Ivana Bacik (Independent)

I welcome the opportunity to contribute to this timely debate, coming as it does two weeks to the day since the referendum on the stability treaty was passed on 31 May. This is an appropriate time for reflection on the consequences of the referendum and for a prognosis on what to do next. Listening to Senator Barrett, I am conscious that even in this two week period, dramatic developments have taken place across the eurozone, specifically the recent events in Spain, and we also have the prospect of similar outcomes for Italy and Cyprus. These developments remind us of the importance of trying to shore up the eurozone and ensuring we have a common set of financial or fiscal targets. Of greater importance is the need to ensure we are bound into an agreement that allows us, if necessary, to access the European Stability Mechanism on communally agreed terms. That is one of the major strengths of the stability treaty.

Like many Senators, I did a good deal of door to door canvassing in the weeks preceding the referendum on the treaty, during which I got a sense of the frustration and anger many people are feeling. I certainly encountered it in Dublin South-East where I was canvassing. What ultimately won through was an almost frustrated acceptance that the treaty was the best option available. Nobody, including those who were canvassing for the treaty, suggested it would be some sort of panacea or would provide the solution to our economic troubles or the recession. The argument we made, the one that won through most powerfully, was that the treaty was an important step and a piece in the jigsaw as we seek to ensure the stability of the eurozone and thus the stability and prospect of recovery for the Irish economy. As others noted, the result was a very decisive "Yes" vote of 60% against a "No" vote of 40%. Many of us believed in the final days of the campaign that the outcome would be much closer and it was a relief to those of us on the "Yes" side that the referendum was passed by such a decisive majority. What the campaign taught all of us, on both sides, was that people require some sense of a positive outlook. The concern and frustration arising from the effects of austerity can be offset if people believe the prospects for recovery are good, there is a way forward and they can see a glimmer of hope.

The European Commission's forecasts for the economy are positive and Ireland is on target to meet the 8.6% deficit target for 2012 and reduce the deficit to below 3% by 2015. The forecasts show a pathway out of our current difficulties towards economic recovery and the prospects for reaching our targets are good. As I stated, however, gloomy forecasts from elsewhere in the eurozone present a problem for us given our strong reliance on exports. The export sector is driving growth and recovery. Our difficulty lies in trying to restore domestic confidence. We see the loss of confidence in job losses in the retail sector and other parts of the domestic economy. To get people spending again we must create confidence among Irish consumers. I share President Michael D. Higgins's dislike of the term "consumer" and I much prefer the far more inclusive term "citizens". I use the former deliberately because the difficulty we are experiencing is a lack of spending in the economy. This is presenting a serious problem for the retail sector and other businesses that are experiencing the knock-on effects. In light of the necessity to build domestic confidence, comments such as the suggestion made by the Minister for Transport, Tourism and Sport, Deputy Varadkar, that there may be compulsory redundancies in the public sector are unhelpful. Such statements can undermine confidence among public servants who have already experienced significant cuts to their wages and are fearful of further cuts in future. It is important that we maintain confidence among those who are still capable of spending in the economy.

The Minister for Social Protection, Deputy Burton, has stated on a number of occasions that the social welfare budget should be seen as a massive stimulus in the economy. The payments people receive stimulate local economies because such a large part of them are spent in the local community. We need to build on this idea of social expenditure as a stimulus.

To be a little more positive about the European context, the victory of François Hollande and his socialist party in recent elections in France has brought about an increased emphasis on the need to introduce stimulus and growth policies alongside the fiscal targets that have been set in the stability treaty. Ireland strongly supports President Hollande's plans to generate a stronger growth package in the European Union. We need to push forward on this matter because it is a tangible means of enhancing confidence in our prospects for recovery. We are in good shape for going back to the markets at the end of 2013, provided we can restore domestic confidence and can keep on the steady path to recovery. The passing of the referendum on the stability treaty has been an important step on that journey for us. We need to keep on a steady path and to ensure that the actions we take as legislators and the policies we adopt are designed to ensure the restoration and maintenance of confidence so that we remain on the path to recovery.

These are the comments that occur to me in reflecting two weeks after the passing of the referendum by such a decisive majority. Nobody suggests the referendum is a solution or that it marks the end of anything. Rather, it is the beginning of the next stage of the journey towards the economic recovery on which we have now embarked. I know that everyone in the House is hopeful of seeing that happen.