John Gilroy (Labour)

I welcome the Minister of State. The recent referendum campaign offered us a good opportunity to have a robust debate about the ESM and, at times, it seemed the treaty we were debating was the ESM treaty as opposed to the fiscal stability treaty. We should not rehash what was said at that time but it is sufficient and important to note there was much misinformation circulated. I hope the sovereign voice of the Irish people will put an end to this type of politicking.

I was not sure at the time and am not sure now how anybody could have proposed a position that would see us turning our back on a fund we might need if we cannot return to the markets next year. In the next couple of months, when the NTMA floats three-month money, we will determine whether we will be successful and see how the markets react. If the transaction is successful, we will have an indication as to how the markets will view us next year when there is a more substantial auction of Irish debt. I expect we will be successful and that this will facilitate a return to the markets and, consequently, a return to our economic sovereignty, which was given away so casually and carelessly through the policies of the previous Government. This will be a massive step in our gaining control of our economic sovereignty.

We will be successful in our return to the markets and will not require the assistance of the ESM, but access to the ESM will act as a fallback position in our negotiations. Can one imagine the position, in the approach to 2014, if we did not achieve a return to the markets or pass this legislation, thereby shutting ourselves out of the ESM? In January 2014, a sovereign bond worth €11 billion is due for repayment. I refer to the so-called funding cliff. To this, we can add perhaps €8 billion or €9 billion in borrowings to fund the gap in the public finances.

If we had no access to the ESM, we would have two choices, the first of which would be to return to the market at punitive, unsustainable rates that would risk a return to pre-2008 figures, thereby devastating the economy absolutely and the slow and painful progress made to date. The other option would be to find the money among the moneys available for current expenditure. We can see the difficulties facing us this year as we try to save €3.6 billion. There would be a social catastrophe if we had to find a figure a multiple of that sum.

Even if the opponents of the ESM could convince me that there is another funding route available, we should still pass this Bill and play our part as full partners in the EU project. People stated during the course of the treaty debate that the IMF would fund us. This is contested. As we know, we have already borrowed up to 1,200% of our IMF quota. Normal conditions require that IMF funding be no more than 300%. Consider the view that the IMF, which relies for funding on members, including those countries which are considered to be part of the Third World, would come to our rescue and offer us up to 5,000% of our quota. Suggesting this is a viable alternative in the absence of passing this Bill is certainly to misunderstand the functioning of the IMF and, perhaps, to delude oneself deliberately.

It is stated that for the ESM to be established, there is a requirement to amend Article 136 of the TFEU. This could well be so but there is also a school of thought that the ESM is established outside the architecture of European law, which would require that the European courts would not be the final arbitrators at all. The establishment of the ESM by way of an international treaty could come under the Vienna Convention on the Law of Treaties. Therefore, the argument about Article 136 is uncertain, to say the least.

I have heard strange arguments as to why we should not pass this Bill or sign up to the ESM. Some ask whether we would not be better off keeping our money rather than putting it at risk and whether it would be best to spend it on ourselves. They ask why should we give money to Greece, Spain, Portugal Cyprus or any other country. Their talk seems strangely similar to that which I hear from the more bellicose or belligerent German commentators, who are making exactly same case for not funding Ireland. That is a little ironic.

On Committee Stage, I will have a few questions for the Minister of State, particularly on the stepping-out mechanism found in the EFSF. In regard to Article 9(4), there may be some flexibility. Tomorrow, we will hear some of the Minister of State's comments on this. It is important that we pass this Bill. It is vital to our economic well-being and recovery. I look forward to discussing it further on Committee Stage.