If we are to rely on the IMF for all of our funding, which would be €64 billion, we would be borrowing 5,000% against our IMF quota. The IMF is funded by countries such as Canada, even ourselves, America and Britain and also by African, South American and some Third World countries. It is preposterous, dishonest and outlandish for anybody to recommend that countries in the Third World should bail out Ireland. That is dishonest. It has nothing to do with left wing or any type of politics and more to do with "la la" politics.

An €11 billion bond is due to paid in February 2014. If we do not have access to the EU markets and the ESM, where will we find €11 billion on top of the €7 billion or €8 billion that we will have to borrow to run the country at that time? We will have to close the fiscal debt in public finances in one year. We know the difficulty that was created when we tried to close the debt by €3.6 billion this year and we can imagine difficulty it would create if we were try to close a debt by €17 billion next year.