Thursday, 17 May 2012
Treaty on Stability, Cooperation and Governance in the Economic and Monetary Union: Statements
With less than two weeks to go to the referendum day on 31 May, it is important to have a debate in the House on the importance of the treaty to Ireland, to the future of our country and to the stability of the euro. The first reason for voting "Yes" to the treaty is that it promotes good housekeeping. Passing the treaty will prevent future Governments from spending and borrowing excessively from future generations to finance reckless and unsustainable budgetary policy. The treaty is essentially a set of fiscal rules designed to strengthen and stabilise the European Union and to support job creation and growth. The rules are backed up by strengthened surveillance, co-ordination and governance among member states. For Ireland, this will mean legislating to introduce fiscal rules that will require future Governments to run sensible and sustainable budgets. We never want a repeat of the past number of years. The rules will ensure that never again can a Government increase current expenditure on the basis of unsustainable tax receipts as we saw in the property bubble in Ireland.
Contrary to what has been suggested by many on the "No" side, the treaty will not lead to our budgetary and fiscal policies being decided in Brussels and Berlin. The Government of the day will be free to decide the level of public services and, in line with common sense, it must ensure it raises sufficient revenue to pay for the services.
Another reason to vote "Yes" is the importance of foreign direct investment. The multinational sector in Ireland employs over 140,000 people directly in factories and offices across the country. As we have seen in recent weeks, many significant job announcements have been made. Today, in County Galway, 150 jobs were announced by Merit Medical, which will be of great significance to those in west Galway and many in east Galway. Ireland is still a significant place to invest and in a debate this morning the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, cited interesting figures. On a global scale, Ireland scores exceptionally well in many of the key areas of importance for investors. This score helps to drive investment. The IMD world competitiveness yearbook of 2011 ranks Ireland first in the world for corporate taxes, business legislation for foreign investors and availability of skilled labour. The report ranked Ireland second in the world for consumer price inflation, third for direct inward investment flows, third for availability of finance skills and fourth for labour productivity and exports of commercial services. We certainly need to protect this. When the people of Ireland make a decision, they should keep this in mind.
The foreign direct investment sector is proving to be a key driver of job creation, following record levels of investment in 2011, and more than 1,000 jobs a month have been announced by multinational companies in the year to date.
This sector employs thousands of graduates directly from Irish colleges and universities and offers graduates great opportunities to build rewarding and challenging careers.
Multinational companies see Ireland as an excellent base from which to service their European and world markets. In addition to the US and European multinationals, emerging countries such as China, are beginning to look at Ireland as a hub and a gateway to the European and US markets. I refer to the recent very successful trade missions to China and the visit to Ireland by the Chinese has been very significant and it is hoped this will drive future Chinese investment in this country.
These companies are not establishing in Ireland with the intention of servicing the domestic market. Potential investors regard our central place in Europe as key to our attractiveness and a "Yes" vote will send a clear message to investors that Ireland is fully committed to the European project. A "Yes" vote will ensure that investors who have put decisions on hold pending the outcome of the referendum will make the investment and will ensure that the existing companies continue to trade and prosper in Ireland. However, a "No" vote will diminish our attractiveness as a base for investment and this is a risk we should not take.
It is significant that the IFA has decided that a "Yes" vote is best for our families, best for our businesses, best for our communities and best for our country. Membership of the EU and a stable euro is critical for exports, jobs, inward investment and economic recovery. Agriculture is the only major sector with a common EU policy, the Common Agricultural Policy, which is centrally funded from the EU budget. Negotiations on the future size and structure of the CAP towards 2013 are ongoing and it is vital that Ireland is in a position to exert its influence and maximise its goodwill in these negotiations.
It is significant that the managing director of Glanbia has said it is critical to have a stable currency base in order to maximise our competitive position as export markets are developed. The chairman of Connacht Gold, Padraig Gibbons, said that a "Yes" vote is critical for building confidence in our fragile economy and for ensuring that Ireland continues to have access to all sources of funding and support from the EU. The chief executive of Cork Marts cites the availability of credit at a competitive rate as being significant and many more people across the agri-food business are supporting the "Yes" vote in the referendum.
This treaty is an insurance policy or a safety net and it will ensure that we will have access, if needed, to ESM funding which will allow us to fund those public services and all Government spending. The Government programme is on target but the country is far from immune to global economic events. The markets need to know that we will have a backup in the form of the ESM for access to funds if required. It is vital that Ireland ratifies the treaty on 31 May. I call on all the people of Ireland to study the treaty over the next week and to attend the information meetings. If anyone from east Galway is listening, there will be an information session in Ballinsloe on Monday evening at 8.30 p.m. and all are invited. The Government and the Referendum Commission are doing a good job in providing information to the electorate. I hope that on 31 May, the people of Ireland will give a resounding "Yes" to the stability treaty which will ensure the future success of our country.
People are becoming quite tired of this campaign at this stage. They are hoping it will be over as quickly as possible and that a positive decision will be made. To assist in the campaign, the Joint Committee on European Union Affairs, of which I am a member and the sub-committee on the treaty published its report yesterday and this is available online. The sub-committee was chaired by Deputy Dominic Hannigan, the clerk to the committee is Mr. John Hamilton and its members were an excellent team from the Oireachtas. We put together a very good document on this treaty which has been well researched. We have been studying the various aspects of the treaty since early this year and before the treaty was even finalised. I compliment our representatives in Brussels, our negotiators, the Minister for Foreign Affairs and Trade and the Taoiseach and everyone who worked to achieve this treaty at this stage and which is vital to the national interest of Ireland. Of the 17 eurozone members, only 12 members must agree to this treaty for it to come into force. I would like Ireland to be one of the first members to ratify the treaty. Furthermore, the 4.5 million people in Ireland are the only ones of the 500 million people to have a say. I note that visitors from other countries have been here trying to persuade the Irish people to reject this treaty but all the people I have heard are totally anti-Europe. They are opposed to Europe and they regard the destruction of Europe as starting here on 31 May if the Irish people reject a positive, progressive treaty which is in the best interests of their country. In my view, the involvement of these visitors will assist the Government and the main opposition party in the campaign to have this treaty ratified.
The leaders of the main parties, Fianna Fáil, Fine Gael and the Labour Party, are promoting this treaty. The submissions and detailed comments by the members of the sub-committee are well worth reading and I hope the public will be given the opportunity to read the report which is available online.
It is important to stress the importance of the treaty which establishes the European Stability Mechanism as an element of a global strategy to strengthen the economic and monetary union. The granting of assistance in the framework of new government programmes under the European Stability Mechanism will be conditional as of 1 March 2013, on the ratification of this treaty by the contracting party concerned and as soon as the transposition period mentioned in Article 3.2 has expired, on compliance with the requirements of this article.
This is the key point in that it gives us access to a funding in the region of €700 billion after we finish our present programme with the troika, the European Union and the European Central Bank. Nobody else can guarantee funding. This was a point put to the leaders of other parties and others who are campaigning against the treaty. It is a case of if, but, and maybe. If we reject this treaty maybe we will receive money from the IMF. Why would the IMF provide funding of up to €16 billion to €18 billion after the end of 2013 if we do not get it on the bonds which would be the first step? It is highly unlikely the IMF would give us funding at a low rate if we reject access to the European Stability Mechanism. Such funding, if provided, would be at a very high interest rate. Nobody in the opposite camp in this campaign has given me or the public an idea of where the money will come from as it is purely aspirational.
In the ordinary line of business, if a person with access to very low interest rates on borrowings rejects that proposal and then goes to a commercial bank looking for funding, the bank would doubt that person's head for business.
Nobody in the opposite camp can explain this key point in this debate. The contributions by the Taoiseach and by Deputy Micheál Martin who is a former Minister have made the situation clear. Brian Lucey, the associate professor of finance in Trinity College, Dublin, stated on page 76 of the report:
Alternative funding is potentially available but it is a question of politics as to whether it would be provided. If we reject this treaty, Ireland could well move from being the poster boy for austerity to facing hard default which would be a political disaster for all concerned.
Those are the type of contributions that have been made by very eminent people. I have quoted directly from what he said in that regard. Above and beyond the economist's view, we must bear in mind the experience of the Taoiseach, the Tánaiste and the leader of the Fianna Fáil Party who is a former Minister for Foreign Affairs. Deputy Martin was involved in Lisbon I and assisted in ensuring that Lisbon II became a success, which it was after further consultation with the Irish people.
The Taoiseach, the Tánaiste and the Fianna Fáil leader are not trying to guide people into a decision on 31 May that would be detrimental; they are doing it in the best interests of the people. As a member of the main Opposition party in this House, I am pleased that I can call on Fianna Fáil supporters the length and breadth of Ireland to vote "Yes" on 31 May. They are voting "Yes" because Fianna Fáil has always had a proud tradition of supporting all referendums. Another political party which is opposing this treaty, has never supported any referendum in favour of the EU. It has always adopted a negative position as far as Europe is concerned. Therefore, according to the biblical saying, "By their works ye shall know them". We can judge them based on the work of Fine Gael and Fianna Fáil who have always supported the European Union, and the Labour Party which is supporting it now. I hope Labour Party supporters will realise that it is in the best interests of the Irish people to vote "Yes" on 31 May. I know the Labour Party has some work to do in that respect.
As the Taoiseach said, Europe needs to promote confidence for investors and the euro must be seen as a strong, credible and enduring currency. He also said that this treaty should be seen as a strong statement of intent. We are committed to the euro and will do whatever it takes to stabilise and defend it. Those comments are taken from page 51 of the report of the sub-committee.
I thank the Leader of the House for giving us this opportunity to debate the matter. The Taoiseach also said:
It is not true to say that Ireland can veto the adoption of the ESM treaty, nor is there any good reason why we should do so. The ESM is an insurance policy that would help to increase confidence in Ireland when we seek to return to the markets. Unanimity is required to amend Article 136 of the treaty on the function of the EU, but the ESM can go ahead without that.
That is a clear statement based on the legal advice of the Attorney General to the Taoiseach.
I urge people to vote "Yes" on 31 May. We are canvassing this weekend and will be intensifying our canvass in the coming period. I will be holding a public meeting in Roscommon town on Friday, 25 May in the Abbey Hotel to try to develop this issue further.
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.
This is probably one of the most important debates for the country that we will have in this Chamber. Everything hangs and depends on this treaty and I welcome the opportunity to discuss it in the Chamber.
Ireland may be an island but our trade, currency, exports and workforce stretch far beyond our geographical boundaries. This is a small open economy. This is easily said, but to understand the facts we need to recognise that Ireland exports 80% of everything it produces. We also depend on the stability of the euro currency, which we share in common with 16 other eurozone countries. Today, we are dependent on international institutions for funding to pay our everyday costs - to pay for pensions and wages and to keep our hospitals, schools and other public services running. Ireland and the European Union need stability, which is at the core of the new treaty, which strengthens the rules that support the euro and introduces better national budget rules, with improvements in the way euro countries work together and support each other. This is vital for all of the European Union but especially for Ireland. A stable euro will build confidence and help us to recover and generate jobs. The Government does not generate jobs but creates the environment for growth and stability, and that is what this treaty will enable us to ensure we have in this country.
The treaty will give Ireland an insurance policy, ensuring we will have access to money to fund public services, if we have to seek access to funds again. At present, we have to access money from Europe through the IMF but if we need to access further funds, the treaty ensures that this lifeline will be available to us. The Government is determined to return to the financial markets next year to raise money on our own again, like we did previously. We are on target to do this, but we must also recognise that we cannot control world events and the world economy. The markets need to know that there is a backup in the form of the European Stability Mechanism, which we can only access if we ratify the treaty on 31 May. We cannot access it otherwise. There are no two ways about it - that is written in the treaty. There are major benefits for Ireland, but it is also of interest that all European countries have access to the ESM, if they need it and manage their budgets in a responsible way.
A supportive vote for the treaty on 31 May will not change Ireland overnight. It will not immediately eliminate the array of challenges the Government is working to resolve. However, support for the treaty will be an important part of a solution to that problem and a step forward for Ireland, the European Union and the eurozone. I hope reason will prevail, people will see the logic and will not be led astray by false allegations in the debate on the treaty.
From where will the money come if we do not have access to the ESM? That question has not been answered, a point to which Senator Leyden and other speakers referred. It has been ignored by those on the other side. They have said we will have access to the IMF. We can ask the IMF for funds but if we refuse access to the ESM at a lower interest rate, do Senators think it will give us access, of course it will not. Why would it if other European countries have agreed to sign up to the treaty and we have decided to ride our own horse into the unknown abyss. A previous senator quoted Brian Lucey. People who throw out facts off the top of their head without any figures to back them up are irresponsible to say the least.
Insisting that future governments, both here and in the rest of the eurozone, implement a balanced budget as a norm is a major part of the treaty. If we had followed that rule, while it would not have solved all our ills, it would have helped. In terms of the plan to reduce the deficit to under 3% of GDP by 2015, we are already doing that and that will not be affected by the treaty. The Government has already announced its €17 billion infrastructure and capital investment programme and that will not be affected by the treaty. The maximum structural deficit a country could plan to have would be 0.5% of GDP. Each country would have to have a specific target for this agreed with the EU. A question that has been asked is what will happen if we fall on hard times again. It is written into the treaty that a country may deviate from this in "exceptional circumstances" - this is known as the country-specific medium-term objective. There are those who say we will lose out and will hand over all our decision making to Europe, but we will not lose out. It is built into the treaty that there is a country specific medium-term objective. The objective can be changed from time to time to take account of economic circumstances in any country.
Under the current rules all countries must keep their general Government deficit below 60% of GDP. This was brought in under the Maastricht Treaty in 1992 but as we know everybody broke the rules. Under the existing EU rules, excess debt must be reduced by one twentieth per year. That was not done and that had led us to where we are now. A correction mechanism is built into the stability treaty. If countries do not move towards their target to correct the deficit, that may be referred to the Court of Justice of the European Union and the court may impose a fine of 0.1% on those countries.
On the general government deficit, the treaty requires that countries which ratify it support the European Commission when it makes recommendation on how countries should reduce their deficits. However, they do not have to support these proposals if a qualified majority of the euro area countries opposes the Commission's recommendation. Each country has a responsibility to ensure that they do what is in the treaty and if they do not there will be a call-back option.
The real austerity would occur if we vote "No", cut ourselves off from the ESM and then if we were to require funding, we would have to close our deficit by speeding up the progress of adjustment. This is where austerity would hit the Irish people, if we had to speed up our adjustment at a faster pace that we are doing at present.
We often hear it argued that we would not be in this situation if it were not for the banks and that we bailed them out. Much of that is true but such provision is not in the treaty, it is not a part of it and has nothing to do with it. The Minister, Deputy Michael Noonan, and the Government are currently renegotiating the burden on the Irish taxpayers and we want that to continue. We want to ensure a growth package is built into the treaty, and we agree with new French President that there should an addendum to the treaty. The treaty will not be changed because every country has to come back again on it. We agree there must be growth, and the French President was not the first to state this as the Taoiseach has been stating it in Europe for the past two years.
Some people do not recognise that even without bank debts there is still a €13 billion gap between the Government's spending and revenue. Where will we get the money to bridge this gap? Even if we never had a bank that went bust we would still have a gap of €13 billion. This is a serious issue and those on the "No" side must answer these questions. They speak about extraneous issues such as water and household charges. One would be led to believe they were mentioned in the treaty. They have absolutely nothing to do with the treaty. Domestic Governments in power make these decisions and will continue to do so. It is irresponsible of people to put up posters with false information leading astray people who will not read the full treaty as they try to make a very serious decision. Everybody's vote will count. The vote of the person on the street is as important as that of the Taoiseach's, the Tánaiste's or the Minister for Finance, Deputy Noonan. Everybody should ensure they do the right thing for the country.
We must all ensure that we play our part for the country. Rather than calling for a "No" vote because it is politically opportunist to raise issues such as water rates and household charges I ask people to please consider their future, consider from where the money will come and consider that Ireland must sign up to the treaty to access the ESM rescue fund. It will enhance confidence in the business community if Ireland is a stable place in which to do business. This is the message we want to send to Europe.
We do not need reminding that Ireland is a small open economy with a population of just over 4.4 million people on the periphery of Europe. Our future lies at the heart of Europe. In 1973 when we joined the European Economic Community we leapfrogged mentally, and in business and trade, over the UK. We became Europeans instead of being dependent on the UK for many aspects of the economy and law, which we copied so much.
At present 450,000 people are unemployed and it has been stated this is not about jobs but I do not agree. The first issue in Ireland is the economy and creating employment for our people. The only way to create employment is to bring in foreign money through making products we can sell abroad or through tourism. Ireland is an exporting country and this is the only way it will survive and keep its economy and public services going. We depend on producing goods and services that other countries will buy. I am sorry to state many Irish people do not realise this. Unless people want to buy our goods at a competitive price existing businesses will not grow and we will not have the money to loan to businesses.
I wish to speak about foreign direct investment. When we joined the EEC in 1973 we had an accelerated influx of US multinationals. The reasons for this were our access to the European market and our English-speaking highly-educated workforce. This continues to be true but business needs certainty and confidence that no seismic shift in taxation will occur. The Sinn Féin policy of taxing people earning more than €100,000 is frightening to people in business and to those who want to start businesses. We need to create an environment in which people can grow businesses because this is the only way to create employment. At present 250,000 people in the country are directly or indirectly employed in US multinationals. As the Minister for Jobs, Enterprise and Innovation stated in the House this morning, foreign direct investment is involved in employing one in every seven people in Ireland.
I am a passionate supporter of being a European. I remember when we were dependent on Britain and how our social legislation, mentality and everything about us opened up with dramatic social change when we joined the then EEC. A key change was that married women could go to work. I do not know whether everyone else who remembers when married women-----
I was speaking about the EU. When we became members of the EEC we had to transpose a directive whereby married women could no longer be prevented from taking up employment.
I do not have a problem with people having a different opinion or view to me because this is a democracy. We have had a very stimulating debate and I believe the Irish people have become invigorated by it. I am positive the treaty will be passed. A "Yes" vote is an important step on the road to economic recovery. It will provide stability in our nation's finances. It is mercurial to state we will get the money anyway if we are not at the heart of the action to negotiate. I would prefer for us to be there and that our colleagues are part of the European team. We would have supporters in Europe who would help us if we need more money in the future. The strategy of stating we will get the money some other way is very high risk and nonsense.
We should have stability as a committed member of the eurozone and through our commitment to follow a defined path of recovery. This stability is a prerequisite for global corporations making strategic investment decisions and will help protect Ireland's reputation as the preferred gateway to the European market for overseas investors. Ireland is the gateway to Europe for more than 600 US businesses. These companies have invested €150 billion here to date and employ one in seven of the population. As I stated to the Minister this morning, one of Ireland's successes has been successive Governments consistently supporting foreign direct investment. A change of Government did not mean a swing to the extreme left or extreme right and this stable political Government, no matter what political party was in office, has been a major part of our success.
I agree with Senator White on one thing: it is important that we have this debate because it shows we have democracy in the country. However, we appear to be the only country in Europe that has it. We, as a very small nation, are voting on behalf of the entire people of Europe. Our trade union movement appears to be somewhat divided because it is terrified. However, throughout Europe the trade union movement is recommending against doing this because it is a fraud from top to bottom. There is not a reputable economist who has done the figures and is able to say that Ireland can meet the targets to which we are committing ourselves. The same is true in Spain. The Spanish signed it in the morning and said in the afternoon they knew they could not meet them. Germany postponed its ratification. In France the newly elected President Hollande has said he will try to renegotiate some aspects of it.
As I said earlier, this is not something that is fixed. It is unstable and amorphous - we do not yet know its shape. Yet the Government adamantly sets its face against what I asked - I believe I was the first politician in either House to do so - which is to postpone the referendum. Who is telling us it is not possible to do so? It is the Referendum Commission. Since when was it the Supreme Court of this country or the European Court of Justice? It has exceeded its brief in this in my opinion and the documentation that has emerged from it is not unbiased, as an analysis of the language will show. Just yesterday I had to point out that the Government, in my opinion, illegally used money to fill every box in this House with 60 pieces of deliberately pro-austerity treaty material.
There is no balance in this debate at all, but there is plenty of money to be made. People talked about Greece. An Irish citizen - an American who bought his passport - made €411 million during the week out of the Greek bond system. That is a great advertisement for the kind of capitalism the Government is walking us into.
I said this years ago and I have repeated it. What is happening in Europe is a phenomenon with historical parallel if we consider how Prussia was formed into Germany, first with a customs union followed by tighter fiscal control and so on, and eventually the German Reich. At that stage I said it would go in one of two ways. A centrifugal force has been inevitably set in motion which would inexorably lead to either a strong fiscal union or an explosion of the entire system. While I do not gloat in it, I believe we are seeing an explosion of the system. I believe the whole system in Europe is unravelling, which presents us with an opportunity. Throughout this crisis both domestically and internationally there has been a complete lack of any kind of prophetic vision and it has been replaced by tinkering around at the edges so that the system could be preserved. The welfare of the people must be put first. We need to measure what impact that has on the system and then adjust the system accordingly. Communism collapsed because it was too doctrinaire. We have a very doctrinaire form of capitalism and I believe it is also going to collapse.
One of the things we were not told is that the importation by stealth of the blackmail clause in this treaty could be defeated by the Government. We have the capacity to hold a gun to the head of the bullies in Europe and particularly in Berlin and Frankfurt. We could refuse to ratify the ESM.
Let us put it to the test. We are quite capable of doing this and we should use that to get relief from the bank debt. We are told that those of us on this side of the House do not do the sums. I do not believe those on the Government side do either. If we sign up to this and it is implemented strictly, the debt-reduction rules should ensure a further €5 billion will be paid to the bankers and bondholders each year. The bankers and bondholders are not an irrelevancy, they are central.
There was a quiet change in February with the importation of this blackmail clause which threatened that any member state that did not sign up to the austerity treaty would be shut out from participation in the bailout fund. How is that for European solidarity? We have been part of Europe ever since the continent of Europe was geologically formed.
It shows the wonderful ignorance of the Senator because the President cannot interfere in these kinds of matters. If I had, I would have been impeached. However, I would have been impeached long before it because I would have asked Chinese vice-president Xi Jinping a few questions about Tibet-----
I voted for most of the treaties. I campaigned and voted against the Lisbon treaty over concerns about the armaments industry in Europe. I got a written commitment from the then Government which allowed me to change my mind. Nobody can say I attacked every treaty. I ultimately voted for every one when I got the assurances I wanted. I have got none on this one. For the first time I am completely committing myself to vote against this treaty. Just as on the other side of the House, we have the idea of delegated suffrage. People are elected by local authority members because they represent a certain number of people.
They are also voting for the suppressed people of Greece. I will not blackguard anybody who votes "Yes", but I will not stand for being blackguarded for having the conscience to say "No" on behalf of people who are being driven into starvation and humiliation.
I had to laugh at Senator White when she said that entrepreneurs would be put off if people who had more than €100,000 were taxed for start-off business. It is possible to start off a business with next to nothing - I have done it.
I got involved in a European organisation in 2006. When I went to Brussels, Paris and other cities, I found that we were regarded very highly. We had been at the bottom of the pile and had come up to have the highest GDP per capita along with Luxembourg. We had more people employed - with 2 million employed compared with 1 million 15 years earlier. Everybody asked how we did it. We did it by availing of all the facilities given to us. Three years ago, however, we were suddenly disgraced and at the bottom of the pile. People who had previously commented on how wonderful the Irish people were now asked how we had got it so wrong. We did get it wrong. We sought a bailout, received it and we were at the bottom of the pile for the past couple of years. In the past six months, however, when I travel to Europe, and I was in Paris last week, it has been interesting to hear people say: "What good boys you are and how well you are managing to get on top of this again."
That is happening. This stability treaty tells us that during the good times the EU wants us to allocate some money for the rainy day, but during the tough times it will allow us to borrow. What it and we do not want to do is to find ourselves in a situation where we have no banker, have thrown the key of the bank away and have no chance to go back. It is essential that during the tough times, and we will have tough times for another couple of years, we can borrow again.
This is an extremely important time, and I am referring to today, given the renewed crisis in Greece. I have been watching what is happening there. It would be a mistake to go backwards by postponing or rejecting the treaty. It is not the time for procrastination. It is time for action. We must do something and the one thing we must not do is throw away that bank key. Passing the treaty will be another step for Ireland to demonstrate clearly that it is a country of action and not just of words. Two years ago not many would have predicted that we could have a stable economy and return to significant export growth in such a short period. It has been so interesting in recent times to hear what others in Europe are saying about Ireland. Now they are asking how we got it so right again so quickly when others are not doing it.
We have been distanced from Greece and even Portugal because of the steps we have taken. Spain is now experiencing major difficulties. The heat is on. One of Spain's bigger banks is seeking to be bailed out. It could be argued that the worst of our banking crisis is over. I am not sure if that is the case but it is not over in Spain and that country appears to be too big to bail out. The Nobel Prize winner, Paul Krugman, who writes for The Irish Times and The New York Times, has said that a Greek exit from the euro is "very possible next month".
Yes, he certainly has views about it. He predicted that Spanish and Italian depositors will try to move money to Germany, forcing the ECB to intervene or accept the end of the euro. There is a danger that we could see the end of the euro, and I accept that. However, I believe the eurozone, and Ireland being part of it, is of huge benefit to Europe and us. I have no wish to throw that away. If Greece leaves the euro, that is tough on the Greeks but it is certainly not something we wish to do.
Ireland is a stable country taking the tough medicine. It is seen as the most successful of the three countries to be bailed out. We are making progress to recovery and we are getting confidence back. Irish businesses have taken the tough steps to recovery and to becoming much more competitive. New research from EUROSTAT, for example, shows that Ireland is the only country in the eurozone where the cost of hiring workers has fallen since the start of the crash. As The Economist says: "...the Irish... can draw consolation from a brighter outlook for recovery. After a grim slide between 2007 and 2010, the economy picked up modestly last year, buoyed by exports, and is expected to grow this year... Ireland has some trump cards which the other two economies lack. In particular it remains an attractive production base for high-tech international firms, especially in information-technology and pharmaceutical companies, lured by a skilled workforce and a low corporate tax rate... and thanks to a flexible labour market and an open economy it has already clawed back a good deal of the cost competitiveness it lost during the boom years."
I believe this treaty is balanced on our ability to get loans if we need them. That is the important element. Urging people to vote "No" means we will not have somewhere to go if we need loans, and there is a possibility that we will. Whether someone is running a family home, a business or a government, the books must be balanced. They must be balanced in the long term. We can borrow in the short term but in the good times we must cover that. We all know this. We also know that if we do not balance the books, we will have to go back to the banker to ask for help to get through the difficult period. We must not throw away the keys to the bank door and say we will never need them again. That is what the "No" voters are suggesting. They are telling us to throw the keys away as we will never need them again. I hope we will not but we might and we must have the ability to access cash quickly if we need it. We should not close down that facility.
We have made great progress in rebuilding our international reputation. This is crucial if we are to attract inward investment. A "No" vote would be a major setback and undermine the significant efforts that have already been made. Earlier today Members debated changing some of the rules we have for inviting foreign direct investment into Ireland. Foreign direct investment has played a major role in Ireland. The Minister said one in seven jobs comes from foreign direct investment. The figures he produced from the different investment measurements for Ireland put us among the top three places in the world for investment. It is one of the best countries in which to do business. I believe we are in danger of losing that if we vote "No".
We do not have a choice in this. It is easy to say that we must vote "Yes". If we vote for the treaty, we will still have a banker on whose door we can knock. If we vote "No", that door will be closed.
I have a business viewpoint on this. I have run my own business, a small catering business, for 30 years. The simple rule of business is that one cannot spend more than one earns. It is that simple. It does not matter whether it is £100, €100 or €50 billion.
Our difficulty is that we spend €50 billion, but we raise €36 billion in tax. We must borrow money. Let us deal with the island of Ireland and its budget. This is what is involved. We must borrow that amount this year, next year and the following year within an agreed programme. To be honest, anybody who advocates a "No" vote, even though I have the greatest respect for my colleagues, is grossly irresponsible. I will never play Russian roulette with the economy and its people. However, that is what we chancing. It is too much of a risk to take in any shape or form.
The cost of Irish bonds on the bond market this morning is 7.5%. Even if we wanted to go back into the bond market, we would be raving lunatics to do so when we can access the funds at 3.2%. It is a very simple decision, and I hope the people of Ireland see it that way. However, I am deeply concerned. I do not think people understand that simple message, because they have been given the convoluted message that if they vote against austerity they will vote away the household and other charges. In fact, they will not. If the €50 billion has to be collected on the island of Ireland in five years' time, those charges will probably have to be multiplied by ten. Ireland would become Greece overnight if it cannot borrow that money. Let there be no mistake about that. We are accused that we are trying to scare people. I am not trying to scare anybody. I am trying to tell the truth, and that is the truth.
We are given the option of going down one of two roads. If we go down one road, it will be a mystery tour where one jumps into the black hole and hopes it will work out. One hopes that somebody might deal with one, but at a price. If we go down the other road, we will have a guaranteed line of income and stream of funding. I do not see that there is any choice. I seek one answer from the naysayers to the following question: where will we get the money and at what rate will we get it when we need it in three years? That is the only question I want those on the "No" side to answer. If they can tell me that and if there is a better deal available, I might reconsider my position.
Yes, we would all vote "No". At present, however, the only deal in town to manage our household budget, and it is a household and business budget in Ireland, is a "Yes" vote to secure a guaranteed stream of funding so we can maintain our services.
Our services do not merely include ourselves, the politicians.
They include the doctors, the nurses, the teachers. They also include those who are on welfare. Those who receive wealth from the State are also part of that €50 billion in service provision. When we make this decision, and if we do vote "No", we should think of the impact, damage and harm we could do to every man, woman and child in this country if we do not have access to those loans to maintain our economy.
Often where there are debates in this House I am reminded of how much the Houses of the Oireachtas can be a bubble far removed from reality and where people are at, and this debate is a good example of that. A number of Senators , one of whom was Senator Feargal Quinn, made the point that we have no choice and must vote "Yes". The previous speaker talked about naysayers, irresponsibility and damage, and also that we have no choice and must vote "Yes". The reality is that the people of this country have a choice. That is what referendums are about. That is what democracy is about. The people can say "Yes" or they can say "No". The simple reality is that if the people reject this treaty, they say "No" to the strict fiscal discipline rules which are in the treaty.
Senator Feargal Quinn also made the point that this is about balancing budgets, and to an extent he is correct. It does force countries to balance books, but it also prevents countries from borrowing to invest.
It puts in a new rule, a structural deficit target of 0.5%. Of course, it also puts in place a debt-brake rule, where it sets a percentage for a country's debt-to-GDP ratio of 60%. Currently, ours is approximately 105%. It will be 120% in 2015 and must be reduced by 5% every year until we get down to 60%.
Senator Feargal Quinn made the point that this merely forces us to put money away for a rainy day.
There are many who will not be listening to this debate but who, if they were, would understand that we did put money away for a rainy day in the National Pensions Reserve Fund and that fund was emptied. It was emptied, not to invest in people or to invest in jobs, but to give to the banks to recapitalise them and pay back the bond holders. That is the reality that is facing the working people of this country.
We hear a great deal of nonsense and scare-mongering from those on the "Yes" side about the positions which are being adopted by those of us who are campaigning for a "No" vote. I would remind those same persons that they used exactly the same arguments during the Lisbon treaty campaign, that if this treaty is not passed, the sky will fall in, our economy will collapse and all that they said would happen. The people voted for the Lisbon treaty and what happened is that three times as many are out of work. Far from stability, recovery, investment and all that of the benefits they promised, our economy completely collapsed and those picking up the tab and paying the price are ordinary working people.
I have just come from a good debate hosted by the Digital Hub agency. I commend the agency because it was a worthwhile exercise. It organised a debate between a number of politicians - a member from each of Fine Gael, Labour, Sinn Féin and People Before Profit. It was organised by the management and the staff. It was a worthwhile exercise and other companies should do likewise. The people at the agency are clear that it does not matter what way we vote on this; we still have the same problems in Ireland which need to be addressed.
The two problems we have in Ireland which, I would hope we all would accept, are the lack of growth and investment and the need for jobs. This treaty does not do anything to bring about any of that. What it does is force countries to reduce their deficit far to quickly and in a way that will hamper their domestic economy. We had that in this country. The Exchequer deficit in 2008 was €12.7 billion. Four years and five budgets later some €24.6 billion has been taken out of the economy as part of all of those adjustments. Despite all the pain that went with that, such as the universal social charge, cuts in hospitals, cuts in schools - we saw the Tallaght report by HIQA today - and what all of that means for working people, the Exchequer deficit has increased. It is now over €13 billion. This approach has not worked and it will not work.
What we need is a strategy to get people back to work. We need growth and investment.
There are 56 Members in this Chamber in favour of the treaty and four against. It is not reflective of what is happening outside. For those of us who are putting forward arguments against, at least give us the opportunity to make our points without interruption.
The first is what caused the crash in Ireland and what caused the problem in the first place. Our public finances collapsed in 2008 because the property and consumption bubble burst. That is what caused the crash. We built our public finances on sand, an unsustainable foundation, and it all collapsed.
Let us remind ourselves why it collapsed. It was because banks, primarily the former Anglo Irish Bank, not a high street bank but a property and developers' bank, borrowed cheap money from French, German, Dutch and British banks and from the bond markets and gave it to a small group of developers and speculators who speculated on the price of land. What happened is they ended up with huge loans that they could not pay back, massive debts and, of course, the taxpayer had to come in to bail them out.
There is nothing about any debt write down. The treaty, if it was in place in 2008, would not have solved any of our problems because we ended up with a big gapping hole in our public finances following the collapse of our property bubble, driven primarily by the banks and by their recklessness. This treaty does not deal with any of that. It does not deal with the problems.
On "show me the money", the only reason the Government, in a shameful and contrived way, with its European partners put a formula of words into the austerity treaty to try to link it to the ESM treaty is because they were unable to sell a bad, flawed treaty to the people of this country. They knew the people would not wear it. They had to have some stick to hang over the heads of the people, which is that if one does not vote for this, one will not get the money.
Let us remind ourselves what the ESM treaty is about. It is about stabilising the euro. It is about providing emergency funding for states to stabilise the euro and provide access to funding for banks. Nobody really believes that if we vote "No", we will be shut out of that funding.
-----when they ask me to show them the money is that they should tell me where we will get the money to put into the ESM in the first place because we must make a contribution. From where will that €11 billion come? We must pay over €1 billion, instantly, once that is set up. We are borrowing money to put into this fund and then we will take it back again.
It all is a nonsense. It is an illusion and those on the "Yes" know it. They put it into the treaty simply to scare people.
I respect the views and opinions of all Members in this House, but what I would say about this referendum - I made this point about what is happening in Greece, and I mean it genuinely and sincerely - is that there is a real danger we are lecturing people about what they can and cannot do, pointing to the people of Greece because of the way they voted as causing instability and pointing to the people of this country about what way they will vote on the austerity treaty. The people have a choice. The people can make up their own minds and democracy should prevail. People should be allowed to vote without fear and make up their own minds about what is in the treaty and whether they believe the treaty is good or bad for this country.
We have a choice. We always have a choice. Democracy is about choice. Once we go down that slippery road of saying to people that they do not have any choice, that will be a retrograde step for the future of Europe. We should respect people's point of view and respect their right to do whatever they wish in a referendum.
The Irish people realise that. I wished to put that on record.
This is an extremely important treaty from an Irish perspective. Senator Mulcahy and others have dealt with the fact that we are spending €50 billion while taking in €36 billion. I wish to talk about confidence and our reputation abroad. Work has been done, in particular in the past 12 months by the Taoiseach, the Tánaiste and other Ministers to restore the reputation of this country abroad. Our reputation was in tatters. When people spoke about Greece they referred almost instantaneously to Ireland after that. If one googled newspaper articles 18 months ago such as The New York Times or newspapers in Germany and as far away as Australia, Greece was the first word and Ireland was next. A difficult sales job was required to be done internationally to at least steady the Irish ship and the Irish reputation. Thankfully, that has been achieved. Now, this country is regarded as one that continues to take its responsibilities seriously. We are endeavouring to rectify the situation to correct the overspending that has taken place. We have cut away a lot of the fat. We have reduced numbers in the public service, turned things around and tried our level best to comply with all elements of the troika deal. We have succeeded in that regard. Every time the troika has done a review on our performance for the previous three months we have met the criteria. That has given us flexibility to negotiate a stimulus package, which is what we want.
I heard an extremely good interview this morning on "Morning Ireland" with the Minister for Public Expenditure and Reform, Deputy Howlin. It was one of the best interviews I have heard in a long time in terms of the confidence he has and how he proposes to deal with the State assets to leverage money and be in a position to build the primary health care units and schools we need and to invest in vital elements of infrastructure in this country which will ensure that the construction sector can get a kick start. A vibrant construction industry is as vital to this country as any other industry.
In terms of the work that has been done in the past 18 months to restore our international reputation, if we turn around and reject the treaty we will be seen internationally as having chosen to kick Europe which has been so good to us. We will be seen as a country that is on the outside tier – that is allowed into the bar and the restaurant but cannot play the course. We do not need that. Just when the work has been done to improve our reputation and ensure there is respect for us internationally again the last thing we as a nation need to do is turn around and dismantle it because if we do it will be at our peril. A resounding "Yes" vote will ensure that we will benefit from the work that has been done internationally. In effect, the cream will come to the top. On 1 June we will be able to look all of our European colleagues in the eye and say that we are a central part of the European project. Our voice will be heard and respected. We can ensure that as a country we will play a pivotal, strong and influential role within the European project. We have always punched above our weight in the past and we can ensure that is the case by endorsing the treaty resoundingly.
I do not know what plan B is if the approach we are taking does not work. I have listened to the "No" side and I note that Deputy Wallace in the other House acknowledged the fact that the "No" vote is divided all over the place; that there is no coherence to its argument and no effective campaign. The reason for that is that there is no other option. We created the mess we are in over the past decade. We are lucky that we have friends who are prepared to help us out. The last thing we need to do is eliminate any source of funding. We must have access to every possible source of funding available. The ESM model is a good one. It is an insurance policy. I accept the description has been used previously but to bring it down to a common sense level; one insures a house. If one does not insure the house, one is being reckless. One pays a small amount of insurance to ensure that when something does go wrong with the house that one can make a claim. The ESM is precisely the same. I accept we will contribute to the ESM but if and when we get into trouble again – let us hope we do not – at least we will be in a position to draw from that source of funding. If we are limited to one source of funding – there are no guarantees that the IMF will lend to us, but if it does, it will dictate the terms. It would be preferable to have a choice. If we have played our part and bought into the stability mechanism then we will have a choice.
In terms of job creation it is worth noting that ten years ago there were 1.5 million people working in this country. In the height of the boom the number increased to 2.2 million. However, there are still 1.8 million people working in this country. That is 300,000 people more than were working in the late 1990s. That is a point to consider. It is not all doom and gloom and we must recognise that. The Government's target of creating in excess of 100,000 jobs is doable. Confidence is returning. If we endorse the treaty, confidence and belief in this country will continue to flow back. We will see foreign direct investment. If one had €100 million and one was looking to create a European headquarters one would wait to see the outcome of the treaty before investing in this country. The last thing one would do is invest money in a country that has opted to be on the outside track. Anyone with such an amount of money to invest from the United States or China, among other countries, would decide to wait and see. They want to do business with a country that is at the centre and the core of the European project.
I will campaign between now and 31 May for a "Yes" vote. Whatever side of the argument we are on, as parliamentarians we have a responsibility to explain to as many people as possible why we want them to vote "Yes". I commend the treaty. I sincerely hope the Irish people do the right thing.
I welcome the opportunity for a renewed debate on the stability treaty. This is the third time we have debated this issue in the Seanad. We debated the treaty itself in the first place and then we debated the Bill and we are now debating the matter again. I am delighted we were able to facilitate this debate because it is so important given how close we are to the date of the referendum on 31 May.
Like the majority of speakers who have spoken before me I too am calling for a "Yes" vote. I am out campaigning actively for one. I have debated publicly against those on the "No" side and I am happy to debate with them again in this Chamber. I am happy to debate the issue on the doorsteps and out and about also. It is always important on both the "Yes" side and the "No" side that we seek to conduct the debate in a respectful and dignified fashion and that we do not resort to scaremongering, misleading, overstating or making false claims. All of us would agree with that in principle but it is unfortunate therefore that there are some on the "No" side – I emphasise that it is only some – who have made outrageously misleading claims in the course of the debate. I do not refer to the debate in the Seanad Chamber today but to the debate more generally. In particular we have seen in the past 24 hours an extraordinary link being made between the stability treaty and our rate of corporation tax. There is absolutely no link between the stability treaty and the issue of corporation tax. The Government has made very clear its commitment to retaining Ireland's 12.5% corporation tax rate. That will remain clear when the treaty is ratified, assuming it is ratified. It would be extraordinary for the vast majority of businesses and employers in the country who support a "Yes" vote to do so if there was some sort of link between the treaty and an undermining of Ireland's tax rate. That is one claim that has to be firmly nailed.
The other glaring issue that has dominated the debate is the use of the "A" word by the "No" side. I refer to the issue of austerity. There is an insistence on the "No" side to call this the austerity treaty, despite the fact that the full title is the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union. Stability treaty is the most accurate shortened version. I take issue with RTE which insists on calling it the fiscal treaty. That is not the correct shortened version. An editorial in, I think, The Irish Times today, very usefully, deals with this issue of austerity and criticises what the writer calls the simplistic refusal of some "No" campaigners to acknowledge that the alternative to what those campaigners call the austerity treaty is, in fact, austerity in spades. The Irish Times goes on to refer to the naive and wishful thinking on the "No" side and the irresponsible feeding of a fanciful narrative to a people who are anxious for some sort of reassurance. Nowhere is this more evident than in the "No" side's refusal to accept that access to the European Stability Mechanism, ESM, would be a good idea for Ireland. It is utterly irrational to rule out access to the ESM. As my colleague, Senator Gilroy, pointed out, the question is where else will we get the money. If we cannot access the ESM, and if we have ruled ourselves out of access to it, we are not guaranteed or assured of access to any other fund. Those who argue that we could seek to access IMF funding or that our European partners will not let us down are engaged in the sort of fanciful narrative The Irish Times has, rightly, criticised.
There is no issue of blackmail. We are not being asked to sign up to a treaty under threat of losing access to the ESM. The issue is one of reassurance for the states that are funding the ESM that the states that are accessing the ESM will have signed up to certain targets. The majority of those targets have already been agreed at EU level as part of the Stability and Growth Pact. Access to the ESM has come to be a dominant issue in the debate.
The other issue is the ESM itself and what it entails. This week, the Government published the European Stability Mechanism Bill 2012 in order to ensure that people are fully informed when casting their votes on the stability treaty. The Bill, and the terms of agreement that led to it, make clear that Ireland's capital contribution is capped at 1.59% of the total €80 billion, amounting to a total of €1.27 billion over three years. This is a small price to pay for the security and certainty that will come with access to the ESM, especially in the context of the €36 billion of funding we will require to run the State in 2014 and 2015. Those on the "No" side are fully aware of the level of Ireland's contribution. They are also fully aware, because it is on the public record, that the capital contribution to the fund is fully factored into our latest budgetary forecasts and will not impact on our general deficit target of 8.6% in 2012, which we are well on the way to reaching.
There has been some talk about callable capital in the ESM. It is important to note that the callable capital is not expected to be called upon and has no impact on our measured debt levels or our deficit, so it does not affect our deficit reduction plans. There has been a good deal of scaremongering about what the ESM entails. The Bill is on the website of the Department of Finance and is clear for all to see. The commitments under the ESM are clearly set out and separate from the commitments under the stability treaty, albeit that to access the ESM after 1 March 2013 we need to have ratified the treaty. That is a key issue for many people in debating the pros and cons of the treaty.
Finally, we must deal with the consequences of a "No" vote. Growing instability and chaos in Greece is bringing home to people the need to ensure maintenance of our steady path to recovery and stability in our own finances. Senator Gilroy has pointed out to me a comment made some time ago by Alexis Tsipras of the ultra-left Greek party, who did not engage in the recent attempts to form a Government. He said some time ago that the EU, led by Berlin, is engaged in a high stakes game of bluff and that the threat to accept more austerity or exit the eurozone would never happen because the eurozone itself had too much to lose. That is wishful thinking. It brings home to us in Ireland the vital importance of maintaining stability in public finances when we see what can happen in other countries and the political, as well as the economic, fallout in Greece.
Other colleagues, most recently Senator Conway, referred to the great benefit we have derived from foreign direct investment. The job creation figures in recent months alone are considerable. Thousands of jobs are coming in because companies from abroad feel confident in investing in Ireland because we are a stable economy on a steady path out of our current programme. We need to ensure the maintenance of that stability. We need to ensure growth but we cannot have growth without stability. All of us, particularly those of us in the Labour Party, are very supportive of Francois Hollande's efforts to ensure that there will be a growth package alongside the fiscal restraints contained in the stability treaty. That is very important. The fact that we will see a growth package developed alongside the treaty and in parallel with it will be a positive factor in speaking in favour of the treaty.
The treaty aims to maintain the stability of the eurozone. It aims to maintain security of confidence in the eurozone countries. It is about much more than Ireland. As everyone is now aware, Ireland has no veto on the treaty. If we vote "No", ratification of the treaty will go ahead and we will be left behind, with all the ensuing instability and potential political fallout that will involve.
For all of those reasons, and many more, I will be urging everyone I meet between now and 31 May to vote "Yes" to the treaty in the referendum on that date.
I join with the previous and other speakers in suggesting that Ireland's best interest will be served by a "Yes" vote on referendum day.
We have discussed many of the issues pertinent to the debate during our discussion of the Referendum on the Thirtieth Amendment of the Constitution Bill. On that occasion, we expressed the hope that sufficient information would be made available to every citizen, that there would be a reasoned and calm debate and that there would be strong encouragement to access information about the treaty itself in order fully to understand its content. In the main, that has happened. The Referendum Commission has done its work effectively and in good time. Information of an independent nature has gone to every household in the country and, side by side, the Government has made information available.
At previous referendums, members of the public claimed they did not understand what the referendum was about. There will always be a number of people who claim they do not understand something, but on this occasion, as a result of debates on TV, radio and other media and the information posted to each house, there is a much clearer understanding of the referendum and its consequence. The consequence of the treaty for the country is significant. Do we continue on a road of stability and certainty or do we take a wild guess and a tour down a road that could turn out to be a cul-de-sac? Ireland's best interests are served by a "Yes" vote.
A referendum, in which every citizen is asked to vote "Yes" or "No", can give rise to the belief that the question must be huge and complex. As the Government is making it clear that the stakes are high in this case, people believe the question must be substantial. The issue is, in fact, precise and clear-cut. Of all the referendums on European matters since our accession to the European Union in 1973, this is the most black and white. It is not complex. As we are having a referendum, some people believe the question must be complex. The "Yes" side must, perhaps, exaggerate its argument and the "No" side must do likewise. This can sometimes be unhelpful.
The referendum is about stability and not about austerity. The treaty is not called the austerity treaty but the stability treaty. It is about ensuring future investment and sustaining an environment where job creation will be strong.
We have discussed many of the issues pertinent to the debate during our discussion of the Referendum Bill.
We Today in Galway the Taoiseach made a significant announcement about investment, and on an almost weekly basis over the past number of months there have been announcements of job creation. We have had successful visits to and from China, we still have significant interest from the United States, and of course we have significant interest from investors here at home in future projects. All of these people, who have a stake not only in their own industries but in the future of this country, are telling us a "Yes" vote is necessary. The representatives of business, big and small, are saying a "Yes" vote is necessary for investment and job creation, the representatives of Irish farming, in the main, are recommending a "Yes" vote, and a significant number of trade unions are recommending a "Yes" vote. They cannot all be wrong.
Those who are advocating a "No" vote are, in general, those who have advocated a "No" vote on every occasion since 1973. The people saying "No" are those who told us that a "Yes" vote for the Lisbon treaty and a "Yes" vote for the Nice treaty would result in the introduction of conscription to a European army, with children being kidnapped from their parents. They were as wrong then as they are now. We are having, and must continue to have, a calm debate about the facts. A country, just like a household, must live within certain financial parameters. There is a growing acceptance that if this treaty and its provisions had been in place five, ten or 15 years ago, our country would not be in its current economic difficulties, because different political and economic choices would have had to be made. The additional responsibility that will now be forced not just on our Government but on the Government of every country signing up to the treaty is good for all of us. It will result in better management and better economic conditions, and it will result in stability and investment. That is what the debate is all about.
The polls appear to indicate that a significant number of people have yet to make up their minds, and the job of all politicians, no matter what side of the argument they are on, is to encourage people to read about the treaty, listen to the debates, and vote. My desire is that there will be a strong "Yes" vote, but also that there will be a significant turnout, and that it will not just be a majority of a minority saying "Yes" but a majority of a majority. There is a substantial amount of time to go. If it was a general election that was being held on 31 May, it would have been called only last week. Much canvassing must be done and much convincing must be done. That is what a referendum is about.
Ireland is the only country in the EU that is offering its citizens the chance to make this decision, which is of significant political importance. There was a school of thought that suggested that the Government could proceed to have the treaty ratified by a vote of the Oireachtas, but the Government took the more difficult but better route of consulting with the people and asking them in a calm and mature fashion to say "Yes".
I join with my colleagues in recommending a "Yes" vote. I firmly believe, from the point of view of future development and future investment in this country and in order to put our people back to work, that a "Yes" vote is by far the wiser and more sensible choice. It will not change things overnight or fix all of our problems but to leap into the dark with a "No" vote would be much too dangerous for Ireland and its people. Therefore, I sincerely hope Ireland will say "Yes" on referendum day.