Thirtieth Amendment of the Constitution (Treaty on Stability, Coordination and Governance in the Economic and Monetary Union) Bill 2012: Second Stage (Resumed)
Thursday, 19 April 2012
Dáil Éireann Debate
Deputy Anthony Lawlor: I remind the Minister that I spoke last night on the importance of ensuring the Bill is worded as simply as possible in a language the people can understand. The wording of some of the previous treaties have been complicated and difficult to understand. The key words used in this treaty are simple and understandable.
We must deal with the facts. There is no point in dealing with lies. Members of the public must be able to discern what are the facts and what are untruths. I will highlight some of the truths. The truth is that we must balance our books. Regardless of what type of economy we have, it is vital that we balance our books. The original treaty in 1993 when the Single Market Act came into force and the Maastricht Treaty with the formation of the EMU dealt with many of the structural concerns people have. The facts are being distorted by the Opposition. I heard Deputy Colreavy mention yesterday that if we vote “Yes” in the referendum on the treaty that hundreds of thousands of people will emigrate. The fact of the matter is simple. Some 42,000 people emigrated from this country last year but there was net immigration into the country of 32,000. It is difficult, therefore, to comprehend that a Member would say that hundreds of thousands of people will emigrate as a result of the ratification of this treaty. The Deputy also said that unemployment is increasing but we all know the statistics show that currently there is a slight decrease in the level of unemployment. The Deputy mentioned that by 2015 one in ten people will be unemployed but currently one in seven people are unemployed. Therefore, that will lead to a decrease in unemployment.
Mr. Coffey further wrote: “The expenditure rule would have put the country in a much stronger fiscal position to absorb the deficit and debt problems the crisis has created and it is likely we would have avoided entering an EU/IMF programme.” He was basically saying that if we were part of the treaty that was in place at the height of the boom, we would still have our financial sovereignty today.
Deputy Martin Ferris: In the debate on my party’s Private Members’ motion last month it was claimed by several speakers from the three parties which support the treaty that it is necessary in order to introduce stability to the financial markets and to stabilise the eurozone. It might well have that result, although there is nothing currently to suggest it will, but it would be on the basis on a new dispensation inimical to the interests of the majority of the citizens of this State and of all other EU States and members of the eurozone.
The people of this State are being asked in this referendum to make a choice between two negative outcomes. On the one hand, they are being asked to agree to a further surrender of whatever limited sovereignty remains while, on the other, they are being threatened that if they do not this State will face financial ruin. It could be argued that we have already embarked on the latter course. While the banks and the bondholders have been bailed out, we have already witnessed the consequences that is having for huge numbers of people and for society itself. People, whether in employment or dependent on social welfare, have seen their personal incomes drastically eroded. The existing economic downturn has been also greatly exacerbated by the politics of austerity. The previous Deputy referred to emigration and said that 45,000 people left the country last year. I know from my experience, and I am sure every rural Deputy and some urban Deputies could state quite categorically, that the level of emigration from Ireland at this point in time is accelerating with young people leaving on a daily basis.
There are far more people unemployed now than there were when the current disastrous course was embarked upon by the previous Government, only to be continued, despite the earnest pledges, by Fine Gael and the Labour Party in the lead up to the general election. Unemployment in this State averaged under 5% on an annual basis between 2000 and 2008. We all know what took place at the end of 2008 when the disastrous decision was taken in regard to Anglo Irish Bank. Unemployment rocketed after that and now stands at 14% and it is far higher than that in many constituencies. In my constituency it is more than 26%. That can be compared to the EU average of less than 10% and that figure is skewed by the high rates in this State and those others at the hard end of EU broken austerity programmes imposed upon their citizens.
We are all aware that there was an economic downturn but what is beyond doubt is that what was a European and a global downturn that impacted here has been made far worse by the current policies pursued by the Government. Recession led to an increase in debt and unemployment levels but these would not be on the current scale had it not been decided to incorporate into the sovereign debt the debts of the failed banks. History also proves that one does not build economic recovery through the sort of austerity programme being imposed on this State and elsewhere throughout the EU due in large part to elected governments, going against their electoral promises, agreeing to implement measures dictated by third parties. If we pass this referendum and sign up to a further surrender of sovereignty, even a new Government that is opposed to the measures will find it difficult to reverse them or to pursue a different course. That is why it is vital we reject it and ensure we retain whatever financial and economic sovereignty remains so a future Government with more back bone would have the basis to reclaim what has been given away.
As I said in my speech on the Private Members’ motion in March, it is noticeable that this time we are at least being spared the promises made during the Lisbon treaty referenda, particularly during the first campaign before the electorate had the audacity to reject the proposal. During the first campaign we were promised jobs and never-ending prosperity. When that failed to convince people, threats of dire consequences were used. It could be said that it worked. Given the threats being made, one wonders what further terrible nightmares will be conjured up if the people vote “No” this time.
We have had some hint when supporters claim a “No” vote will mean this State will not be able to access any more money. Of course, people are being told there will be no more money to fund vital services while those making the threats neglect to mention that the massive, unpayable debt we are saddled with now was incurred mainly as part of the banking bail-out. The only time it is referred to is when the State hands over massive sums to pay off Anglo Irish Bank’s debts and that if we did not do so, we would be punished. They are possibly correct but that begs the question of whether we ought to be in a situation where external forces exercise such control over the State and can blackmail us into paying off the bank’s debts, or at least as much of it as we can before the whole thing becomes untenable, as it surely will if the current course is maintained. If we agree to the proposal in the referendum, and we ratify the treaty, that will further increase the powers of those external forces and their ability to dictate to the detriment of the majority of citizens and financial policy of the Irish Government. That will mean, in the context of the current debt, incorporating the private bank debt, an unending vista of austerity dictated and imposed under duress.
We have already seen the impact of the slashing of public services and the erosion of incomes on the economy. There are still, however, those who fail to understand that it is having a negative multiplier effect on the economy. Even relatively healthy sectors and individual enterprises are being negatively impacted and, in many cases, destroyed by the economic austerity policy.
It is clear the rejection of the latest proposals to surrender further sovereignty would constitute a significant step in turning around things. At the very least, it will mean if a more imaginative and pro-active Government succeeds the present Government, it will not be hamstrung by external forces having a veto on domestic policy. We have been told consistently that if we do not do that we are heading nowhere. We know, as was pointed out already, that emigration has significantly increased. The Minister has tried to play down that but it is a fact that tens of thousands of young people are leaving the country each year, with as many as 65,000 this year, to never return. When young people left in the 1990s and in the early 2000s, most would come back but now the brains and the youth of the country are being forced out by austerity and successive Government programmes that are detrimental to the common good of the Irish people.
Deputy Gerry Adams: Aontaím leis an méid a dúirt an Teachta Ferris. Sinn Féin is an internationalist party and our republicanism is a European and internationalist philosophy. Co-operation with our European partners is essential if the State is to meet the economic and social challenges facing us in the time ahead but Sinn Féin believes in a different type of European Union, a union of equals, not a union in which the bigger states impose their decisions on smaller states. Creideann Sinn Féin nach bhfuil an Rialtas seo díreach cosúil leis an Rialtas deireanach, ag déanamh go leor ar son chearta shaoránaigh na tíre seo.
The eurozone crisis is part of a deeper crisis within international capitalism. The treaty is the French and German strategy for tackling this crisis but in a way that favours big business and the wealthy, and that protects the interests of the larger states. Sinn Féin believes the austerity treaty will not solve the eurozone crisis or fix the economy of this state; creidimid a mhalairt — táimid cinnte go mbeidh tionchar níos measa ag an gconradh seo ar Éirinn agus ar an Eoraip.
The Government tried very hard to deny citizens their right to vote on this treaty. It sought and secured changes to the final draft of the treaty in a brazen attempt to avoid a referendum. This failed, however, and the people now have an opportunity on 31 May to reject what is a bad deal. Having lost the referendum argument, the Government has now fallen back again on more traditional methods of winning a “Yes” vote. As with the referendum debates on Lisbon and Nice, the Government and Fianna Fáil have resorted to trying to scare and to bully citizens.
Once again the claim is being made that this vote is about staying in the European Union or the eurozone or leaving. This is not true. Ireland’s position as a member of the eurozone is secure no matter what position we take on the austerity treaty. The Government parties and Fianna Fáil also claim that if we reject the treaty, the State will be excluded from future help from the European Stability Mechanism. This is also not true.
This has been referred to as a blackmail clause. It is also an empty threat to bully people into supporting the austerity treaty. This clause is not an article of the ESM treaty. It is part of the preamble and therefore does not have any legal standing, particularly if it is in conflict with the primary mandate of the European Stability Mechanism as outlined in Article 136 of the EU treaties. This clearly states that no member state can be denied funding if to do so threatens the stability of the Eurozone as whole. The Government also has a veto on the ESM, by virtue of having a veto over the amendment to Article 136 of the European treaties. If the austerity treaty is rejected by the citizens, the Government should seek a further amendment to the ESM treaty removing the blackmail clause and should use its veto on this matter if required.
There are options, and the threats now being made are as bogus as were the promises during the Lisbon treaty campaign that passing that treaty would create jobs. Since that treaty was passed, 170,000 jobs have been lost. The reason for such scare-mongering by the Government parties is that they are unable to find a single positive reason for the Irish people to support the austerity treaty.
There are very many good reasons, however, for believing the austerity treaty is neither a good deal for the State, for citizens or for Europe. We have rehearsed the argument that the treaty will rigidly impose an austerity strategy that is failing across Europe. We have examined an tslí ina bhfuil siad in ann é a dhéanamh and the dire social consequences of austerity are to be found in every corner of this State, in every household struggling to pay mortgages and household bills, on every main street where businesses are shutting down and in every hospital and school where reduced resources are hurting the sick and the young.
We saw the pitiable pictures today, in the newspapers and on YouTube, of an elderly couple being evicted from their home. All of this is the product of austerity which, plainly and clearly, does not work.
The treaty will hand over significant control of fiscal and budgetary matters to unelected EU officials. Whatever view a citizen takes of this or any other Government, at least by virtue of universal franchise, citizens can change the Government. In every election we can make Governments and other parties democratically accountable. However, we cannot do this with EU officials who are not elected by Irish citizens and cannot be held accountable by them. Moreover, if the treaty is passed, the new 0.5% of gross domestic product structural deficit provision will constitutionally lock this and future Governments into austerity policies in perpetuity. Ciallaíonn sé seo níos mó gearradh siar do na seirbhísí poiblí agus níos mó cánacha. If a future Government, one which was truly radical, sensible and realistic, were to opt for a different path, this treaty gives the European Court of Justice the power to impose fines of up to €160 million. So much for our sovereignty and the Taoiseach’s claim that he wishes be the Taoiseach “who retrieves Ireland’s economic sovereignty.” Leis an chonradh seo tugann sé níos mó d’ár gceannasacht dóibh.
Sinn Féin has argued consistently — the Labour Party did the same in opposition — that there are alternatives to the Government’s focus on bank bailouts and austerity. The focus, clearly, must be on investment, growth and job creation. The Sinn Féin approach is based on fair taxes, investing in job creation, debt restructuring and growing the all-Ireland economy. It is about protecting public services and those on low and middle incomes. Sinn Féin has called for an increase in the lending capacity of the European Investment Bank to stimulate activity in the real economy; the cleansing of the European banking system of toxic debts; debt restructuring agreements involving debt write-downs; and ending the obligation on the State to pay the Anglo Irish Bank promissory note and unguaranteed senior bondholders in Anglo Irish Bank and other banks.
For these reasons and because there is an alternative, the austerity treaty must be opposed. Its debt and deficit limits are draconian. It will mean decades of austerity imposed on a people crying out for investment in job creation and growth. It means citizens will continue to pay for the greed of bankers and the bad policies of the former Fianna Fáil and Green Party Government. This is wrong. The Labour Party and Fine Gael have robbed themselves of any right to criticise the previous Government in view of how they are pursuing that Government’s policies. In fairness, Fine Gael is pursuing its conservative right-wing ideology, although I am sure some members of that party have reservations about the issues involved in the treaty which some of them voiced in an earlier debate. Not that long ago Labour Party MEPs voted against measures in the European Parliament that are now part of this treaty. One Labour Party MEP described austerity as a “a recipe for the rich getting richer and the poor getting poorer.” Another said these measures “will kill growth, destroy jobs and derail recovery.” They are right. I appeal to Labour Party Deputies to vote with their consciences and in solidarity with working people and against the Bill and the treaty.
Minister for Social Protection (Deputy Joan Burton): When I speak to the big multinational employers, many of them in Blanchardstown in my constituency, they tell me that one reason they continue to locate in Ireland is that they believe this country is committed to the European Union. We have punched well above our weight in attracting foreign direct investment into Ireland. Companies such as PayPal, Google and Facebook locate in Ireland because they see it as a committed member of the eurozone. In a globalised economy the eurozone is an important financial region, with a very large population of more than 400 million. Multinational companies are interested in having a presence in Ireland because of the attractions we have to offer as part of the eurozone, as well as our corporation tax rates. There is also the fact that we are English speaking and have a large number of very well educated young people. I firmly believe voting “Yes” in the referendum will show Ireland is willing to play its part in building a more financially stable European Union and eurozone. Voting “Yes” to the treaty will help to stabilise the euro and boost investor confidence in Ireland. Voting “No” would bewilder American and other foreign companies which are planning their European investments. It could threaten the hard won business opportunities we are building in China and elsewhere.
There is a big advantage in staying the course with the European Union. For a start, collective action to boost growth and investment offers a much better prospect of restoring the health of national budgets rather than sole reliance on austerity. Our previous experience of such joint European action through the Regional and Social Funds, for example, was almost entirely positive. Our roads and colleges are the legacy of these funds that we continue to enjoy today.
Ireland is not alone in its troubles. Bank debts and unemployment haunt many European economies. There is much more to be done to help beleaguered countries such as Ireland, Portugal and Spain, but I firmly believe we are far better off making that case with like-minded Governments inside the European tent rather than being a lone voice outside. The Government has put a painstaking effort into rebuilding Ireland’s reputational capital in Europe, the USA and the emerging global powerhouse that is China. There are some indications that this effort is bearing fruit, notably in the confirmation by leading international companies that Ireland continues to be as much a magnet for inward investment as it was a decade ago, despite our severe economic difficulties. A “No” vote would upend that process.
Countries do not have friends, they have interests. That is particularly true of a small country which has successfully chosen to base its development and prosperity on being a trading nation. It is in our interests to be inside every European Council, committed to national budget discipline as one significant but far from exclusive part of a strategy to promote growth and job security in every corner of Europe. It is entirely contrary to our interests to take a reckless gamble now that would leave Ireland isolated, perplex our friends and exasperate those who are funding the State until we restore our capacity to do so ourselves. We have seen where reckless gambling has taken us and we do not wish to gamble our future again.
We are borrowing approximately €50 million a day to plug the gap between what we raise in taxes and what we spend. There is no escape from fiscal restraint in our current situation. To pretend otherwise is dishonest.
Voting “Yes” will give Ireland a safety net in terms of access to a special European assistance fund, if needed. A “No” vote may give the appearance of independence, but it could require Ireland to negotiate emergency funds that might have tougher conditions attached. I have lived in countries in which there was a default. It was not an experience I would recommend to anyone.
It is said truth is the first casualty of war. Experience tells us that truth is also a casualty of febrile political campaigns; that is particularly true of European referendum campaigns in Ireland. Here is one inconvenient truth that will be as valid the day after the referendum count as the day before, no matter what the result of the people’s vote is — Ireland is borrowing about €50 million a day. That cannot continue indefinitely. Voters have to decide if they want Ireland to have continuing, although conditional, access to European funds while we work our way through the tax and spending changes and cuts to eliminate the deficit and restore our independent capacity to fund ourselves in the longer term. I know we will experience a barrage of posters that will urge us to vote “No” to austerity, as if voting “No” could magically halt the austerity juggernaut in its tracks or reverse the disastrous bank and construction crash. It is irresponsible to hold out the false hope austerity can be avoided in a country that is so highly indebted. If we vote “No”, we will not have access to the European Stability Mechanism which provides a helpful backstop in the form of an additional line of credit. In the absence of access to such a credit line, we would have to move even more rapidly towards a balanced budget, involving adjustments far in excess of the tumultuous budgets of recent years. As Minister for Social Protection and somone responsible for spending more than €20 billion, even in this time of austerity, I am conscious of how many rely on the support of social protection. Voters would not forgive us for advising them to vote “No”, given that it would result in even more severe austerity and leave us without an important safety net.
This leaves voters with a classic catch-22 paradox. A “Yes” vote will give us a reasonable guarantee of access to funds, albeit under strict supervision. A “No” Vote may give the semblance of independence, but it will require Ireland to negotiate emergency funds that will have identical, if not even more onerous, scrutiny provisos. There is no escape, one way or the other, from fiscal restraint in our current situation. There is no honest realistic choice in front of voters that offers an easy escape from unpalatable budgetary measures. To pretend otherwise is to lead the country straight into a cul-de-sac.
This week the Taoiseach and IDA Ireland announced that US pharmaceutical company Mylan was expanding in Dublin and Galway, with the creation of over 500 jobs. It already employs over 700 employees here. US companies such as Mylan, PayPal, Sky and Facebook locate in Ireland for a number of reasons, including access to EU markets and the eurozone. That is the critical aspect about which people need to think. The eurozone is an important regional market in a globalised economy.
Deputy Joan Burton: Mylan ranks among the leading generic and specialty pharmaceutical companies in the world and provides products for customers in approximately 150 countries and territories. These are the companies Ireland needs to continue to attract. We need to attract foreign investors who, I am confident, prefer to invest in countries that are at the core of the European project. This is one of the most important considerations citizens need to think about as they decide how to vote in the referendum.
Deputy Joan Burton: Tomorrow I will be visiting the Employment and Advice Fair in Wexford. There will be 400 jobs available offered by both local and international companies such as Zurich Insurance. I want to see more of these international companies choosing to locate in Ireland.
Voting “Yes” to the Treaty on Stability, Co-ordination and Governance in the Economic and Monetary Union will show that Ireland is willing to play its part in building a more financially stable European Union. There is a mighty advantage in staying the course with the European Union. The signals from every corner of Europe are that collective action to boost growth and investment offers a much better prospect of restoring the health of national budgets than sole reliance on austerity. Such a pro-growth agenda should incorporate initiatives to relieve the cost of bank rescues, a particularly onerous burden on Ireland but a vital ingredient of a general mix to assist, for example, Spain. Bank debt is not exclusively an Irish issue. The arrival of Mario Draghi at the head of the ECB has significantly changed many aspects of that institution’s attitude. There is a lot more to be done to help beleaguered countries. We are far better off making that case with like-minded Governments inside the European tent rather than being a lone voice on the periphery.
As we have established in the course of the past 12 months, reputation means everything in the modern world. Political scientists call it soft power. It is the capacity to influence events and policies in the wider world that arises from the respect earned by national efforts and sacrifices to overcome a crisis. I represented the Government in New York where I attended about 40 events and venues. I received a strong message which was complimentary to the Irish people that we were doing our best to overcome the crisis.
An opinion poll reported in The Irish Times today finds that 30% of respondents are likely to vote for the treaty on 31 May; 23% said they would vote “No”; 39% were undecided, while 8% said they would not vote. That is a large number of people who have yet to make up their minds. Earlier today the Taoiseach, the Tánaiste and the Minister of State with responsibility for European affairs launched the Government’s stability treaty online public information campaign and website. This is the first part of what I promise will be a very vigorous and informative campaign. We will be posting a personal copy of the treaty to every household. The European stability treaty is just ten pages long and I urge every citizen to read it for himself and herself, but let me give a very short summary of what the latest European treaty is about. It is about the health of the euro in our pockets and the need to put it on a long-term stable footing. It is about ensuring foreign employers continue to invest here. It is about having an insurance policy that gives the country access to a special assistance fund, should we need it. It is about adopting a policy of good housekeeping which the country badly needs.
Deputy Joan Burton: The financial crisis that began in the United States in 2007 stemmed from US banks selling products to European banks. It crashed against our shores with a vengeance, culminating in the intervention of the IMF last year, and has now truly moved from the periphery to the centre of the eurozone. The very existence of the euro has been questioned by governments and markets. One factor people must take into account is that there are those, on both the extreme right and the extreme left, who have never been in favour of the development of the euro and might even be pleased if the euro were to go down. In this way, Ireland’s problems are now the shared problems of all eurozone and EU member states. We are living in historic times and while we all watch with anxiety and react to the latest dramatic developments in the eurozone debt crisis, we also need to stand back and think about the broader macro trends and historical forces that are behind the multiple crises of the past four years. When we do this, we see that the unifying factor is change: change in the balance of power in the world economy from west to east, in the relationship between markets and states, and in the speed at which events unfold.
The question for politicians and citizens in all European countries is how to preserve the European way of life, our cradle to grave welfare state and the inherent decency and democracy of our nations and our Union in the face of such world historical changes. Truly the onus is on all politicians and citizens in Europe to accept that to preserve and protect our way of life, everything will have to change, and now is the time to start changing for the better.
Europe needs an entirely new approach to economic development, innovation, competitiveness and how the welfare state is funded and delivered to citizens. We must radically change the relationship between states and markets. If the events of recent years have taught us anything it is that markets have become too powerful relative to states. Markets are supranational, while regulation remains national. A 28 year old with an MBA from Stanford or Harvard is on the markets every half hour. A second or two minutes is a lot of time to devote to Ireland. That is the way the markets are working now and we must take that into account. Governments and political parties react by having daily and weekly meetings. European institutions react by having weekly, fortnightly, monthly and quarterly meetings. The markets and the way government and politics are managed are on two different timeframes. Politics has not caught up. We must go further and fundamentally change the nature of finance so that it ceases to be “socially useless”, as the chairman of the Financial Services Authority, FSA, in the United Kingdom, Adair Turner, said last year and becomes instead a catalyst for the development of the real economy, technology, small business, infrastructure and employment. That will also require greater funding for public investment at EU level. We must radically change the nature and timing of political decision-making. Time and again the current crisis has exposed the variable speed of democracy and markets. Even if we succeed in restraining the velocity of market activity, we will need a fundamentally more efficient and certain method of political action.
I agree with the views expressed by Professor Seán Ó Riain from NUI Maynooth in today’s edition of The Irish Times that the stability treaty will help stabilise the euro in one’s pocket and help stabilise the banking, bond and stock markets. I agree even more strongly when he says true recovery “will require European governments and institutions to rediscover their historical taste for constructive politics and building European solidarity”. Voting “Yes” in the referendum is an important milestone on that path.
In response to the speakers from the Sinn Féin Party, when I was in the United States recently I noticed the efforts that were made there — absolutely legitimately — by people from both parties in government in the North, including Sinn Féin, to promote Northern Ireland as a location for investment. In promoting this country we must consider the advantages of being in the eurozone in terms of attracting important mobile foreign investment that is one of the critical engines for the growth of the economy both North and South. For that reason alone, voters must give every consideration to voting “Yes” in their wisdom to this treaty.
Deputy John Browne: I welcome the Bill which gives us an opportunity to reflect on our membership of the EU. It is also important — whether one is on the “Yes” side or the “No” side — that we have a constructive debate on the issues relating to the treaty and also the position of this country within the EU. Fianna Fáil will support the Bill. We look forward to campaigning for a “Yes” vote. We have always supported the concept of a united Europe and have always taken a pro-European stance in the past. Fianna Fáil has consistently argued in favour of holding a referendum to address the democratic deficit which is undermining EU efforts to tackle the crisis. We believe the treaty is a step towards addressing the economic crisis and, as such, we welcome it.
The Government is grudgingly holding a referendum having made every effort to avoid it by watering down the treaty, as was verified by the German Minister at the time of the negotiations. Cabinet Ministers have previously described the referendum as not very democratic, indicating a lack of respect for referring critical issues to the people. It is important that it was ultimately decided to hold a referendum. It is the only way forward. It is also important that the Irish people, who have made huge sacrifices in accepting reduced wages, disability cuts and extra charges in the past two years, would be given an opportunity to debate the issues and to have their say on the treaty. People around the country have made many sacrifices in recent years. A household charge has been introduced and water charges are to be introduced. The spend available to people has been reduced which involves people making many sacrifices.
We are a small island nation on the edge of Europe and if we are to progress further as a country we must continue to be at the heart of the European agenda. We have greatly benefited from our membership of the EU. We have benefited financially and in terms of equality, education, infrastructure, agriculture and working conditions. This was a different country prior to 1972. We have seen infrastructural developments such as new roads from Dublin to Cork, Dublin to Wexford and Dublin to Galway. We have benefited enormously in that respect.
One to the major changes has been in the area of working conditions. When I first began to work there were few legal requirements for working conditions, the work environment or overtime — in many cases for no extra pay. The new working conditions that were introduced on foot of our membership of the EU have greatly enhanced this whole area. We have also seen enormous spending in education and agriculture as another area in which we have benefited greatly. I accept we have a problem with unemployment, which is far too high in this country and across the European Union. I listened intently to the speech of the Minister for Social Protection, Deputy Burton. She referred to the multinational companies that are coming to this country. They are most welcome but, as the Minister of State, Deputy Alan Kelly, is aware, a significant number of people are long-term unemployed and find it difficult to acquire work.
When I travel around my county and the conversation turns to the EU treaty, people ask me what is in it for the unemployed and the less well-off. This is an area the Government must deal with in the next four to five weeks. Certainly, there have been promises such as in respect of the five-point plan and efforts to get people back into a work environment, but the measures do not seem to be working and must be dealt with as we cannot continue to leave many people long-term unemployed. Many of the long-term unemployed are still relatively young because they worked in the building sector and have found themselves with no job opportunities in the past four or five years.
Irish exports provide the success story. The figure for exports which amounted to €24.5 billion in 1998 rose to €35.1 billion in 2010. As the House will be aware, exports have reached a record level in the past year and the indicators point upwards, which is good. There are 500 million people within the European Union which offers opportunities to export more. There are also opportunities to become actively involved in other areas. Most of the exports are by pharmaceutical companies which is to be welcomed, but there are also significant opportunities in the food sector on which we have not yet capitalised, although there is considerable food production by farmers. The Food Harvest 2020 programme which was brought forward by the previous Government was adopted by the Government and there are great opportunities to develop the food sector and increase exports as we produce food in a green and clean environment. That is what Europeans are looking for. From the discussions the Minister for Agriculture, Food and the Marine, Deputy Simon Coveney, had in China in recent weeks, obviously it is what the Chinese are looking for also. For that reason, I welcome the fact that the Irish Farmers’ Association has come on board in favour of a “Yes” vote, as farmers have benefited enormously through farm payments from the European Union in recent years. CAP reform is coming down the tracks. It is important, therefore, that the passing of the treaty also reflects the fact that farmers will continue to benefit from the CAP because serious concerns have been expressed in this regard. However, as I stated, the IFA has now come out and stated clearly that the best opportunities for the farming sector in the future will be within the European Union and that we should be at the heart of it. As the House will be aware, there are 300,000 employed in the agriculture sector which is an important one. It is important, therefore, that we underpin agricultural production and that there be a successful outcome to the CAP negotiations. The Minister has travelled to Brussels, as both Deputy Moynihan and I have, for discussions with the officials involved to ensure the views, reflections and ideals of Irish farmers will be included in the talks on the CAP.
Overall, there is a need for a full debate on the treaty in the next four or five weeks. We cannot take things for granted. The opinion poll results today in The Irish Times show clearly that up to 40% are undecided, a big percentage. It is up to us pro-Europeans to convince the people that a “Yes” vote represents the best way forward for them. As I stated, we are an island nation on the outskirts of Europe and have benefited considerably from EU membership during the years. I have always strongly held the view that we must continue to be at the heart of European affairs. As the Minister stated, we have punched above our weight in this regard.
We must state clearly that the moneys that we acquired from the European Union were spent wisely. They were spent on the people through the development of infrastructural projects far beyond our wildest dreams 20 or 25 years ago. This was supported by the Labour Party, Fine Gael and Fianna Fáil and the majority of the people. The Fianna Fáil Party is strongly of the view that we should continue to be at the heart of Europe and reflect the views of the majority of the people at EU level. It is up to all of us, in the next four to five weeks, to canvas, tell the story as it is and point out to the people that we would be far better off in supporting the treaty and voting “Yes” to it. As I stated, it is important, both on the “No” and the “Yes” side, that there be a constructive debate, that there not be flag-flying with persons threatening each other or trying to pull strokes. That is not what this is about. It is about what is best for the people who will make their decision wisely at the end of May.
Few politicians in this House, either past or present, or any other elected body, have not at times questioned how the European Union is moving forward, but if we look back in time, we can see from where Europe came in the aftermath of the Second World War during which it was decimated and the ability of countries to come together to solve its problems collectively. Recently I read a number of books about Monsignor Hugh O’Flaherty who played a significant part in helping escapees in the Vatican and Rome during those troubled times. If one considers how difficult it was at the time when Europe was torn apart by fascism and a war, one can see that the citizens of Europe have benefited enormously from the entire project connected with the Common Market and the European Union.
In the past four years, since the crisis to which the Minister referred began in the United States in 2008 and then crashed into Europe with a vengeance, it has been an issue that the European system and institutions have been slow to react to put mechanisms in place to ensure the European Union is saved from the worst of the financial and economic crisis. It is vitally important, therefore, that we go out and sell the stability pact and fiscal treaty as being right for the people, as we have benefited enormously from being at the heart of Europe.
Given the democratic deficit in Europe about which my party has spoken, it is important that the treaty is put to the people in a referendum. When it was negotiated in December and being finalised in January, my party called for it to be put to the people because of the democratic deficit. We are delighted, therefore, that it is being put to them in a referendum. During the 1930s, when countries across Europe were falling to fascism, we put in place the Constitution of 1937 which we are now seeking to amend to facilitate ratification of the treaty. We should always recognise that our democratic institutions were strong at a time when other countries in Europe were doing otherwise. This is a lesson for them. The treaty aims to secure the euro which form a considerable part of the European project.
It is important that I, as the Fianna Fáil spokesperson on agriculture, indicate that it is vitally important for agriculture and the agricultural community, particularly the food sector, to ensure Ireland is at the heart of the European Union. Irish agriculture has benefited enormously since Ireland joined the then Common Market, or European Economic Community, in 1973. There are significant exports from the sector to other countries in Europe and beyond. In about one year we will be negotiating the new Common Agricultural Policy for the period post-2013 up to 2020 and 2021 and it is vitally important that we have a strong hand in the European Union.
During the years we have developed a world-class food sector. Primary food producers have worked tirelessly and borne the brunt of considerable regulations to produce a world-class product. We should acknowledge them and others in the farming community for the efforts that they have made to bring this about. As we look beyond Europe, we consider the importance of achieving the targets set in Food Harvest 2020, about which Deputy John Browne spoke, but also ensuring the Government and its agencies fight in the emerging markets for an increased market share. That is on the agricultural side, which is vital. Everybody in the agricultural community and those interacting with farmers and the farming organisations are very strong on this treaty being voted upon on 31 May. We must make every effort to ensure we get the message across that the interests of the agricultural community, which is now a huge industry, are best served by being at the heart of Europe.
In addition, Irish economic and political interests are best served by being at the heart of Europe. With regard to our economic interests, we have benefited enormously from being within Europe and we also benefit internationally by being the only English speaking country within the eurozone, which has allowed a huge amount of foreign direct investment to come to these shores. I am glad the Minister, Deputy Burton, when speaking in regard to being in the US and the many organisations she dealt with, made the point that we were all out there to sell the message. It is very important that Members and everybody else talk up the Irish economy. It is not that long ago the self-same Minister was using language that denigrated the Irish economy from other benches. That being said, it is important we speak about what is positive in our country in order to attract foreign direct investment.
Ireland is politically best served by being at the heart of Europe. Because of our being at the heart of, and firmly committed to, all of the European institutions, we are seen internationally as being part of Europe and, therefore, as being a more attractive location for foreign direct investment and in regard to many other issues.
To recap, I certainly will promote the treaty across the country and canvassing at any farmers’ meetings or agricultural meetings which will be held in the coming weeks. We will focus very strongly on the benefits and encourage as many people as possible not alone to vote for the treaty but to campaign for it also. This morning’s opinion poll in The Irish Times illustrated that this cannot be taken for granted. Some of the opinion polls that came out a number of weeks ago gave the impression it was a foregone conclusion. It is vital that we get out the message, in the first instance for our economy, growth and the ability to grow out of the present difficulties and circumstances. We accept there was a slowness within the European Union to respond adequately and that we need to put in place mechanisms. The flaw was inserted when the euro was first put together in 1996 and there are issues which must be addressed to ensure this treaty builds on the strengths of Europe to allow it to respond adequately and quickly.
The second point concerns agriculture, which has been at the very heart of Europe. Many countries are looking to the success of agriculture, which has been consistent in Ireland through the years. While other European countries were sidelining agriculture and food production, now that it has come into its own because of the perceived shortage of food within the world economy, Ireland is seen as a place to produce it, which is important for our agriculture and food industry.
It is vital we understand from where Europe came. Over the past century, two world wars were fought for control of Europe. The European Community, for all its flaws, has ensured generations upon generations of European citizens have experienced Europe without the difficulties and tragedies of war. As I said at the outset, many articles and books, including one written by a former Labour Party Oireachtas Member, Mr. Brian Fleming, in regard to Monsignor Hugh Flaherty, which is a fascinating read, show the difficulties that existed in Europe during and after the war period. We should always understand the huge political difficulties that existed, and the enormous tragedy and challenges that brought about the birth of the European Union. We should always strive to ensure that Europe and the European institutions are democratic and secure.
It is an easy soundbite to find the flaws. If anybody stands up at a public meeting, they are guaranteed to get a round of applause if they mention the EU directive on crooked or straight bananas or something nonsensical like that. That is not what we are debating. We are debating the very future of our economy and of the young people in this country, including the people who have been forced to emigrate and who we will try to get back to our shores. The only way we can do that is by having our small, open economy at the centre of Europe and by having a “Yes” vote on this very important treaty. I commend the Bill to the House and I commend the referendum to the Irish people.
Deputy Eamonn Maloney: I support the treaty and its contents, as I have supported EU membership in the past. In addition, I have always supported the proposal that we have a referendum on this issue, including before the correct opinion of the Attorney General.
I support the terms of the treaty for two principal reasons, one being that the euro is our currency. We decided on EU membership democratically and the consequences of coming out of or collapsing the euro are horrific. Therefore, in the best interests of all the Irish people, I support our currency, the euro. Second, I support the terms of the treaty itself, which is essentially about having national budgets which are balanced. That is a good thing, and I say that in the context of our experience of the past few years and the collapse of the Celtic tiger. I would have thought that, as Members of this Parliament, if we had learned anything from those years, people on all sides of the House would have appreciated the benefits of balanced budgets. We take in taxation and, accordingly, we spend our money. We should not go back to the days of Governments ratcheting up national debt or, as has happened in the past, Governments using public money to buy elections. That has been said not just by myself but by people to my physical left, who have argued in favour of people voting “No”, so, of course, they contradict themselves now.
If we have learned anything from the years of the Celtic tiger and its collapse, it is the need for regulation. This treaty, in fact, enhances regulation. It goes back to the question of whether we want balanced budgets. What is even more amazing — perhaps it is not terribly surprising — is that the people who purport to be on the political left, or, as I call them, the pseudo-left, would be opposed to regulation in regard to balanced budgets.
There is one issue in regard to any point that relates to European matters in this House, namely, there is a collection of people here who, irrespective of what the issue is in regard to EU membership, are opposed to it. These are the little Irelanders who never wanted to be in the European Union in the first instance and who have a particular frame of mind with regard to the people burning turf, dancing at crossroads and such things from the past. That is not what the people want and certainly it is not what industrial workers want. They want employment and investment and we will secure these under our membership of the EU. A previous speaker rightly outlined the benefits of EU membership for the farming community. Speaking as a Labour Party Deputy and an urban dweller, the EU has brought great benefits to industrial Ireland and its workers in terms of equal pay, safety at work and such issues. I believe these would never have come about or would never have been initiated had it not been for EU membership.
The use of the word “austerity” is the best those opposed to the treaty can come up with. I am convinced that some of them do not believe what they say in this regard. The treaty has nothing to do with austerity; in fact it is the opposite. However, if one is against the EU and one wishes to make some points or have a go at the Government, one invents something else. The invention of relating the treaty to austerity is false. It represents the depths of hypocrisy from the people who come to the House and try to convince the population that they should vote against it. These are the same people who were jumping up and down about the importance of a referendum on the treaty. However, they got pipped at the post, much to their disgust. There is great competition between Sinn Féin and the highly Technical Group to establish which would have the highest paid barrister in a court room. That was part of the competition but this time they have lost out.
The perception among the people of politicians in general is low. I have listened to some of the comments on the other side from those calling for people to vote against the treaty. I heard some of them refer to Anglo Irish Bank. However, most of them ran up the stairs in the House in September 2008 and voted to bail out Anglo Irish Bank and we are all aware of the cost of that. Bailing out Anglo Irish Bank has destroyed the nation. Yet these people come to the House now and try to tell us about the terrible austerity. They contributed to the austerity and they voted for the bailout, which should never have occurred. These people have no wish to be reminded of it. I recall a very good poem written by John Kells Ingram known colloquially as “Who Fears to Speak of ’98?” I put it to the people who voted for the Anglo Irish Bank bailout that they fear to speak of 2008. They have no wish to hear of their part in the bailout of Anglo Irish Bank in 2008. This is where politics stands. I support the treaty. I hope that in the interests of the people at large and especially those of the 400,000 plus who are out of work that the treaty is successful because there will be no recovery and no change without the help of those in Europe. Anyone who opposes it or who presents any argument in favour of its opposition, is guilty of nothing but humbug.
Deputy Seán Kenny: The treaty is about ensuring long-term stability and economic recovery, which will lead to growth and employment. The treaty is also about ensuring confidence abroad and maintaining and enhancing the influence that the Government has built up with investors, job-creators and those in Europe and the world. I take this opportunity to welcome the announcement yesterday of an additional 280 jobs in the pharmaceutical industry in Baldoyle in my constituency, Dublin North-East.
The announcements of job-creating investments in recent months have come about thanks to the renewed political and economic stability and, above all, thanks to the determination of the people, despite very painful sacrifices, to restore Ireland’s economic health. The past few years have not been easy for people but I believe Ireland has had no choice but to make certain decisions. Ireland must manage its debt such that over time, taxpayers’ money goes not into servicing debts but increasingly into public services and targeted growth initiatives to create jobs. The treaty is also about ensuring Ireland has access to the funding that allows these public services to function and to ensure Government spending is maintained. The Government is determined to return to the financial markets next year to raise money by itself again.
I do not agree with the arguments put forward against the treaty. The proponents of such arguments have put forward no credible alternative. Thanks to the Crotty judgment, Ireland is fortunate to be in a position that the people can vote on this treaty. However, if we vote “No”, as some advocate, Ireland will be left behind while the rest of Europe will proceed to work within the stability treaty. Ireland would be deemed incapable of making decisions within the wider European interest and it would suffer the consequences. Ireland would be left with no sovereignty and would depend exclusively on an IMF deal to keep the State afloat.
Have those advocating a “No” vote considered the view countries outside Europe might take of Ireland, countries that might be considering investing in Ireland? How do those on the “No” side believe Ireland would be perceived in the event of a “No” vote, given that Ireland is reliant on bailouts from the EU and IMF? What policies do those on the “No” side have to deal with political difficulties in the event of a “No” vote and to access to European Stability Mechanism funding if the EU economy is still under-performing and holding Ireland back? Voting “No” will not help Ireland’s recovery. If the stability treaty is about anything, it is about ensuring the great mistakes of the past are not made again. It is about developing a sustainable, fair and people-focused economy in Ireland and throughout Europe in which public money is available for public services and job incentives rather than paying down debt.
I have also heard arguments asserting that Ireland should leave the European Union altogether. This would be political and economic madness. Ireland would then be completely isolated, the new currency would nose-dive in value compared with the main currencies of the world and we would end up in an economic maelstrom such as that Argentina and Russia have been subjected to in the past two decades. If Ireland were to go down this path there would be no money available to spend on public services. In all likelihood, Ireland would require the assistance of the IMF and another bailout, run by the IMF alone. It would be far more unpleasant than the current bailout. If the course advocated by the “No” side were followed it would result in no money for decent public services in the short term. Our hospitals and universities would have no funding. Hospital services would be curtailed and social welfare payments would be slashed. I have no wish to see these things happen. The programmes advocated by the “No” side are nothing short of economic lunacy. I support the treaty.
Deputy Arthur Spring: I will do my best. The Treaty on Stability, Coordination and Governance in the Economic and Monetary Union is the proper title of what we are discussing. It is more commonly known as the stability treaty and this is an apt name. I have heard many of the contributions on the Opposition benches, although few have been reckless enough to support those in the “No” campaign, who claim this is an austerity programme and treaty. They should remind themselves that it applies throughout Europe and that 25 of 27 countries have ratified it. The majority of the people in these countries are not in austerity programmes. Therefore, one must conclude that the language is completely inaccurate and they are using it for the purposes of their political gain.
The third point to bear in mind is that we are seeking a solution to the problems that present. Some people seem to be taking an approach much like in the television advertisement where the person is wishing the television licence would pay itself. That is not going to happen. We must take the bull by the horns in order to address the problem. The reality is that the euro, the currency in which we engage in all the activities of daily life, is in a severe crisis and is being watched closely by the markets and the rating agencies. None of us could have envisaged that the crisis would reach this point. It is worth noting, for the benefit of the young students in the Visitors Gallery, the origins of the European project. It emerged in the aftermath of the Second World War, during which the Continent tore itself apart. In the years following that terrible failure of political engagement, it was agreed that the way forward was through trade, partnership and the establishment of common goals and purposes. From its beginnings in the Marshall Plan the Union has developed into an association that has enhanced trade and secured peace and stability for the nations of Europe.
I was originally opposed, for various reasons, to the establishment of a common European currency. I was privileged enough to be studying economics in Sweden at the time, under an eminent professor, Bo Södersten, who pointed out the problems he foresaw with the euro. I only wish I had been in a more influential position back then because Sweden, with all good knowledge, decided not to go into the euro and has since protected its capacity to grow. What we are talking about here is intergenerational debt. People older than I who sat in this Chamber have destroyed our economy and burdened me and my contemporaries with enormous debt. I do not want to see the next generation of Irish people burdened with the same debts. Looking at the treaty from this perspective, its promotion of prudence, good housekeeping and responsible fiscal policy are clearly to be welcomed. It is about hard work and ownership, and the hard work must be done by those with the bigger muscles and who are most capable of doing it.
It is important to clarify that nothing in this treaty will supersede our agreement with the troika. Before seeking external assistance, most of us associated the IMF with basket case economies in sub-Saharan Africa and South America where people were at war with each other. Now it is we who have lost our financial sovereignty and independence, with outsiders dictating to us what must be done if they are to continue lending us between €45 million and €50 million on a daily basis so that we can keep our schools and hospitals going and get on with civilisation as we know it. The treaty is about a commitment to the future in which our sovereignty is restored and a better standard of living is guaranteed for all members of our society.
As a Government, it is very difficult for us to put in place policies that are not populist. However, we are putting the needs of the country ahead of that of the political party. It would be easier to sit on the Opposition benches and ignore our responsibilities for the purposes of political gain.
Deputy Arthur Spring: Some people in the Opposition parties are being very irresponsible on this matter. On the other hand, I commend the Fianna Fáil Party which, unpopular as it has been in recent times, has opted not to destroy the country. It is doing the prudent thing by the people in this matter. However, there are some who are clearly opposing the treaty for their own political gain. That is reckless behaviour. The Sinn Féin Party, in particular, should be honest about the stance it has taken.
The troika deal is not exactly what we envisaged as the way forward for our country as we approach the 100th anniversary of the foundation of the State. It is a question of taking incremental steps. There is no pixie dust or magic wand to fix the problem or if there is, I have not heard about it. This is a complex issue and I strongly welcome the opportunity to put the proposal to the people by way of referendum. It will allow people to take ownership of the decisions that must be made by considering whether their preference is for stability or uncertainty. If the treaty is considered as a ship leaving port, with all of the European Union member states on board, the question is whether we have a lifeboat. Voting “No” in the referendum will deny us access to that lifeboat, in the form of the European Stability Mechanism, ESM, should we need it in future.
We are dealing with a complex issue, as is the case in respect of most Government business. For those with a less engaged attachment to politics, it boils down to a question of trust. Do they trust Fine Gael, the Labour Party, Fianna Fáil and the Independent Members who support this treaty or would they prefer to depend on Sinn Féin to run the country? Fourteen months ago the people entrusted us to fix the situation for the betterment of all citizens, including those who have had to leave the country seeking work. The treaty will not come into play until such time as the IMF has left these shores. I hope to celebrate that day with great aplomb. It is about confidence, not austerity; responsibility, not recklessness; and insurance, not blackmail. I am happy to canvass for this proposal and I urge colleagues to do likewise. The referendum date will be an important day in the history of the State. A failure to ratify the treaty will leave us in a position of enormous uncertainty, with an unclear road to recovery.
Deputy Finian McGrath: I welcome the opportunity to contribute to the debate on an issue that is hugely important for this country and for future generations of its people. As such, it is vital that we have a measured and calm debate. Putting a gun to people’s heads in the context of the horrific economic crisis we are facing is not acceptable. Instead, we must all keep calm, clear and reasonable heads. I am reminded in this debate of the historical treaty debates at the foundation of the State when the Irish people were threatened with war and dire consequences if they did not accept an agreement which divided this island with consequences of which we are all aware. Let us deal with the proposal before us in a straight and honest manner with a view to ensuring citizens have all of the facts. The Government should be truthful about the closet plans for the construction of a European super-state rather than seeking to con people with spin and misinformation. Those in favour of the treaty are not telling the Irish people the truth about the bigger picture, which is of a super-state with battle groups and other paraphernalia.
I stand for a Europe of nations working closely together, with Ireland having a strong and assertive independent foreign policy. That is what I stand for, clear and straight. It may not be popular or considered politically correct by some in the old establishment, but it is my clear position. Some of the language from Labour Party Members in the debate today is appalling, with words such as “lunacy” used in respect of those who challenge and oppose this treaty and references to the issue being used for political gain. What planet are they living on? There was also reference to “populist rants”. I will not take a lecture from the Labour Party on populist rants when that party played the most populist card of all before the last general election, with outlandish promises on a range of issues. There were commitments to reduce taxes, cut stamp duty, spend more money, and oppose water charges and household taxes. Its Members took all those positions in opposition but today they are lecturing us on the morality and ethics of populist politics.
It is not populist to challenge the political establishment in this country. It is not populist to challenge those who have a larger project in mind. In fact, it is sometimes a very lonely place to be. The Government’s policies of misinformation and scaremongering in regard to this referendum proposal are a disgrace and deserve to be challenged. I have taken a keen interest in the progress of this treaty and its complementary treaty on the European Stability Mechanism. The latter was authorised by an amendment to Article 136 of the Treaty on the Functioning of the European Union, TFEU, which still must be approved by all 27 member states in accordance with their respective constitutional requirements. The Tánaiste and Minister for Foreign Affairs and Trade has confirmed it is the intention of the Government to approve the amendment and the European Stability Mechanism, ESM, treaty that it authorises, by a vote of the Oireachtas following the referendum on the fiscal treaty and assuming endorsement of the latter by the electorate. I believe the proposed amendment to Article 136 of the TFEU puts economic and monetary union on a wholly new basis from that to which Ireland signed up under the Maastricht and Lisbon treaties and moves it closer to a fiscal union for the eurozone, with a range of supranational controls over national budgetary policy that are outside the European Union’s present area of competence. Ireland has a veto on this amendment as it requires unanimity among European Union member states before becoming EU law. This puts the Government into a strong bargaining position, should it choose to take advantage of it. However, because I contend that both the Article 136 amendment and the ESM treaty it licenses are in breach of EU law and in consequence are unconstitutional in Ireland, both should be put to a referendum of the Irish people in addition to the fiscal treaty.
I raise this point in respect of the details of this debate today. However, it also is important to challenge the manifestation of what I call the EU mindset in this House. I refer to those who are opposed to Ireland having its own economic independence or its own independent foreign policy, which is an important issue. Members of the Oireachtas have a duty to stand up for the Irish people and citizens. They have a duty not to turn their backs on their own country and to serve their own State and this is very important. The duty of any Senator or Deputy is to serve Ireland and its citizens and not any other wider project. That is their priority and should be done carefully. In respect of the broader debate, when the Referendum Commission issues its information pamphlet outlining both sides of the argument, I urge everyone to read both sides and to examine closely the sensible and objective concerns shared by many people. People do not like to be forced into a corner and do not like a gun being put to their heads in respect of Ireland’s economic policies. Ireland is well able to look after budgets and to manage its own economic affairs and finances and people must grow up about this point. I acknowledge we must be organised in respect of our finances and must understand the relationship between tax revenue and public expenditure.
I welcome this debate and urge everyone to calm down in respect of the language used, such as the use of words like “lunacy” by colleagues in the Labour Party. People should grow up and listen to both sides of the debate.
Deputy Maureen O’Sullivan: I will go back a number of years to refer to the very first decision to join the EEC. I was against that decision and over the years have been consistently opposed to that membership. Consequently, I have been against both the Nice treaty and the various varieties of the Lisbon treaty. I thought we were giving away too much of our identity and our sovereignty and that we were no longer masters of our own destiny. My fear always has been that we would be swallowed up by the bigger fish in the pond that is Europe. It is very important that this referendum be held, although it appeared for some time as though this would not happen. However, decisions of fundamental importance to Ireland must go to the Irish people. In two examples in recent years, namely, the bank guarantee and the bailout, decisions were made without reference to the citizens but citizens are paying for those decisions now. People are being given the choice and an interesting survey appeared in today’s edition of The Irish Times. It shows the referendum will be a major test for the Government, as it appears the outcome is wide open. According to the latest MRBI poll, the outcome appears to hinge on those who are undecided. I can understand people voting “Yes” because that fear factor is powerful. I believe it is significant that people over 65 are giving the treaty the strongest support. However, strongest support for the “No” side comes from the age cohort just younger than the over-65 age group. Another interesting point is that 66% of the pro-Europe side, who consider Ireland to be better in Europe, comprise the better-off and farmers, whereas those who are anti-Europe are the poorest voters. This statistic speaks volumes as the current economic and political policies certainly are creating more poor people in Ireland.
My fear is the fiscal compact is protecting the central national economies of the euro over peripheral economies such as Ireland. There is a huge question as to whether this firewall agreement is in Irish interests, particularly for those on lower incomes. There is a vagueness that could be significant for future interpretation and the fear is that France and Germany could bring pressure to bear to institute greater monetary and fiscal union within the European Union. In such a case, will this State bypass the Constitution? How many more restrictions will be placed on national budgets? In the meaning of the treaty, the Council issues recommendations to the member states concerned to correct the excessive deficit and gives a timeframe for so doing. Non-compliance with the recommendation would bring further measures including, for the euro area member states, the possibility of sanctions. How will Ireland cope with this? I refer to aspects of the surveillance of Ireland’s economic policies, as outlined in the Oireachtas Library and Research Service’s digest. Ireland certainly could have done with surveillance some years ago during the Celtic tiger years. However, those who should have been in positions of surveillance certainly did not so do, which has contributed hugely to the mess in which we now are in.
I can go along with aspects of the treaty. I agree there must be budgetary discipline, that debt levels must be reduced and deficits must be corrected. However, the problem is with the manner in which this will be done. People are told they must swallow a bitter pill but when someone is ill, there is more than one remedy for dealing with that particular illness. Europe will be dictating our budgets, tax policies, wages and pensions and Ireland’s economic policy will not be its own. If one considers the bailout, the main beneficiaries were those insolvent banks which had run riot. Was it not nice of Europe to give a bailout in order that those Irish banks would have the money not to default on their debts to the French, German, British and other banks, namely, those debts which were accrued during the binge of property buying more than ten years ago? Issues also arise in respect of voting weights which will be of serious disadvantage to Ireland.
It is interesting to read the views of various economists and politicians and to listen to the discussions of the sub-committee of the Joint Committee on European Affairs on the referendum. There have been those who were in favour, those who were against and an interesting group of those who are against the treaty but who will be voting for it. I refer to some of their arguments, which include the point that the fiscal treaty will require substantially more austerity measures in the medium term. There are groups which simply cannot take any more austerity. Moreover, the fiscal treaty will depress growth in the eurozone, which will have a significant impact on Ireland’s external demand. It will limit the measures future Governments may take during downturns and will undermine productive economic growth. Nevertheless, those who articulated such views still intend to vote for the treaty. One also has been told that regardless of a “Yes” or “No” vote, Ireland will have access to institutional funding. An interesting aside is that if Monsieur Hollande wins the French presidential election, he has other ideas on the fiscal compact. There has been a major emphasis on macro-economics but one cannot lose sight of the micro side. Euro fiscal restraint cannot be allowed to dominate over the real needs of ordinary and vulnerable people in Ireland and Europe. I ask whether there is a social compact to this treaty. I have read some of the documents produced by the People’s Movement and agree with them that Ireland has other sources of funding. I refer to Ireland’s oil, gas, lead and zinc resources, which are continually given away for half-nothing. I refer to the suggested progressive tax system, with particular reference to a wealth tax, as well as to one of the movement’s suggestions about renegotiating foreign debt.
Moreover, while there are times when people claim we must do what Europe wish us to do, there are other times when we are quite happy simply to ignore Europe. I have in mind a cause in which I am particularly interested, namely, blood sports, animal welfare and coursing. Although many countries in Europe do not permit such activities, we continue on regardless. I also am concerned about the military implications, because I am not sure that Ireland is not being drawn into something it will regret entering.
Deputy Maureen O’Sullivan: I have just come from a meeting of the Joint Committee on Foreign Affairs on the Global Irish Economic Forum. It was addressed by the Tánaiste and Minister for Foreign Affairs and Trade, who made many points about what he is trying to do in respect of job creation, economic growth and so on. However, I am not convinced that continuing in the present manner will bring about those things, even though there have been some successes. At this point in time, I intend to vote “No” but I will wait to see what the Referendum Commission produces. I will examine the exact wording and will then make a final decision.
Deputy Mattie McGrath: I also am delighted to have an opportunity to speak on the legislation on the Treaty on Stability, Coordination and Governance in the Economic Monetary Union. The latter is quite a mouthful in itself.
Like previous speakers, I wish to be as rational and as calm as possible during my contribution to the debate on the Bill. However, when one hears some of the accusations that have been levelled at Members on this side of the Chamber by those in the Labour Party and Fine Gael, one would be obliged to wonder whether others are being rational and calm. The treaty is quite a serious mechanism and I await the full documentation from the Referendum Commission in respect of it. I perused the list of those who are members of the commission and I accept that they are all eminent individuals in their own right. How are these people appointed and what qualifications do they possess? Why are lay people not appointed to the commission in order that some sensible proposals might be put forward? The result in one of the two most recent referendums was almost single-handedly affected by the actions of one Minister. I am glad that individual has come before the House in order to listen to the debate on the Bill. He is not on the phone and is neither texting nor tweeting. For once, he is listening.
I refer to the Minister for Justice and Equality who almost single-handedly sank the ship when it came to the referendum on Oireachtas inquiries. I hope the Government sends him on a holiday — perhaps he could return to Australia — and we can get someone to mind his house while he is gone. If he is not out of the country while the referendum campaign is taking place, I am of the view that the ship will sink again. The Minister has a penchant for uttering mealy-mouthed words and launching attacks on various individuals. During the previous referendum campaign, he attacked seven or eight former Attorneys General and stated that they were all wrong. That referendum was rushed and was opposed, for good reason, by the Technical Group. I was a Member during the lifetime of the previous Dáil and I am aware that an inquiry carried out by one of the committees became extremely political in nature. If we had achieved the type of inquiries the Minister had wanted, we might all be banished from this land for ever more.
The Bill before the House relates to the fiscal treaty. People in this country are entitled to a degree of fair play. Ireland joined the EU in 1973. I was in favour of it doing so and, as a young man, I campaigned for a “Yes” vote. I have also campaigned in respect of other treaties in the interim. Everyone is aware of what happened in respect of the Lisbon treaty. When we did not get the right result, the treaty was referred back to the people in a second referendum. Certain Ministers and Ministers of State have stated that if the fiscal treaty is not passed, it will be referred back to the people until it is accepted. Is that fair play?
I find myself obliged to ask whether the Government has even a shred of credibility left to it. During the past four years — and, in particular, during the 18 months prior to the general election — those who are now in government made various promises and launched many attacks. People voted for them on foot of those promises. On the previous occasion on which the representatives from the troika were in Dublin, they informed Opposition Deputies that, unlike Greece, Ireland is great because the Government has a huge mandate in respect of all the austerity that is being imposed. The Government does not have such a mandate. The parties in government campaigned on anti-austerity platforms. The Tánaiste, Deputy Gilmore, famously stated that it would be Labour’s way or Frankfurt’s way. The Government obtained its mandate under totally false pretences. How does it expect the electorate to support it in respect of this extremely important matter? The electorate cannot support the Government. To paraphrase the old saying, it is a case of “Fool me once and it is your fault, fool me twice and it is my fault”.
The people are sick and tired of trickery. They obtained the exact opposite of what they voted for in the election. They cannot take any more austerity. What they want is fair play and recognition. The first deal we obtained from Europe, the so-called bailout, was and remains a clean-out. We received reasonable interest rates from the IMF in respect of that deal but our so-called European friends sought to rob us. With friends like them, who needs enemies? The ECB is charging us almost 6% in interest, which is in the region of 3% more than the rate being charged by the IMF. However, it is loaning out money to others at a rate of 1% or less. Who is it codding? I contacted the previous Minister, the late Brian Lenihan — Lord rest him — on the fateful day when the bailout was agreed. It was the same day on which my late mother was buried. I asked Mr. Lenihan to come home and leave the deal on the table. We fell out over it because I knew that we were being cleaned out. I questioned him as to who had accompanied him to Europe to conclude the deal on the bailout and he informed me of their identities. Not one of them ever stood behind a shop counter, ran a business or worked on a factory floor in their lives. They are privileged people who do not understand how ordinary working people, ordinary unemployed people and ordinary small business people are obliged to live. It is always the privileged who go abroad to represent us in these situations.
The position is the same in respect of the Referendum Commission. Ordinary people are being both forgotten and disenfranchised. Both parties in government have given them the two fingers. Those to whom I refer voted for a particular set of promises in the election but they have been treated to the exact opposite since the Government came to power. As already stated, during the previous campaign the Minister opposite went on television and rejected the arguments put forward by all and sundry. According to the Minister, everyone except him was an eejit. He is Mr. Wise Man but he single-handedly sank the ship. The double act that is him and the Minister for the Environment, Community and Local Government, Deputy Hogan, will sink the Government. Their disdain for ordinary people is despicable. The Minister for Justice and Equality displays total arrogance towards Deputies on this side of the House each morning during the Order of Business. He fires across insult after insult at Members on these benches. He does so under the radar but nevertheless such insults are being levelled at people. Deputies on this side are being derided and being accused of all kinds of things because their views are different from those held by the Minister.
Deputy Mattie McGrath: The Government has a great deal of work to do if it wants to ensure the referendum will be passed. The arrogant attitude displayed by some will not be of assistance in that regard. The Minister has engaged in bullying in respect of a number of issues and he received an answer in that regard at the recent GRA conference. He was, again, very mealy-mouthed when he addressed the latter. Those present were very direct in informing him with regard to what is happening and indicated that some members of the force do not even have access to patrol cars. The Minister expects the people to vote in favour of even further austerity when gardaí in some areas do not even have access to bicycles.
I accept that the fiscal compact treaty is a serious document. I have not made up my mind in respect of it and I am waiting to see what we can extract from Europe. We have an opportunity to get something from Europe. Those opposite can laugh at me if they choose but, like them, I am an elected Member of this House.
Deputy Mattie McGrath: I object to the vitriol being directed at me from those on the other side of the House, with the exception of Deputy Mathews, who is a reasonable individual and who possesses a great deal more knowledge on this matter than me.
The Taoiseach: On 31 May next, the people of Ireland can allow the country to take another important step on the road towards economic recovery, stability and increased investment. The decision we will take collectively on the referendum on the European stability treaty will have serious and real consequences for this country and its people. There is a responsibility on all Members of this House, as elected representatives, to ensure that when people come to cast their votes, they will do so while in possession of all the information the require. It is very important that the people should be properly informed on all the relevant issues. The Government will certainly play its full part. It will do so in measured and honest terms and I hope that everyone else involved, irrespective of what might be their views, will do the same.
Ireland is on a very difficult journey to recovery. The adjustments we have been obliged to make in recent years have had an impact on every man, woman and child in the country. These adjustments have been painful but we are making headway. Our international reputation is being restored and our competitiveness is improving. The most recent official European Commission competitiveness statistics show that Ireland is now ahead of the EU average on almost every measurement. In recent months alone, numerous multinational companies have shown their confidence in Ireland by committing to new investments here. I want to continue and grow this strong flow of inward investment in the future and for our future. We are all working together with one aim in mind, namely, recovery and regaining control of our affairs. Each decision we make must be weighted against this vital goal. We must evaluate whether particular decisions will move us forward or set us back and whether our position will be more secure or more uncertain as a result of such decisions being taken. These are the questions we must ask ourselves. The Bill we are discussing is short, with two sections and a short schedule. It proposes simply that the Constitution be amended to allow Ireland ratify the treaty on stability, co-ordination and governance, and that constitutional cover be extended over Acts adopted under it. This treaty is neither too long nor too complex, with 16 articles in total and a few pages of recitals. The Government would like the people to read it for themselves, which is why we have sent a copy to every household in the country. Everybody needs to know what is involved.
The debate must be about more than words on a page. To reach an informed view, people must also see the new treaty in the context of the very difficult circumstances that have prevailed in the European Union and beyond in recent years. The euro is approximately 20 years old and was built on a set of rules and consequences set out in the Maastricht treaty and enshrined in the stability and growth pact. These rules were never perfect, although they were the best that could have been achieved at the time. They were designed to support a single currency that had yet to be created.
Experience has shown that although much was right — the euro was established and became a strong and credible currency — the necessary frameworks put in place were not strong enough to ensure sound budgetary policies across the Union, and they were not sufficiently robust to deal with the turbulence of recent times. The interaction between a serious sovereign debt problem in a number of member states and a wider crisis in Europe’s banking sector has resulted in a draining of market confidence in Europe and the euro. As this House knows only too well, confidence is essential to functioning markets and healthy economies.
Since the crisis broke, much has been done at the European level to set matters right. The rules of the stability and growth pact have been strengthened through the six pieces of EU legislation adopted through a fast-track process last year. Two more instruments aimed at guarding against future crises are making progress. We have put in place stability mechanisms; the first was the temporary European Financial Stability Facility, EFSF, and we will soon have the permanent European Stability Mechanism, ESM. Ireland has been among those which have benefitted from these facilities, and we have had experience of how those mechanisms worked. We have also learned the necessary lessons. There are now lower interest rates and more flexible instruments available than was the case when the EFSF was first set up. This has been and is of direct benefit to our country.
There is also an acceptance of the need for an equal focus on the drive for the generation of growth and the creation of jobs. This is something I personally advocated since taking office and I look forward to working with colleagues on the European Council in the period ahead to see that this is kept central to every European Council agenda. In all of this work we have been operating within the legal framework of the existing EU treaties. At the meeting of the European Council on 9 December last year, it was clear there was a wish for treaty provisions to provide for a new order to underpin confidence in the shared currency, and members were prepared to enter into an explicit commitment to run responsible budgetary policies and be held to account for doing so. The new treaty, formally known as the treaty on stability, co-ordination and governance in the economic and monetary Union, was negotiated with impressive speed and signed by 25 EU members on 2 March this year, and each signatory is proceeding with a process of ratification.
This is the context in which the new treaty must be seen. It is part of an ongoing effort to restore confidence and stability to the euro, the currency we all share. In drafting the treaty, we did not begin with a blank page and we built on the existing framework of EU treaties and law which already contain most of what is included in the new text. That is true of the obligation to run a balanced budget, set out in article 3, or the agreement to keep government debt to sustainable levels, as set out in article 4. Some aspects tighten existing provisions but the main innovation is the requirement to set these rules out in a binding way at national level and ensure there is a correction mechanism that kicks in automatically if there is a danger of breach.
Is this a recipe for permanent austerity, as some have asserted? It is not. It is simply an agreement among all concerned to ensure a balance between money raised and spent in the shared interest of the stability of a common currency. It will have consequences for Ireland but these are positive, meaning no future Government will be able to bring us back to the brink through reckless spending of the people’s money. Ireland’s current economic position is certainly very challenging, although we are turning it around bit by bit, but it is not without precedent. Many people in this country will recall the serious mess our country was in during the 1980s, when our debts threatened to drag us under. On that occasion, we managed to adjust our course before it was too late. The reckless boom-bust approach to economic policy making, as practised by some in the House on more than one occasion, cannot be allowed to happen again.
The Taoiseach: Through its commitment to a fiscal responsibility Bill, the Government has already made clear its intention to put in place the legislative framework to guard against a future disaster. That we are now doing so in tandem with our European partners should be very welcome to all responsible parties in the House who never want to see such a crisis again. The efforts we make in Ireland to restore confidence for investment and business in our country are working, and those thinking of making important investment decisions in the period ahead are naturally concerned about the wider prospects for European recovery. We need the picture they see to be positive, and this treaty will make a real contribution to ensuring that can be so.
When I work in various places around the world to promote this country, I am struck by how important it is to have a good story to tell, not just about how Ireland is today — bruised but recovering and looking to the future with renewed energy — but how and where we see ourselves in five or ten years. I tell people about our confidence in ourselves and abilities, our educated and dynamic young people, our skilled and flexible work force and our pro-business and “can do” attitude. I tell people that this country is one of ideas and ambitions, with a great future ahead. During recent visits to the United States and China, the consistent message from both political and business leaders has been that they see Ireland’s place as a fully committed member of the eurozone as a crucial element of Ireland’s attractiveness as a location for investment. When I visited China a number of weeks ago, the evidence of the interest in Irish firms exporting to China and investment here was exceptionally strong, and we must build on that.
The Taoiseach: As I have noted, with every decision we must carefully consider if it will move us forward or hold us back. That means we must enter into a serious and honest analysis of our position if we decided not to ratify this treaty. I have heard voices from inside and outside the House who, in urging a “No” vote, have deliberately and disingenuously played down the serious consequences of their proposals. They are doing the Irish people an enormous disservice. If Ireland remained outside the new arrangements, we would be the only euro area country to do so; although we would not be pushed from the euro, we would marginalise ourselves. There should be no doubt that this treaty will enter into force when 12 countries using the euro ratify it. There can be no question of preventing others from moving ahead without it, and the train will leave on 1 January next year.
Much has been made about the link between the new treaty and the ESM, and I am sure we will hear a great deal more about that in the debate ahead. It is logical that those prepared to offer financial support to others in a time of difficulty should be assured that those receiving it are prepared to run sound and sensible budgetary policies. I want Ireland to have the same access as other countries to the insurance policy of the ESM, which is a critical reassurance for investors and potential investors. The link between the new treaty and the ESM is quite logical but it makes the decision to be made on 31 May particularly serious.
The Government has made clear its intention to take Ireland from the programme it is in currently and back to borrowing on the open markets as soon as possible. For that to happen, we must continue to make the necessary adjustments at home. We need enhanced stability and a return to growth across Europe. Beyond that, we need to be able to convince those considering lending to or investing in Ireland that their money will not be at risk. I do not believe Ireland will need access to the European Stability Mechanism. However, saying this is wholly different from saying we can appear credible to the markets without access to some backstop. Having access to the ESM makes it less likely we will need such access. Locking ourselves out of it makes our case much more difficult to make. This is not a time for needless risk.
A moment of true consequence lies ahead for the people on 31 May. It is not an exaggeration to state the world will be watching. In deciding that the State can ratify the new treaty we will send a signal that will resonate well beyond these shores. It will send a strong, positive and confident message that Ireland is moving forward, tackling its economic problems, staying where it wants to be, that is, at the heart of Europe and in the mainstream of European development and progress, committed to a strong and stable euro and playing its part in bringing that about. It will say Ireland is a place where people can invest and create jobs with confidence and certainty and a country where future Governments will take prudent and sensible decisions and will not take risks with the well-being of the people. That is the true voice of people and the one I want to hear on 31 May. There is only one positive choice, that is, to vote “Yes” to investment, stability and recovery.
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