Speech by FF Leader Micheál Martin, post European Council statements

The statement which the Taoiseach has just delivered claims that the last six months has seen enormous progress.  Even more than is usual for a government given to daily praising its own actions, he has presented a picture of ministers having delivered Europe to a new frontier.  The Union is, he claims, growing stronger because of this leadership.

In the middle of this it is striking just how much the Taoiseach hasn’t mentioned.  In his review of the last six months he has managed to completely ignore the fundamental direction of the European economy.  He has declared himself absolutely satisfied with what has been achieved – yet the citizens of Europe see a very different picture.

During the last six months growth rates have fallen, recession has returned, unemployment has reached record levels and sovereign bonds have experienced their fourth worst month in over twenty years.

The evidence is overwhelming that the policy of coordinated austerity in all parts of Europe has failed and will keep failing – yet the response has been to double down on the policy.

The Taoiseach’s primary argument is that it is a great success to have closed as many files as possible.  It a “never mind the quality feel the width” approach which sees reaching agreements as being more important than what is in them.

If you look at President Van Rumpouy’s presentation to the European Parliament last year when he laid out the work programme for 2013 you see that the agenda is exactly as proposed then.

In normal times this would have been unexceptional, maybe even a welcome sign of stability.  But these are not normal times.  The scale of Europe’s problems requires an urgency and ambition completely absent not just during our presidency, but over the last four years.

Nothing done in the last six months will in any way change the direction of Europe.  It will not create a new effort to achieve growth.  It will not address any of the deep flaws in the work of the Union which helped create the crisis.

Ireland has delivered agreements to keep the push for austerity even where countries have an alternative, to cut the Union’s budget, to have those cuts focused on the Union’s most important programmes and to keep the link between sovereign and financial debts.

If the Taoiseach is satisfied with this.  If he thinks that Europe has turned the corner, then he’s spending too much time reading his own press releases.

Because of the Lisbon Treaty changes the duties of the presidency were significantly smaller than in the past and the absence of the major 2004 accession helped ensure that costs could be significantly lower.

Even with these changes the work of a presidency has a major impact on all states, not the smaller ones.  Ireland has always handled them well because we give our best people responsibility.  Every presidency since our first in 1975 has been administered well.  The daily work of our officials is unequalled by those of any other country.  Not just in the Department of Foreign Affairs & Trade, but throughout government, officials have carried a heavy responsibility and delivered an impeccably administered presidency.  This work has rightly been praised in all parts of the Union.

However for a presidency to change the direction of Europe it requires political leadership.  This has happened in the past, at a time when the presidency was a much larger challenge.  The 1984, 1990, 1996 and 2004 presidencies each involved the Taoiseach and Minister for Foreign Affairs achieving major moves forward on fundamental constitutional change within the Union.  The 1984 and 2004 presidencies in particular led the Council to overcome the belief that it was incapable of agreeing anything significant.

The Taoiseach claimed this morning that Ireland had “overwhelmingly” delivered on its presidency objectives of ‘stability, jobs and growth’.  Certainly there has been a stability to the agenda, but with growth and employment forecasts for the next few years cut, the claim to have delivered on jobs and growth is clearly not true.

A deflationary budget which cuts vital programmes will not deliver jobs and growth.  The refusal to change existing economic policies will not deliver jobs and growth.  The maintenance of deep structural flaws in the Euro will not create jobs and growth.

A defining characteristic of this government from the start is the amount of time it puts into public relations.  ‘Politics before policy’ is its only consistent strategy.  This has been brought to new levels during the presidency and, in particular during the last week.

The Taoiseach has developed a deserved reputation for being the most partisan ever holder of his office.  He finds it impossible to acknowledge the achievements of people from other traditions from either the recent or distant past.  Where predecessors of different parties saw their role as having a substantial national role above party politics the Taoiseach has completely rejected this.

He has now added to this and become the first Taoiseach of any party to use a presidency of the EU to play domestic political games.

He started this earlier in the year when he went to London and delivered a series of partisan speaking points to an academic and business audience.  Last week he went much further and showed that for him electoral politics always comes first.

The Anglo Tapes have rightly caused a public outcry. When faced with this the Taoiseach’s first and overwhelming instinct was not to address the issue at hand but to find a way of politicising it.  Absolutely nothing in those tapes has implicated any politician in the appalling behaviour they reveal.  Yet the Taoiseach decided he needed to start smearing people with crass innuendo and clearly false assertions about what information has been released to the public.

The Taoiseach has repeatedly said he knows nothing about what happened when the Bank Guarantee was brought in.  He says he would “love to know” what happened.  If we put aside the lengthy statements and interviews, including in this House, this claim of the Taoiseach’s is transparent, partisan nonsense.

For two and a half years he and his ministers have been in full control of government.  They have had absolute access to the many records of events, particularly those contained in all of the documents retained in the Department of Finance.  More importantly they have had access to the officials who were present at all stages of the Guarantee process. Minister Noonan has actually refused to release some information under FOI so Taoiseach you cannot have it both ways.

In the Taoiseach’s case, for an entire year he had at his side the most senior official present during that night.  Is the Taoiseach expecting us to believe he never asked him any question about the meetings he attended?

The next most senior official who was in the room that night also worked closely with this government for well over a year.  He regularly attended the Economic Management Council with the Taoiseach, Tánaiste, Minister Noonan and Minister Howlin at which bank-related debts were discussed.  Did you ask him no questions during that time?

If the Taoiseach actually believed his own smears he would have used his complete access to officials and records to put the information into the public.  For two and a half years he has done nothing of the sort.  Much worse he has taken no action to put in place any form of independent inquiry to produce the information he says is urgently needed.

I have no doubt whatsoever that those who the Taoiseach seeks to slur acted in good faith and on the basis of the best available information. They reached the same conclusion as the Taoiseach himself reached and he has not produced a credible alternative to what they decided that evening. His decision to take the low road reflects more on him than them.

His first preference has always been to make an inquiry as political as possible and to take as long as possible.  When the Oireachtas inquiries referendum was defeated in 2011 because people didn’t trust this government with the extra powers it was seeking there were many alternatives open.

None of them have been taken.  This is not because of the need for any advice, it’s because it was decided that the only inquiry Fine Gael and Labour want is one which can be trusted to be controlled directly by them.  They don’t want to risk an inquiry which doesn’t support their political agenda.

Of course one of the things the Taoiseach particularly doesn’t like talking about is that he himself voted for the same guarantee he says was the product of ‘collusion’.  He sought outside advice and in the cold light of day supported it.  He also went to his own private briefing at Anglo Irish headquarters and admits to believing that the bank would survive.

Last week in Brussels the Taoiseach was eager to make this issue as prominent as possible.  The majority of the Cabinet was sent out to deliver snide personal calls on people to supposedly “reveal” information that is already public.  The Taoiseach himself was eager that the focus be on implying government collusion and that it be seen as a particularly Irish issue.

It’s very striking that Chancellor Merkel in her reasonable comments took a completely different approach to the Taoiseach’s.  She directed her comments not just against Irish bankers but against the mentality in many parts of the industry throughout Europe.

I have looked at the record relating to the three previous leaders of Fine Gael who were Taoisigh during our presidencies.  In no case have I been able to find anything which comes close to the cynical party politics the Taoiseach displayed last week.

And the scale of this cynicism becomes more evident when you see that last week Ireland was confirmed as having returned to recession.  Its two years since the Taoiseach started claiming to have delivered growth, but four of the last five quarters have seen the economy decline.

Most people would have expected the Taoiseach and his Ministers to give a response to this and to explain what their strategy is to reverse the new trend.  But they had nothing to say.  They ran away from the microphones when asked about the return to recession but were seeking out every opportunity to talk about 2008.

Fundamentally this is a government more interested in exploiting the past than learning from it.

It wants to keep refighting the last election and is happy to find some that support them in this.  What is increasingly clear is that it is not helping them halt rising levels of dissatisfaction and falling levels of trust.

European Semester

Last week’s summit signed off on the last part of the country-specific for economic policy.  These recommendations entrench current orthodoxy.  They do not call on countries that have to ability to stimulate their economies to do so.  They leave Europe with an economic policy which claims that freer trade and lower regulation are all that we need to deliver competitiveness, jobs and growth.

The documents agreed last week contain no hope of a new direction and no answer to the rising evidence of a deeper economic downturn taking hold in Europe.

MFF

The need for an urgently arranged final meeting involving the heads of the different institutions proved that the budget deal announced the previous week was no deal.

It is welcome that there is political agreement on a budget but there is no circumstance in which Ireland should welcome this budget.

No matter how the Taoiseach spins it, the MFF will hinder not help growth in Europe.  It implements a cut in the EU’s already low share of the European economy.  By definition cutting spending will be deflationary.  Even more seriously, in order to fund some new areas existing ones are to be cut severely.  The rural economy will feel this most, but so too will sectors which were relying on Europe taking a leading role in promoting growth through innovation.

The €6 billion youth employment fund has been improved because of the Parliament’s demands, but it is still wholly inadequate.  It is not large or focused enough to make a major difference in any country and over-selling it is foolish.

CAP

Last week’s agreement on the CAP is welcome because it does less damage than was originally feared.  The 10% cut to overall funding which was agreed by the Council will cause serious problem.  However, we welcome the fact that the Irish Presidency withdrew its earlier position of skewing the budget towards larger units and away from the core social and environmental role of the CAP.

Banking Union

In relation to Banking Union, the spin about last week’s deal on the ESM and resolution mechanisms has already fallen apart.  This deal does not do what is claimed. The Economist wrote after the deal that no matter what the politicians were claiming “the poisonous link between weak sovereigns and weak banks in the euro remains intact”.

The Financial Times went into more detail yesterday by writing:

“ It kills the last chance of a resolution that could have ended the depression in the eurozone periphery. In the brave new world of the EU’s resolution regime, all risks will be shared between various categories of bank creditors, which are mostly domestic institutions, and the banks’ home states.

The European Council…. has long become silent on the ceremonious pledge, made in June 2012, to break the link between sovereigns and the banks. Last week’s agreement did not break it. It has not even been diluted. It has been reconfirmed .”

Even the Irish Times today points out: “ As yet there is scant progress on breaking the vicious circle between banks and sovereign states which so excited the Government last year.”

Some ministers are claiming that the effort to secure ESM funding retrospectively for Irish banks has been damaged.  What they have not done is to explain what Ireland has been seeking.  Minister Noonan told a Dáil committee last year that he couldn’t see the benefit from selling our bank stakes to the ESM.  Has this position changed?

During this presidency Ireland fulfilled its core responsibilities well.  It handled the agenda it was given by President Van Rumpouy and delivered the required agreements to keep most of the items on track.

But at the end of the presidency Europe has not returned to stability, jobs and growth as the Taoiseach keeps claiming.  Our political leaders did not try to change the agenda.  They did not try to push a move away from failed policies or towards badly needed reforms of the Union.  Nothing was done which gives any sense that Europe is actively working to help its 27 million citizens who are unemployed.

Truly a lost opportunity.