Denis O'Donovan (Fianna Fail)
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I welcome the Minister of State at the Department of Foreign Affairs and Trade, Deputy Lucinda Creighton, to address the Seanad on recent developments in the eurozone and the European Council Summit. Spokespeople may speak for eight minutes and other speakers for five minutes, when the Minister of State has concluded.

Lucinda Creighton (Dublin South East, Fine Gael)
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I thank Senators for this invitation to come and have this morning's discussion. As always, I relish the opportunity to engage with the upper House. I thank the Seanad for giving me the opportunity to have this important debate on the outcome of last week's European Council meeting in Brussels. I particularly appreciate the fact that we now have an opportunity to discuss developments in the Seanad. It is normal to do so in the Dáil but this increase in the level of scrutiny and engagement with European matters in the Seanad is an important initiative. I am very pleased with this new development.

I accompanied the Taoiseach to the European Council meeting on Thursday and Friday of last week at which significant political agreement was reached, particularly on the means of protecting our common currency and restoring stability to the euro area.

Rónán Mullen (Independent)
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I apologise for interrupting the Minister of State. Is it possible to have a copy of her speech?

Lucinda Creighton (Dublin South East, Fine Gael)
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I have no idea. My office would probably be able to furnish a copy to the Senator. I have one humble copy of the speech for myself. I do not come with an entourage of advisers and civil servants.

Rónán Mullen (Independent)
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We look forward to the day when the Minister of State does.

Lucinda Creighton (Dublin South East, Fine Gael)
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I thank Senator Mullen.

The European Council also addressed a range of other issues including the need for a complementary focus in Europe on the speedy implementation of measures which will boost growth and jobs; follow-up on the issue of energy, including a review of progress made on delivering the safety stress tests undertaken at nuclear installations across Europe during the course of this year; in the margins of the European Council, Croatia's accession treaty to the Union was signed by leaders, including by the Taoiseach on behalf of Ireland; and a comprehensive set of conclusions were also adopted by the European Council on a package of measures related to the future enlargement of the Union. Leaders also assessed recent developments in Iran, Syria and Afghanistan and concluded by taking stock of progress made so far with the preparatory work on the European Union's next Multi-annual Financial Framework, the EU's budget for the period 2014-20. I will return to these issues later in my statement.

Without doubt and entirely appropriately, most of the energy and oxygen at last week's European Council meeting was consumed by and directed towards issues related to the euro currency. Addressing the severe challenges facing the euro area is what was required of leaders last week and that is what European Heads of State and Government delivered.

The political agreement reached by European leaders last week is to be welcomed. It represents a step in the right direction and maps out, for all concerned, a credible means for the euro area to move forward with stability.

Prior to last week's meeting, other members of the Government and I highlighted consistently that European leaders needed to strengthen the short term crisis management tools available to Europe and particularly the euro area, while also agreeing to a series which will fortify economic union. In other words, we needed to respond to the urgent threats, while also laying out clearly the way forward beyond the immediate.

That is largely what transpired last Friday. The outcome was a good one for Ireland and for the future stability of our shared currency and it should be welcomed by this House.

Last week's European Council began with a dinner meeting on the Thursday evening which ran late into the night, or indeed into the early morning. The President of the European Council, Herman Van Rompuy, presented his interim report, which euro area leaders had requested of him at their meeting in October, on possible steps to strengthen European economic union. President Van Rompuy's report was the product of his close consultations with each EU member state, including Ireland, and with the President of the European Commission and of the eurogroup. The Government considered that his proposals struck a broadly acceptable balance. This view was shared by many EU partners and they formed the basis of the substance of the agreement eventually reached. The agreement reached concerning the euro area covers two broad aspects: first, the development of stabilisation tools, or firewalls, to address the immediate challenges; and, second, agreement on a new fiscal compact which will strengthen budgetary rules and economic policy co-ordination. Looking first to what was done to address the immediate crisis, important steps were taken to bolster the euro area's stabilisation tools or firewalls. This is part of a programme of immediate action to respond to the considerable current pressures in the markets. The creation of credible and robust firewalls to address spillover effects from one member state to another were a top priority for Ireland in the run up to and at last week's meeting. The outcome is welcome from an Irish perspective.

Leaders agreed to bring forward the entry into force of the European Stability Mechanism, ESM, the permanent successor to the European Financial Stability Facility, EFSF, with the objective to have it enter into force in July 2012, a year earlier than anticipated. The early operation of the ESM is most welcome, as it will contribute to instilling credibility, given its permanent nature. It was agreed that the EFSF should remain active until mid-2013, as previously planned, and that it will continue to ensure the financing of on-going programmes as needed.

Critically from Ireland's view point, euro area leaders agreed that the requirement for private sector involvement, PSI, should be removed from the ESM treaty and that we would strictly adhere to well established IMF principles and practices in this regard. The removal of this PSI provision in the draft ESM treaty has been an objective of the Government for some months now. We have vigorously argued that this needed to be done. The Taoiseach raised this specific issue at his meeting with Chancellor Merkel and in his contacts ahead of the European Council with President Van Rompuy and Prime Minister Cameron. PSI was acting as a serious impediment to those member states, including Ireland, who were seeking to re-enter financial markets in the future. We are gratified that our partners listened carefully and responded appropriately.

It was agreed also that the adequacy of the overall ceiling of the EFSF and ESM, of €500 billion, would be reassessed in March 2012 and that partners stand ready to accelerate payments of capital into the ESM if this is needed to maintain the required ratio between paid-in capital and loans, and to ensure a combined effective lending capacity of €500 billion. In order to further underpin our firewalls, member states will consider providing up to €200 billion in the form of bilateral loans to the IMF to ensure that it has adequate resources to deal with the crisis. This will not impact directly on Ireland, as we are in an EU-IMF programme and hence are not expected to contribute. It is our hope also that international partners, beyond Europe, will make parallel contributions to the IMF.

The second substantive element of the euro area package agreed last week concerned the strengthening of European economic policy co-ordination, a new fiscal compact. Leaders agreed the new compact, which in essence is a set of reinforced budgetary rules for countries within the euro area. The compact has a number of specific elements. Heads of State and Government agreed that government budgets should be balanced or in surplus. This is an acknowledgement that, as a rule, broadly speaking, each member state will need to live within its means. Given the situation we are all now in, that is a reasonable proposition. The new fiscal rule provides that a member state's annual structural deficit should not, as a rule, exceed 0.5% of nominal GDP. This is an ambitious rule, but it was important to signal clearly that Europe is deadly serious on this issue. Of course, we will now work through the country specific implications for Ireland, once negotiations are under way.

As yet, last week's agreement is a political one. Now detailed technical and legal considerations must be carefully teased out by experts before any legal text is adopted. This critical process, in which Ireland will be fully and actively engaged with, will get under way in Brussels as early as next week. To underline the absolute earnestness of all member states concerned, this commitment will be carried over into national law "at Constitutional or equivalent level" and the European Court of Justice will have a role in assessing that this is done correctly. We are now examining this requirement carefully, particularly in light of work which is already under way on the fiscal responsibility Bill.

Euro area leaders agreed that euro area member states in breach under the existing rules of the excessive deficit procedure will be required to work with the Commission and the Council in an economic partnership programme detailing the structural reforms intended to get back on track in a sustainable way. The implementation of this programme and annual budgetary plans will be monitored by the Commission and the Council. Leaders also agreed that the rules for the excessive deficit procedure should be made tighter for member states within the euro area. Specifically, there will be automatic consequences for a member state that exceeds the 3% ceiling, unless a majority in the Council decides not to adopt a Commission recommendation in this regard.

On 23 November last, the European Commission brought forward two significant new proposals on the monitoring and assessment of draft budgetary plans and on strengthening economic and budgetary surveillance of member states experiencing or threatened with serious difficulties. In response, leaders last week called on the Council and European Parliament to rapidly examine these proposals, with a view to their entry into force for the next budgetary cycle. Under this new legal framework, the Commission will, in particular, examine the key parameters of draft budgetary plans and, if necessary, adopt an opinion on them. Where a plan is seriously non-compliant with the requirements under the Stability and Growth Pact, the Commission will be able to request a revised one. Given the clear interdependence of European member states, particularly those within the euro area, we should have nothing to fear from these proposals. In fact, we stand to benefit from them. Ireland is already fulfilling all its obligations under its programme in full and on time. It will be in our national interest to ensure that all are operating within the rules agreed. As we all know, that is not what has happened over the past ten years.

For the longer term, leaders agreed that we should continue to work on how to further deepen fiscal integration so as to better reflect our degree of interdependence. President Van Rompuy has been asked to prepare a further report on this issue, in conjunction with the Presidents of the Commission and the euro group, for March 2012. These new arrangements will mean more oversight of what member states are doing with their budgets, such as sharing budgetary plans in advance. As the House is aware, preparations are well under way for a fiscal responsibility law that will ensure that the blunders of the past cannot be repeated in the future. Similar arrangements in other member states should be to our advantage and should be welcomed. It is clear that as we proceed with each of these important steps, we must do so on the basis of sound and clear analysis. The fundamental requirement for democratic legitimacy and political accountability must not be lost at any stage. I have no doubt but that the members of this House will agree with me on that.

Having reached agreement on the substance of what was involved, last week's European Council turned its attention to the steps necessary to put the substance in place, in other words the form the agreement would take. All leaders agreed that there was considerable scope for making progress through secondary legislation, where this was possible within the framework of the existing treaties, while it became clear that some of the agreed steps would require primary law. As chair of the meeting, President Van Rompuy sought to move forward on the basis of all 27 member states. That too was Ireland's strongly held preference. However, when agreement among all 27 proved elusive, we agreed to move forward by way of an international agreement which would involve all euro area member states, plus as many other member states as wish to join. A number of non-euro area partners are now consulting government partners and parliaments and it looks as though up to 26 member states will agree to participate in this new international agreement. The exception in this instance is the United Kingdom, which felt that it was not in a position to agree.

We have made no secret of the fact that we would have wished to reach agreement last week on the basis of all 27 member states. That proved not to be possible on this occasion and is a disappointment to the Government. However, it is the sovereign right of each government to determine what is in the best interests of its country. I fully respect that right. The British Prime Minister's decision at last week's meeting in no way changes the reality that the UK is and will continue to be an active and important member state of the European Union, with whom we co-operate very closely across a very wide range of policy issues. We look forward to continuing our close and fruitful co-operation with our UK colleagues in the context of our common membership of the European Union. These enduring and close ties with our nearest neighbour will continue and were reflected earlier this week in the context of the Taoiseach's contacts with Prime Minister Cameron and the Minister for Finance, Deputy Noonan's, visit to London the day before yesterday.

The United Kingdom has decided not to participate in the specific arrangements agreed at last week's meeting, but it has not in any way turned its back on the European Union. Prime Minister Cameron made that point very clearly in his address to the House of Commons earlier this week. In view of this what was achieved last week was a political agreement to proceed via the route of an international agreement. That political agreement must now be given technical and legal effect. Work involving the legal services of the Commission and the Council is already under way. We expect an initial text shortly and, on that basis, detailed engagement with member states will take place by the beginning of next week and continue throughout January.

There is great interest in the House, as there is outside, in what the adoption of this agreement will mean for Ireland and whether a referendum will be required to ratify it. However, the Taoiseach has confirmed a simple fact, that being, until we have the final legal text to consider, it will not be possible to say. At that stage, the Attorney General will wish to give the texts full and careful examination before offering her considered advice. We cannot rush or force the process. We need to proceed with appropriate care and attention. The Taoiseach has confirmed that should a referendum be required to allow Ireland to ratify the agreement, we will have one. We will look forward to putting forward a strong case on behalf of the Government.

In advance of last week's meeting, the Taoiseach wrote to and spoke with President Van Rompuy to alert him to the points the former would raise at the meeting. The Taoiseach sought the support of his colleagues in making the burden that the Irish people are carrying as a result of the steps we have taken to recapitalise our banks more manageable. Specifically, the Taoiseach asked that the facilities now available, for example, the European Financial Stability Facility, EFSF, be deployed to assist in this regard. Ireland is seeking a re-engineering of its bank-related debt, not to avoid any commitment entered into in good faith. We are meeting and will continue to meet on time and in full all of our commitments. This is not in question. The Taoiseach's colleagues gave him a receptive hearing and the issue will be taken forward via contacts between officials during the period ahead and subsequently at meetings of ECOFIN and eurozone finance Ministers.

The meeting of the European Council also addressed a number of other issues. Heads of State and Government agreed on the need for the EU to adopt measures swiftly that offer the most potential to boost growth and jobs, with particular reference to the Single Market Act, the digital single market and the reduction of the overall regulatory burden for small and medium-sized enterprises, SMEs, and micro-enterprises. Ireland has been strongly supportive of efforts in this regard. At the General Affairs Council, which I attended in advance of the European Council, Ireland and a number of other member states specifically requested a reference to these issues in the European Council's conclusions.

Among the other issues addressed was energy. Leaders took stock of progress made since they last considered this issue in February. Focus was given to completing the internal energy market, energy efficiency, developing energy infrastructure and external energy policy. Leaders also assessed the initial findings of nuclear stress tests and the progress report on the security of nuclear power plants. Final reports on both are expected by the middle of 2012.

Leaders also addressed the issue of the enlargement of the Union, arguably the EU's most successful policy to date. They endorsed conclusions that set out the prospects of opening accession negotiations with Montenegro and granting Serbia candidate status during the course of next year. On the margins of the meeting this day last week, the Croatian accession treaty was signed. Croatia will join the Union as a member state in July 2013. It is important to point out that at a time when the EU is experiencing great difficulty and the eurozone is under considerable pressure, the EU continues to present an attractive option to countries that were ravaged by civil war and widespread genocide just 20 years ago. We can be proud of having played a constructive role in enhancing democracy, human rights and the rule of law through the EU.

The Heads of State and Government also adopted conclusions on developments in Iran, Syria and Afghanistan and looked forward to negotiations on the Union's budget for the seven-year period 2014 to 2020, the so-called multi-annual financial framework. These will be carried out during the Danish Presidency.

This crisis is the greatest ever faced by the European Union. Therefore, the Union and we as members must act as never before to overcome these challenges. There is no easy way out, the choices are limited, the window of opportunity is narrow and the consequences of inaction are almost incomprehensible. I am glad that at the summits in October and December, European leaders began to act. We must maintain this progress. It will mean travelling a long and difficult road, but there is no other option. We must save our currency. It is plans A, B and C. We cannot turn back the hands of time and revert to some other fictional currency over one weekend, nor would we want to. It would be an economic disaster. The euro can and will survive, but not by happy coincidence. We need to realise this fact and, therefore, co-operate to ensure its future and, consequently, the future of the entire European project and its countless associated benefits.

I thank the House for affording me the time to address it today. I look forward to hearing the contributions of Senators and to responding to the House on the points raised.

Denis O'Donovan (Fianna Fail)
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I remind Senators that we are due to conclude at 12.25 p.m. and the Minister of State must reply. Some Members might need to share time. Unfortunately, the festive Order of Business ran a little long and the Minister of State was waiting outside. It is not her fault.

Terry Leyden (Fianna Fail)
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May I share four minutes with my colleague, Senator Walsh, to accelerate matters?

Denis O'Donovan (Fianna Fail)
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Is that agreed? Agreed.

Terry Leyden (Fianna Fail)
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I wish for as many Senators as possible to speak. I welcome the Minister of State, Deputy Creighton, to the House and wish her well in her work. I also wish her and Senator Bradford well for the Christmas season.

From working with the Minister of State on the then Joint Committee on European Scrutiny, I know she has a significant knowledge of and interest in Europe. She chaired a committee and its recommendation on the Seanad's work in terms of European scrutiny was important. She has made a good start by briefing the House on the atmosphere and details of last week's meeting, which she attended.

We have discussed this matter with the Leader, who has been innovative as well as open to ideas and suggestions on how to strengthen the House. It should not be done just because of the possibility of a referendum on a constitutional amendment next year. The Leader has been working on this matter since taking up office. Not all European legislation needs to be discussed in the House, but some political issues should. Our 60 Members have considerable experience in different fields. In time, we will get the process to work. The Leader is very much in favour of arranging such debates.

Last week's meeting of European Heads of State and Government in Brussels was the most vital in the history of the EU. Unfortunately, it was divisive and led to the unfortunate isolation of Britain's Prime Minister David Cameron, who felt forced to use his veto. A veto is always a last resort in negotiations. Speaking as the former Minister of State with responsibility for trade and marketing responsible for the negotiation of the Single European Act, SEA, the veto was never used, as we worked in harmony to create a consensus.

Britain was and is a good ally of ours in the EU. This relationship has been to our mutual benefit, as Britain is our largest trading partner and we are its fifth largest trading partner, given our population of 4.3 million people. We share crucial interests. Some form of agreement needed to be made, but leaving the door open would be preferable. I welcome today's statement to the effect that President Van Rompuy has been in contact with the British Government, which will have observer status and will send civil servants to meetings. This is a worthwhile development.

Twenty-three countries have agreed, three further countries are considering the matter and Britain has disagreed. The question of an international agreement outside the EU——

Denis O'Donovan (Fianna Fail)
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I apologise, but I must remind the Senator of his time.

Terry Leyden (Fianna Fail)
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Yesterday, we received a good and worthwhile briefing from Ms Geraldine Byrne Nason from the Minister of State's Department. Our biggest fear is the threat to financial services. We cannot jeopardise our position or put ourselves in danger that we will be in a lesser position than London for financial services. It is vital that we protect our interests, as we protect our 12.5% corporation tax rate. These are two vital issues on which we may have to use a veto but we cannot enter into any arrangements that put 37,000 jobs at risk if London has a different rate for taxes on financial transactions.

Jim Walsh (Fianna Fail)
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I thank Senator Leyden for sharing time and I welcome the Minister of State, Deputy Bradford, to the House.

Lucinda Creighton (Dublin South East, Fine Gael)
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I think we need to clarify the record.

Jim Walsh (Fianna Fail)
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Only for the fact that it is Christmas, the season of goodwill, I would be more scathing about this debate. If we look back to last Christmas, there were people alive who are no longer alive as they have committed suicide because of the economic crisis and personal pressures. The failure of the political system, domestically over the past few years and at European level, is highly regrettable. This is the 15th Council meeting since the crisis emerged and one Council meeting after another has failed to address the matter. The last meeting was the most disappointing of all. There is a new head of the ECB, a man who has experience in the international finance world in New York and elsewhere. He signalled to the markets that there was to be a resolution of the fundamental underlying fault in the structure of the euro at this Council meeting. In fact, the meeting failed to deliver and there is nothing worse than signalling an intention to do something and then failing to do it.

The efforts of the German Chancellor and the French President, putting themselves forward as providing leadership to this crisis, which is unprecedented in Europe, has shown the dearth of leadership across the Union. I spoke recently with a person the Minister of State had lunch with last week, the president of the OSCE, Petros Efthymiou. We talked about the crisis in Greece and the crisis in Ireland and he told me that the German Chancellor and the French President had put themselves forward as leaders but they do not know where they are leading. They do not have solutions.

That is not good enough and we need to face up to the fact that the concept of the euro was flawed from the start. Greece should never have been a member and it is questionable whether Italy should have been. There needed to be greater harmonisation of the economies and Ireland must question whether it wants to maintain its sovereignty or be part of a federal arrangement. The euro cannot survive unless there is total fiscal unity to accompany monetary unity. That will mean sharing much more than a set of rules and regulations. Fiscal union means much more than that but all we are getting is a list of rules to deal with the symptoms of the crisis rather than the crisis.

Within the next 12 months, Germany, France, Italy and Spain must roll over €500 billion of sovereign debt. There is no way anyone could conceivably argue that there is a possibility of doing that in the markets. The EFSF is totally inadequate and adding €200 billion to it was like putting a sticking plaster on a very serious injury. This House should say to European leaders and the Council members that we want this problem addressed. It needs far more dramatic action and initiative than we have seen. The progress they are trying to make has been put in serious doubt last night with the statement from the Czech Republic and Hungary. From what I know of the Hungarian Prime Minister, Victor Orbán, if he says something, he does not say it lightly. If there is no accord on that matter, it brings the future of the eurozone project into doubt. We are only months away from finding a resolution or the monetary union collapsing. If that happens, it will raise serious questions about the European Union.

Michael Mullins (Fine Gael)
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I welcome the Minister of State and wish her and the Taoiseach well in their efforts with European leaders to bring some stability to the eurozone. We should reflect on how important the euro has been to our country over the past two decades. Our membership of the Union has been central to the creation of a modern Irish economy. It was responsible for the rapid period of growth over the past two decades and, despite the recession, we have seen a remarkable rise in our standard of living. Europe has invested extensively in our infrastructure, our education system and agriculture. Before joining the EU, we were largely dependent on Britain for exports. Since 1973, exports have grown by 600%. The creation of the internal market and the introduction of the euro have been major elements driving this increase.

Throughout the current crisis, many of the strengths and advantages of the euro have been overlooked. Since its introduction, the euro has increased trade by 50% in the eurozone, controlled inflation and allowed for the deepening of a successful internal market across the EU. Membership of the euro has brought low interest rates and a stable currency, which allowed our SMEs to develop and grow. Admittedly, it was also probably responsible for the property bubble in this country.

Lucinda Creighton (Dublin South East, Fine Gael)
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That, and Government policy.

Michael Mullins (Fine Gael)
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This must be balanced with its importance in allowing business to invest in expansion and broadening our export markets through increasing their ability to do business. The EU and the ECB have provided a lifeline to our financial system during this once in a century financial crisis. There may be criticism of the ECB policy but it cannot be disputed that, without the support of the ECB, our deposits in our banks would have been at risk. Without the steadfast support of the ECB, our financial system would have collapsed.

The Government, working with the ECB and the European Commission, is trying to repair and reform our banking system. The Government's actions have yielded significant achievements. There is over €1.7 billion of private sector investment in Bank of Ireland, there has been burden sharing with unsubordinated bondholders yielding savings of over €5.2 billion and in the past four months Irish banks have raised €6.7 billion of term funding without the benefit of the State guarantee.

The negative consequences of a withdrawal from the euro are alarming. All serious financial and economic experts acknowledge that leaving the euro is not a realistic option. Ireland is an open economy, exporting 100% of GDP and importing 80% of GDP. Leaving the euro would make imports, which exporters and households use, much more expensive to purchase and this would have a negative effect on citizens' quality of life. Many foreign companies based in Ireland, who are supporting 250,000 jobs, would have concerns if we were to leave the euro. Ireland would be a less attractive option for them. The consequences of the euro breaking up would mean a scarcity of funding for our banks. At present, investors are flocking to global currencies. The demand for a new currency would likely to be extremely low.

The introduction of a new currency would impose significant costs on exporting industries with no associated increase in potential markets. We all have a vested interest in getting this crisis resolved as a matter of urgency. Experts and commentators and the wider public are extremely concerned about how we will ease the burden on Ireland. I welcome the Taoiseach's correspondence with his counterparts, saying that the people of Ireland plainly expect action to restore the stability of the eurozone and reinforce Ireland's prospects of regaining economic sovereignty.

We have a major challenge ahead of us. For most people this is a critical time and they are worried about their savings, unemployment levels, the economy nationally and across the eurozone.

I wish the Minister of State well in what she is trying to achieve and thank her for the presentation this morning that clarifies what happened at the European Council meeting in Brussels on 9 December. I look forward to more discussions with the Minister of State and other Members of Government in the Seanad in the coming months.

Jillian van Turnhout (Independent)
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I thank the Minister of State for coming to the House and for her regular communications with us. She has been here before and, as a regular tweeter, her tweets have been keeping us informed, even during the European Council. She shows great initiative. I also wish to note the signing of the accession treaty with Croatia. It is a long time coming for the people of Croatia and is highly significant. I wish it had more coverage and debate. I also welcome the initiative on the blue flag for primary schools but I am sure we will hear more about that next year.

Looking at last week's Council meeting, David Cameron told the British House of Commons he went to Brussels with only one intention, to defend British interests. That made me think about our common interests. Where were Europe's interests and where were our European objectives, the drive to find solutions to overcome this crisis? Last week's Council talks and decisions in the national debates that followed have revealed a number of fears that appear to be underpinning the approach of certain member states to EU governance. What are we actually afraid of losing by saving Europe?

The decision announced over the weekend did not represent any big surprise. Most of the measures were talked about or leaked or were consistent with events at European level, notably the so-called "European semester" based on enhanced Articles 121 and 148 of the treaty and many of the steps that have been implemented already, a number below the radar. It is very consistent with the German Government's demands, expressed as early as May last year in a speech by Chancellor Merkel. The German Administration has kept its view consistently ever since, and the decision at the weekend is just the formalisation of this proposal. Some commentators call this deal a "super-Maastricht". It is about monitoring countries more closely, enforcing fiscal consolidation more pre-emptively rather than waiting for a country to be in serious trouble before acting, and providing more credible enforcement mechanisms.

The idea of a "monetary Schengen" was actually proposed for the first time in 1995 by Stark, then Secretary of State, to complement the Maastricht treaty for the countries joining the euro. This is a provision of the Lisbon treaty, which took almost a decade to come about. It allows a group of countries to make advances on European integration. This is a provision that has provided the legal basis for the Schengen agreement, signed in 1985 between five of the ten members of the European Economic Community. The Schengen agreement now includes 25 countries and has been included in the European treaty. Another option would be to go for an intergovernmental agreement, a weak form of internal treaty. This would be another way to avoid the full change of the treaty that requires the approval of the 27 member states of the EU.

I welcome the news that the President of the European Council, Mr. Herman Van Rompuy, plans to hold a summit at the end of January, although he says it is to discuss the text of an intergovernmental treaty designed to boost economic growth in the eurozone. I note, however, the Prime Ministers of the Czech Republic and Hungary said as soon as yesterday that they would not join any treaty that includes tax harmonisation, a stance we would endorse. The Prime Ministers of Denmark and Sweden have said they must consult with their national parliaments. We are still in a period of flux when we hoped to be settled. I will wait to see the wording of the compact before I make any decision about the need for referendum. This House will have a role in scrutinising the wording, because this House has a role in scrutiny.

I want to note during this debate that a huge challenge for the EU today is the lack of confidence felt by its citizens, not just the markets. Restored consumer and investor confidence are essential for private and public-sector demand. To promote growth, Europe must break free of the austerity-growth deadlock. Job creation policies, especially for young people, must be the top political priority. Growth will only return if competitiveness and innovation can improve. SMEs and entrepreneurship, as well as social entrepreneurship and social innovation, for me, are the key drivers for a sustainable Europe.

Earlier this week the European Economic and Social Committee, of which I was a member for 12 years, held a conference on entrepreneurship. I was interested that in its findings; it called for the active support of the EU's 20 million SMEs and for entrepreneurship in general. Its report said fewer than 10% of the 20 million businesses currently exploit the potential of the EU market. I wonder what the figure is for Ireland; we could perhaps exploit the market more. The president of the employer's group in the European Economic and Social Committee, Mr. Henri Malosse, noted that with an extra 10% growth in the SME sector's exploitation of this market, growth for the EU would increase by 1%.

I am disappointed there is not greater clarity. I will await the details of the compact but I am encouraged to see the active role Ireland is playing at an EU level. The Seanad has a role to play in scrutiny and in supporting Ireland's role in the EU.

Katherine Zappone (Independent)
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I welcome the Minister of State, Deputy Creighton to the House. Am I correct in saying that Creighton is the Minister of State's name?

I would like to start off where Senator van Turnhout left off to say how much I welcome the work Ireland is doing on the European stage, led by the Taoiseach and the Minister of State's very able self. It is wonderful to see the extraordinary work she is doing for us there.

I also welcome that we are not expected to contribute to the bilateral loans to the IMF. It was helpful to receive clarification of that in the Minister of State's speech. It is crucial that we have agreed closer fiscal integration, with oversight, particularly when it comes to meeting deficit targets. The offering of oversight to our European colleagues should not include oversight of Government decisions on overall budgets and the proportion of public expenditure versus revenue raising measures.

I was happy to hear the Taoiseach raise the re-engineering of bank related debt. Does the Minister of State have any more information on that? Am I right to assume it is largely about a renegotiation of the timing and interest rates?

Ivana Bacik (Independent)
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I welcome the Minister of State to the House and thank her for her words about the Seanad. She is very welcome, with or without an entourage, and I thank her for circulating copies of her speech. It was helpful and has clarified some of the context of the debate.

We all welcome the fact political agreement was reached last week by European leaders. We must also accept that at present this is a political agreement and the legal text is not yet ready. Clearly the lack of clarity about the nature of the agreement and its parameters means we cannot answer the question at this point of whether a referendum will be necessary. In a way it is unfortunate that until now the debate has focused on the issue of a referendum. That is the secondary issue. The much bigger question is whether this agreement will be sufficient to save the euro and prevent the type of chaos and pandemonium that would ensue from a eurozone collapse.

I read in The Financial Times of last week excellent commentary which set out starkly the terrible consequences of a eurozone collapse. The author suggests that even a partial euro area break-up, involving the exit of one or more fiscally and competitively weak countries, including Ireland, would be chaotic. He also stated that a full break-up, with the euro area splintering into a greater Deutschemark zone and other national currencies, would create pandemonium. This illustrated for me the stark situation in which we find ourselves.

I will return to the agreement later and will now take a few minutes to comment on the complete turnaround at European level, on which we must reflect. We are now looking to external countries, in particular the BRIC countries, to provide aid to eurozone countries and members of the EU, which is a complete turnaround in a few short years. It is a conundrum because the quality of lives of citizens within the EU remains much better than it is for many citizens in the BRIC and other external countries. This is testament to the strength of the social Europe model, a model which provides strongly regulated markets. The Nordic model is usually held up as the primary example of this. Things have been better in the northern countries. None of the PIGS are Nordic, to put it bluntly. Therefore, joining the EU remains extremely attractive to countries like Croatia. I join others in welcoming the news of Croatia's accession and in welcoming the announcement by the President of the European Council, Mr. Von Rompuy, that timelines for the potential accession of Serbia and Montenegro have been identified. As someone with family from the Balkans I welcome this. It is important to note that despite the crisis facing the European Union, there are countries actively engaging in signing up to it.

For those of us in Ireland who are pro-Europe, it is important to reflect on these bigger issues and on the fact that a lack of European regulation, along with our disastrous national policies, in terms of the creation of the property bubble, led us to the situation we are in. We are all conscious of the need for stronger regulation of lending by European banks and, therefore, stronger regulation at European level, which points to a need for more rather than less Europe. I join Senator Zappone in welcoming the news that there will be a re-engineering of our bank-related debt, in respect of which the Minister of State might, perhaps, provide more clarification.

In regard to the fiscal compact of last week it must be noted that there is not as yet any legal text. The terms of the fiscal compact are as yet foggy. The expression being used is "foggy contours". When I first heard the expression "fiscal compact with firewalls" I thought it sounded like an elaborate make-up case or some type of cosmetic term.

Trevor Ó Clochartaigh (Sinn Fein)
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It is a cover up.

Ivana Bacik (Independent)
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I am conscious all sorts of political points can be made about that. The language used is interesting. It is as yet unclear what it will become. It is an agreement of 26 rather than 27 member states. We know Chancellor Merkel had initially sought amendments to the Lisbon treaty, which would have been a different type of creature. We await more information. While at this stage political agreement has been reached, there remains a lack of clarity in regard to the engagement of the ECB. I note that Mario Draghi has today warned that assistance from Frankfurt is neither eternal nor infinite. Key to the success of this agreement is whether the ECB engages and at what level it will do so.

Because the contours are foggy, we cannot yet say whether it will be necessary to hold a referendum here. I would like if we could have a further debate in the Seanad when the legal text is published, at which point we might tease out the legal ramifications for Ireland and whether the constitutional referendum is necessary. As stated by the Minister for Finance, Deputy Noonan, such referendum may become a referendum on Ireland remaining in the euro. The problem for us is that this is not like the Lisbon treaty in that if one member state does not sign up the treaty collapses because even if we do not pass a referendum the other 25 member states will proceed.

Politically, I have no difficulty holding of a referendum. It will offer a stark choice as to whether we go back to the days of being swamped by a nearer and much larger neighbour, namely, Britain, or remain a member of a Union in which we are one of, perhaps, 28 countries, all of which are equal. That will be the stark choice. The alternative, namely, the return to the days of dependancy on Britain, is unthinkable.

Susan O'Keeffe (Labour)
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I welcome the Minister of State to the House. As a europhile, I welcome the political agreement but maintain a natural caution. During the referendum on the Lisbon treaty, I likened the difficulty in that regard to the difficulty of getting 17 members of one's family to sit down together and agree arrangements for a meal. It is an extraordinary achievement that we have got this far. I welcome it as evidence that we are keen to solve the problem but have not solved it yet.

I urge Government to persist with communication at this stage. The confusion in the public domain is alarming. It is difficult for people to understand this. I suspect it is difficult for Governments and experts to understand because we do not really know what is going on most of the time. The Government must at least attempt to communicate with the people, even when it does not know what is happening. It must continue to communicate with people because that dialogue will become increasingly important. Like my colleague, Senator Bacik, I believe a referendum would give people a stake in our future and the capacity to be part of that debate. Without genuine and analysed communication in the period prior to a potential referendum we will fall foul of the hysteria that may arise at that point.

The term "European social model" appears to have been lost amid all the crisis and talk of fiscal-this and financial-that. I remind Members that the treaty of the European Community sets out several social objectives, including the promotion of employment, improved living and working conditions, proper social protection dialogue between management and labour, the development of human resources with a view to lasting and high employment and combatting exclusion. At this time, when we are concerned about markets and their behaviour, we have forgotten what we have in Europe and the reason we came together, namely, to bind Europe together to achieve high living standards and good working conditions. I urge that the Government, in its communication with the public, not forget that this is what we came together to achieve.

Feargal Quinn (Independent)
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I wish to share my time with Senator Sean D. Barrett.

Denis O'Donovan (Fianna Fail)
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Is that agreed? Agreed.

Feargal Quinn (Independent)
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I welcome the Minister of State to the House. This debate is an example of what we could do with an active Seanad given the responsibility of scrutinising legislation. However, such debates should take place prior to Ministers heading off to negotiate. It would be much more valuable if we could scrutinise measures before negotiations take place rather than afterwards.

Senator Burke referred earlier to the benefits of Europe. Some 95 years ago people were in the trenches and 70 years ago there was another war. However, for almost 66 years there has not been a war. We may perhaps not recognise the benefits in this regard. Senator Burke also spoke of our ability to travel across Europe. If we were part of Schengen, which I hope we will work towards, we would have that ability. When I finished university in the 1950s, I went to the Continent. I discovered then, for the first time, that one could travel. I also discovered a different Europe. Even in those days, one needed a passport to travel from one place to another. One can now go to the Russian border without one.

Senators referred to Croatia joining the European Union and to Serbia and other countries being on the list of countries wishing to join. There is much for which to be thankful. The summit appears to be much more of a patch over Europe's troubles which will support its banks for a while but may not be enough to save the euro. As many experts see it, unless there is a much more comprehensive deal in the near future — perhaps the end of January or February is too far away — it will be difficult to survive the next year in one piece. A huge difficulty has arisen from our failure to achieve overall agreement. Senator Bacik referred to the article in The Financial Times in relation to the chaos that will occur if there is a break-up of the eurozone. Everyone should concentrate on this point and while I am delighted the Minister of State is in her position there is much to do in the next little while to ensure we survive this.

Sean Barrett (Independent)
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I warmly welcome the Minister of State for her commitment and enthusiasm on these issues and she is a most welcome visitor to the House. Towards the end of her contribution, the Minister of State referred to lightening the load on Ireland. In taking my cue from Senator Quinn, this might be something the Seanad will address, as it will be important for Members to assist the Government in every way they can to lighten this burden.

I believe the problem is the euro was an unsound concept from the outset. It is time to deal with this now at Community level. It is not working and most economists stated it would not work. The journalist Conor O'Clery secured an interview with Milton Friedman on 5 September 2001. He told me he did so simply by dialling the number in the telephone book listed under Friedman, M., from his New York office. At the time, Friedman predicted everything that has happened to us. He stated:

[T]he euro was adopted really for political purposes, not economic purposes, as a step towards the myth of the United States of Europe. In fact I believe its effect will be exactly the opposite.

He went on to predict the need for different policies such as tightening monetary policy in Ireland or a more flexible monetary policy in Italy "will produce political tensions that will make it more difficult to get political unity". This is what has happened, as Greece cannot thrive within the present rigid system. In a subsequent comment to Conor O'Clery, Friedman stated Ireland was stuck with the euro. He asked:

How would you break out, and start all over again and establish a new monetary system, the punt? You are not going to give it up. You have locked yourselves together and thrown away the key.

Moreover, Friedman, who won the Nobel Prize in economics, was not alone. I refer to the faults in this system to which Mr. Delors recently referred, such as its lack of an exit mechanism, its one-size-fits-all nature and its failure to protect small countries when they experience large capital inflows from large countries. This is what led to the Irish banking system and our public finances being destroyed.

I hope that Ireland will play its part constructively to remedy these faults. The Minister of State's script refers to the agreement at the weekend for a 0.5% nominal GDP structural deficit. I note the comments made by Karl Whelan and Colm McCarthy in this regard to the effect that it looks like a decision that was made by people who still were hanging around at 4 a.m. This would imply a debt-to-GDP ratio of 17% and Greece will be unable to achieve that. Moreover, Ireland has seen nothing like the level of austerity that would be required to get down to a deficit of 0.5% or to achieve a debt-to-GDP ratio of 17%.

Trevor Ó Clochartaigh (Sinn Fein)
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Hear, hear.

Sean Barrett (Independent)
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In conjunction with John Esmond Birnie, former member of the Northern Ireland Assembly, I wrote a pamphlet on the reason I thought that jurisdiction should stay out of the euro and I believe the decision made by Mr. Gordon Brown to stay out was correct. Moreover, I heard the Swedish Minister for Finance speak on BBC Radio 4 yesterday when he stated that opinion polls suggest 10% of people there would join the euro while 80% would not. It is possible to be successful outside the euro.

I make the point that the euro is not the European Union. The European Union is responsible for doing all the good things over the past 50 years that Members on all sides have mentioned. The euro was a mistake and unfortunately, the solution to the mistake is to give more power to those who caused the mistake in the first instance. Failed institutions should be accountable to people and should not seek to take all the fiscal and monetary powers out of each member state and concentrate them in Brussels. Moreover, I believe it is not 26 to one on this issue. As other speakers have noted, four or five other member states probably are reconsidering seriously the events of last weekend. It also is the seventh time such a summit has been held. If such summits do not tackle the basic problem of the design faults in the euro, as former President Delors has stated, it is a pointless exercise to stay up until 4 a.m. producing documents, some of which are not yet complete, some of which remain to be legally analysed, as Senator Bacik noted, and others of which will not be ready until next April or May. The best economic talents in the world should be brought together to ascertain whether the euro is now beyond redemption or whether it can be saved. However, leaving it to armies of bureaucrats at 4 a.m. has now failed seven times and it is time for something better.

By the stairs to this Chamber, there is a photograph of the Taoiseach of the day making a presentation to the then Cathaoirleach and Ceann Comhairle of what are termed the last Irish banknotes and coinage. This is premature and that sign may have to come down. I envisage the euro becoming a number of currency regions, some based on Germany, others based in the Mediterranean and others based on the Nordic countries. It was too much too far. As it is only a currency, why should so much misery be caused by it? At a time when Winston Churchill was excessively attached to the gold standard, a phrase was used that he crucified the English economy on a cross of gold. The euro is just a currency and should not involve so much unemployment. Ireland had an unemployment rate of 4% and was solvent when it joined the euro. Its unemployment rate is now 14 % and it has needed to be rescued. One must examine openly what evidence Ireland had to join in the first instance and the reason it has failed.

Denis O'Donovan (Fianna Fail)
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While the allotted time has expired, in the spirit of Christmas I will give Senator Ó Clochartaigh one minute to make a contribution.

Trevor Ó Clochartaigh (Sinn Fein)
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I wish to echo much of what Senator Barrett already has said. This agreement really is pushing the State towards further austerity and such austerity is not working. The State already has taken austerity of €20 billion, 440,000 people are unemployed and this mechanism will not improve this position. I also welcome the call by Labour Party Members for a referendum because if the Government is so confident about this being the right course of action, there is no reason for it not to put it to the people in a referendum. While I welcome the debate today, I call for further debate on this issue.

Arising from the austerity measures, the airports will be the scene of many happy reunions this Christmas. However, Members should consider the many sad scenes to which airports have been witnesses over the past year, in which between 40,000 and 60,000 people have emigrated to seek work. The make-up analogy has been used and the basic issue is being covered up in this regard, as the bank debt that caused the problems here are not being dealt with. More austerity is being placed on the shoulders of those who are unable to carry it. People are entitled to a referendum and, to use another make-up analogy, I believe this because we are worth it.

Lucinda Creighton (Dublin South East, Fine Gael)
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As I have much to which to respond, I will do so as comprehensively as I can. Moreover, I might be back in the Chamber early in the new year. I will take up the general point on the role of the Seanad. Members will have noted that since last March, the Dáil has been facilitating statements both in advance of, and after, European summits. This is a good model because it allows both Opposition Members and Government backbenchers to feed into the process and to have a much more constructive and engaged debate. I am quite happy to do this, time permitting. While I am only one person, unfortunately, I would like to try to replicate that model here in the Seanad, if possible. While this does not deal strictly with the issue of European Union scrutiny, which was discussed when I was last here, it would play an important and constructive role in framing the debate regarding what is happening in Europe and on Ireland's place therein, which is very important.

I thank all Members for their contributions and will begin with that of Senator Leyden, who spoke of the history and model in Europe, which is one that avoids the use of the veto and which operates on the basis of consensus. While this is the strength of the European Union, in times of crisis it also can be a weakness because it is extremely difficult to move forward. It is extremely difficult to achieve consensus in a speedy and timely fashion and while one can condemn and lambast the European leaders and European institutions for not acting sufficiently swiftly, all member states are anxious to retain their vetos in areas of vital national importance. A balancing act is required in this regard and there is no simple solution.

However, if one wishes to vaunt the fact that one has the use of a veto on so many occasions, one cannot really then scratch one's head and wonder why it takes so long to make decisions. There must be a certain amount of compromise. I am not nor have I ever been a fan of the veto. While it is a flawed method of decision-making, in certain areas Ireland will of course hold onto its veto and will continue to fight for it.

As for the fear expressed by the Senator on the threat to financial services and to corporate tax rates, I can only reiterate there is no mention of Ireland's corporate tax rate. First, one should note there is no consensus on this issue at a European level. Even with qualified majority voting, I do not believe one would come anywhere close to an attack on Ireland's corporate tax rate. Other member states have a lower rate and many member states are as attached to their corporate tax rate as is Ireland, if not more so. These are peripheral islands such as Malta and Cyprus, many eastern European countries and the United Kingdom. Tax rates are still subject to the veto, so there is no question of a position being forced in this regard.

One member state has a very important and heartfelt attachment to bashing our corporate tax rate, and so be it; it is healthy debate. We expect further reference to our corporate tax rate as the election campaign takes off in that particular state in the new year. We need to be confident enough in our own position not to go running to the media every five minutes when the issue of Ireland's or anybody else's corporate tax rate is mentioned. It is simply irrelevant. People can use it as a political football in their domestic politics but the bottom line is that it will not affect matters at a European level, and this is clear.

With regard to financial services, it is interesting how these issues get whipped up and everybody jumps on a bandwagon. Not so long ago I received e-mails from people all over the European Union and Ireland asking for a tax on financial services because they were the people who destroyed our economy and rode roughshod over Irish citizens, and that it was more than reasonable that we demand they pay 0.01% tax on certain financial transactions. Since Mr. Cameron took his position last week, which is still ambiguous quite frankly and I still do not quite know what the UK wanted from the summit, we have suddenly jumped on the British bandwagon stating we will not have our hallowed financial services subject to such an unfair and unjust tax.

We need to be rational about this. The Government is analysing the proposals, which have come by way of the multi-annual financial framework, which is the budget to 2020. This is how the proposal entered the fray and these negotiations are ongoing and will last for at least another year, if not longer. There are very mixed views on the issue of a financial transaction tax. We want to see full analysis. We saw one analysis from the European Commission which stated it would not be a very effective method in which to do business or to raise revenue and that it could distort competition between the European Union vis-À-vis the rest of the world. This is one perspective and we will look at others.

We will also do our own analysis. One thing is clear: we will not disadvantage financial services in Ireland relative to our nearest neighbour. We are quite dependent because much of the investment in the IFSC is spin-off from London. This is not to say we want a totally unregulated laissez-faire approach. We have to be nuanced in how we deal with this. There is absolutely no immediate threat with regard to corporate tax, and we will analyse and assess very carefully the financial services tax prior to taking a final decision on it. This work is ongoing in the Department of Finance.

Senator Walsh spoke about the failed political system in Ireland and Europe. I must state I disagree. This goes back to a point that was made by other contributors. I attended a meeting of the OSCE the week before last which was also attended by the Australian Minister for Foreign Affairs and former Prime Minister, Kevin Rudd. Everyone in Ireland speaks about Australia being the absolute golden model. It was the second occasion on which I attended an international meeting with Mr. Rudd, and he stated Australians would give their left arm if they could aspire to one hundredth of the success in their part of the world the European Union has had in a political and economic sense. They think we have done a great job and admire what we have done and are doing. He stated he cannot understand why the European Union and EU member states bash themselves at every meeting he attends and are self-flagellating themselves about what a disaster and mess the European Union is when quite clearly it is not. We must get things a little more in perspective and speak about the enormous successes from an Irish and European perspective, while also being self-analytical, self-critical and understanding we must do things better and shape up in the modern globalised world. I do not accept the outright criticism.

I have repeatedly called for leadership at a European level and for European leaders to take the bull by the horns. We have seen some signal of this from France and Germany. These are the two largest economies in the eurozone and European Union. They are the two countries which came together after the two devastating world wars at the beginning of the previous century, to which Senator Quinn alluded. They set in train this wonderful process, this wonderful political and economic union we have. On Tuesday evening, I attended a meeting with my counterpart, Jean Léonetti, at the French Ministry for Foreign and European Affairs at the Quai d'Orsay. As we were casually walking to the area where we would sit, have dinner and hold our bilateral meeting, one of the officials stated it was the room where Schuman made his wonderful speech. The first thing I thought was, "Where is my camera?". There was a very modest clock on the wall and a little photograph. It was the room where the most monumental and fundamental moment in history occurred, the moment when the European project began. Nothing that has happened in European or global history prior or since can compare to this. I felt quite humbled by this. We must keep things in perspective.

I am not deluded. I did not come away from the summit meeting last week overjoyed by the wonderful success and thinking we would not have a 16th or 17th summit. We will continue to have summits, but it was a little step in the right direction. Our position was clear prior to going to the summit. We wanted a much more decisive and considered response from the European Central Bank. I have repeatedly called for the ECB to take a leadership role, set out a clear agenda and make it clear that the ECB will do whatever is necessary to save the currency. This is what we need it to say. This is the Irish position. Going back to the point on the veto, consensus and bringing countries together, it is not the position of some other member states. We think they are wrong and they think we are wrong. I do not know who has the moral monopoly, but the bottom line is that in the European Union and eurozone we have, we must arrive at point where we finally find consensus. We have taken some steps in the right direction. We have a total of €500 billion between the EFSF and the ESM. Ultimately, it is probably not enough.

Jim Walsh (Fianna Fail)
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We need €2 trillion.

Lucinda Creighton (Dublin South East, Fine Gael)
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There is absolutely no scientific evidence for this figure except that the Senator read it in the Financial Times or somewhere else. It was €1 trillion last week and it is €2 trillion this week.

Jim Walsh (Fianna Fail)
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The fact is that it must be rolled over next year in the four countries mentioned.

Lucinda Creighton (Dublin South East, Fine Gael)
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The point is that we need to stop putting a figure on it. I would like to see the ECB stating it will put in whatever is necessary and not €1 trillion or €1.5 trillion. Senator Walsh does not know any better than I do whether it is €1 trillion, €2 trillion or €3 trillion.

Jim Walsh (Fianna Fail)
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I did not say that.

Lucinda Creighton (Dublin South East, Fine Gael)
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Nobody knows. The point is that we must put in place a commitment from the ECB that it will respond in whatever way necessary to ensure we save our currency. We will continue to work towards this position. I have not stopped stating this just because we had a summit which brought us some degree closer to achieving the type of firewall we may need. It does not go all the way. It does not go as far as I would like it to go but we have taken steps forward. There was no big bazooka last week and there probably will not be a big bazooka in a weeks' time, but further steps in the right direction have been taken and I will continue to work and to call on the ECB to take what I believe is the responsible action it is required to take.

I am quite impressed by Mario Draghi. He demonstrated his independence at his first ECB board meeting when he reduced interest rates when nobody expected him to do so. It showed he was being assertive and was prepared to stand up and be counted. He is probably coming under immense pressure from other quarters who do not want to see the ECB responding to political demand. The ECB has a view that it is independent and should not respond to political pressure. I am quite confident the ECB will respond. It has been buying bonds in secondary markets for months, continued to do so after the summit last week and will continue to do so in the new year when much of the debt is due to roll over. I have no doubt that the ECB will continue to intervene. It would be cheaper in the long run for the ECB and all of the EU member states if the ECB would make a clear commitment to do whatever is necessary. It would save all of us much money.

Denis O'Donovan (Fianna Fail)
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I am loth to interrupt the Minister of State, but we have gone past our time and she should conclude. It has been an interesting debate and I am slow to challenge her.

Lucinda Creighton (Dublin South East, Fine Gael)
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I could make many more points. A number of Senators referred to Europe's social market model, which is a source of pride for us. Consider the main economic models that prevail globally. The US model is more oriented towards the free market, less regulated and less concerned with the social market model. I would rather live in Europe than the US if I wanted to raise a family, grow old or have job security or the social benefits that we enjoy even when we fall on hard times.

Ivana Bacik (Independent)
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Berlin, not Boston.

Lucinda Creighton (Dublin South East, Fine Gael)
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The other major model is the Chinese one, which is not democratic. We cannot aspire to it. Europe is not perfect. None of us is deluded or believes that every decision taken by European leaders should be hailed and feted, but it is by far the best of the available options. We should be proud of it.

As to the question of whether we should save the euro, I have immense respect for Senator Barrett, a leading academic light in my alma mater. I agree that the euro was created with an inherent design flaw and I am hearing many remarks of "I told you so", but I am not hearing much from academic contributors and economic commentators about what we should do to fix the euro. Much is being stated about the role of the ECB in short-term interventions and so on. With one exception, most people agree that we should save our currency because to do otherwise would have devastating consequences. Last week, Dan O'Brien wrote in The Irish Times that we would have a shortfall of €30 billion next year if our currency collapsed. However, no concrete proposals on how to fix the design flaw have been mentioned.

Once we move beyond the immediate challenge of providing liquidity and firewalls to the eurozone, fixing the euro's flaw will be our greatest challenge. We need to put in place a plan to redesign our currency and the monetary union. A part of this will involve fiscal union, deeper European integration and proper banking regulation. I am not interested in "I told you so" arguments. I am more interested in finding common solutions to this crisis and in strengthening our currency so that it can serve our people and economy well without ever being subjected to this type of market pressure again. It is not a question of closing up shop, retrenching into 1950s Ireland and printing punts.

I disagree with those who claim that the euro has been a mistake. I am glad that we asserted our economic sovereignty by joining the euro independently of the UK. It was the right decision. Since joining the euro, our trade has doubled and employment and economic growth rates have increased. This is not to dismiss mistakes such as the cheap money provided by the ECB and so on, but the euro has been important for Ireland and has given us significant confidence.

I will make a final point, as I am also under pressure. Journalists in the Financial Times and many Irish commentators have recently been pointing to Iceland as a model country and claiming that it burned its bondholders, did not repay its loans and told the UK and Dutch to go stuff themselves. This is not true, as Iceland is repaying its loans. The situation has been misunderstood. I met many business people while visiting Iceland. From their point of view and that of the Icelandic Government and people, the concern is that there is zero investment in Iceland because it has an untradeable currency. Ironically, it wants to join the EU so that it can enter the eurozone. This teaches us a lesson. Iceland is a fascinating country and has taken more pain than we have. On average, our public salaries have decreased by 14%, but the Icelandic figure is 35%. There is no comparison. Iceland aspires to get onto the road that we have been on for some time.

We can be proud of the EU and the European project without being under any illusion. We need to do a great deal to save our currency, but it is worth saving.

Denis O'Donovan (Fianna Fail)
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I thank the Minister of State, who I am sure is under much more pressure than I am. I am probably echoing the sentiments of the House when I wish her a happy Christmas and success in her difficult job in the new year.

Senators:

Hear, hear.

Lucinda Creighton (Dublin South East, Fine Gael)
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I thank the Leas-Chathaoirleach.

Denis O'Donovan (Fianna Fail)
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When is it proposed to sit again?

Maurice Cummins (Fine Gael)
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At 2.30 p.m. on Wednesday, 11 January 2012.