Speech of FF Leader Micheál Martin TD, Dáil Statements on the European Council

Published on: 26 March 2014

In the early days of what is now the European Union one of its founders, Jean Monnet, talked frequently about how it might develop.  The idea of his that is most often quoted is: “Europe will be forged in crises – and will be the sum of the solutions adopted for those crises.”  When looking at the outcome of last week’s summit and those of recent years it’s impossible to miss the power of this idea.

We are five years into the biggest crisis since the Union was founded.  A financial crisis became an economic one which has hit many millions of citizens throughout the Union.  The sum of the solutions adopted to tackle this crisis appears to have been reached – and the outcome is one which should worry anyone who cares about the future of the Union and its member states.

In recent weeks this has been joined by a dramatic escalation of a wider crisis which has many new economic, political and security dimensions.  The decision of Russia to first try to maintain control over and then annex a region of a neighbouring state is fundamentally a challenge to the idea that Europe is a space of peace and cooperation between nations.  It has reminded us all that there are very uncomfortable decisions to be taken if we are to be true to the values of democracy and human rights.  It has brought to the fore the absolute need to remember what unites us and put aside short-term concerns.

The decision of the Council to extend the list of persons subject to sanctions was a reasonable one.  In particular there appears to be real agreement about going to stage three sanctions if any further efforts to subvert Ukrainian sovereignty happen.  It was the least that could be done in the circumstances.

The debate at the Council was between those who wanted a more extensive list and those who wanted to do almost nothing.  It is welcome that Poland and other states were listened to during the meeting and the final communique was significantly toughened from the opening, and rather abject, proposal.

It would have been welcome if the Council had at least matched the list of sanctions published by the United States.  Those sanctions appear to have had a real impact on the private financial networks of people intimately connected with Russia’s expansionist policy.  Given the reach of the United States’ financial system and the legal force which they apply behind sanctions, the duplication of the list by the EU is not essential.

Because there have been so few occasions for welcoming the major outcomes of summits in recent years I think it is important that we acknowledge that leaders overcame the divisions between them of recent weeks.  They applied themselves to working together and seem to have understood that a failure to act together would have been disastrous for the Union.

In particular the contributions of Poland and the Baltic states were very valuable in reminding others that there comes a point where narrow commercial interests simply cannot be allowed to trump basic principles.

As I have said before, Fianna Fáil fully supports the government’s position condemning the illegal actions by Russia.  The Taoiseach and Tánaiste have left no room for doubt on this.  What is not clear at all is where Ireland stands on the specific issues which have been decided by leaders at this summit.  The Taoiseach told us yesterday that there were two different approaches proposed at the summit.  He then outlined the final agreement and said that Ireland supports this.  What he did not do is to say is what Ireland’s position was during the discussion.

There has been a concerted propaganda campaign by Russia to justify its actions.  The arguments which it is using today are completely different from those it was using at the start of the crisis.  Thankfully the number of parties and individuals falling for the Russian line, or who seem committed to staying silent no matter what Russia does, is small.  However it is worth putting on the record the response to their evolving arguments.

In recent weeks, and again yesterday during Deputy Adams’ contribution during Questions, Sinn Fein has been reluctant to utter a word of rebuke towards Russia.  They have now started the line that what is at issue is self-determination by the people of Crimea.  This really is a quite extraordinary argument.

There is indeed a majority of Russians in Crimea.  This has not always been the case.  It was an almost uniformly Tartar area until relatively recently and the current population balance is the result of what we now term ethnic cleansing.

The issue of Crimea becoming a part of Russia only became live when Russia decided that it would activate it.  It still has a powerful imperial mindset concerning its former subject states.  Once it became clear that the people of Ukraine wanted to assert their independence of Russian control Russia simply decided that it would partition parts of Ukraine where it felt it could sustain a majority.

Last week’s referendum was completely illegitimate.  It was held with Russian troops on the streets.  No dissenting voices were allowed.  Less than two weeks elapsed between the calling of the vote and the announcement of the result.  Independent observers were kept out by the threat of violence.  This included the firing of warning shots over the head of an Irish officer.

The belligerent speech of President Putin confirmed that this was an entirely planned annexation.  What we should also understand is that Crimea is now subject to deeply anti-democratic laws.  Due to a measure enacted in recent days it is now a crime to publicly question the annexation.  If you are a Tartar of Ukrainian in Crimea you can go to jail for saying you do not want to belong to Russia.

The invasion and annexation of the Crimean peninsula by Russia is the type of action which has not happened in Europe since 1968.  From the beginning to the end this was a manufactured situation.

The statement that Europe is somehow to blame by supposedly forcing Ukraine into a choice between Russia and Europe is outrageous.

I would like to acknowledge the work of the Committee on Foreign Affairs on this topic.  They do great work which is rarely given the attention it deserves.  In particular I would like to commend then for their session with the Russian Ambassador.  Deputy Bernard Durkan who was in the Chair, Deputy Eric Byrne and Deputy Brendan Smith made sure that aggressive propaganda was challenged.  In particular they made sure that implied threats were seen to have no impact on the views of the overwhelming majority of the Oireachtas.

The presence of large numbers of Russian troops on Ukraine’s borders is ominous, but it does not seem that there is any immediate likelihood of them annexing further territory.  In spite of repeated provocation, it appears that the Eastern areas of Ukraine have not been destabilised.

The red line which the summit drew, beyond which escalating economic sanctions would be imposed, is a restrained and reasonable response.  Any escalation will be because Russia has decided to escalate the crisis not because of anything Europe has done.

It was also correct that the Association Agreement with Ukraine starts first with the political aspects.

The undermining of Ukrainian democracy during recent years has been profound.  Wider civil society has suffered a sustained attack and democratic roots are weak.  Europe cannot compromise on its democratic principles and must hold the Ukrainian government to account.

The extremist elements who gained prominence during the last months of the Yanukovich regime are not acceptable partners.  Thankfully there are signs of democratic parties pushing back against their influence and we should do everything possible to support them in this.

In Europe’s aid programme it must prioritise support for civil society organisations who provide the essential counter balance to a political system which has repeatedly failed the Ukrainian people.

It was timely that a discussion about energy was on the summits agenda.  Given how often Britain plays a negative role at the Council and its repeated efforts to stop the Union becoming more active, we should note Prime Minister Cameron’s very positive initiative on energy before the summit.

Energy dependence on Russia is a profound strategic weakness for Europe.  The Russian state exerts a tight control on its energy sector and has repeatedly shown a willingness to see energy as part of its strategic arsenal when dealing with other states.

Now is the time for Europe to push ahead with a determined effort to secure real energy independence.  It must diversify both the sources and types of energy it uses.  It must end the practice where individual states are picked-off in highly suspicious ways.  This has blocked alternative supply routes and increased reliance on Russia.  Former Chancellor Schroeder’s lucrative job with the Nordstream project still leaves a bitter taste in many mouths.

I welcome the summit’s decision to show more urgency on energy independence and hope that this resolve will be maintained.

The summit took place against the backdrop of ongoing negotiations between with the European Parliament concerning key elements of the so-called banking union.

The Parliament’s position that the resolution mechanism agreed by leaders is inadequate is absolutely correct.  It involves too little money, too much national involvement and not enough banks.  By covering no more than 1% of covered assets, and then only after a lengthy lead-in time, it does not provide a credible resolution mechanism.  By only phasing in mutualisation it specifically fails to break the link between sovereign and financial debt.

The few concession secured by the Parliament are extremely welcome.  They somewhat dilute to worst elements of the Council’s deal.  For this I would in particular like to acknowledge the leadership of Sharon Bowles of our ALDE group.

Overall nobody can say with confidence that the Eurozone financial system has been placed on sound foundations.  We still have a single currency without a genuine banking union.

What is much worse is that we are heading into bank stress tests without the confidence that genuine and tough results can be managed.

ECB President Draghi’s letter to Fianna Fáil’s spokesman Deputy Michael McGrath shows that the government’s complacent line about everything having been sorted is false.  The Draghi letter confirms that there are serious issues remaining relating to Irish banks.  There is no engagement with the idea of retrospective recapitalisation.

Yesterday I directly asked the Taoiseach if he would state what Ireland is looking for in this regards.  Just as he has done for a year and a half, the Taoiseach refused to say anything.

A year and a half after the Taoiseach and his ministers announced victory on bank debt they have not only achieved nothing they will not even say what, if anything, they are asking for.

It is now well established that the decisions of Mario Draghi have been far more significant for our economy than any taken by this government – particularly as it waited three years before announcing an economic policy.  President Draghi’s commitment to fight against threatened deflation is very welcome.  We should note also the news yesterday that the head of the Bundesbank has indicated that he would not oppose Quantitative Easing in all circumstances.  This is the first time that he has, on the record, said that the ECB could buy government bonds at issuance.

Instead of sitting on the sidelines Ireland should make a clear statement that it supports President Draghi’s initiatives and that it believes that QE is an appropriate response to low growth and threatened deflation.

Promissory Note Deal
There is however a further major threat to Ireland emerging.  From the very moment the conversion of the Promissory Notes into sovereign debt was announced by the government my party has been pointing out that the ‘deal’ is worth nowhere near what was being claimed.  As recently as December Minister Donohue was involved in inflating the claim even more when he announced on the radio that the promissory notes had been “ripped up”.  Nothing of the sort happened.

Today a very serious piece of news has been reported by the Irish Times.  It is right that the appalling behaviour of Minister Shatter and the Taoiseach’s continued support of him have dominated public attention in recent days – but we cannot let other, potentially dramatic, news pass without reference.

It is being reported that there is new pressure from the ECB Council on the Central Bank of Ireland to sell its holding of Irish bonds.  If this were to happen billions in interest on the bonds issued to replace the promissory notes would be lost to the state.  Every single positive economic impact of the arrangement announced last year requires the Central Bank to hold these bonds as long as possible – preferably to maturity.

Taoiseach, you owe it to us to explain what is going on.  Are you aware of these pressures to sell the bonds?  Have you made any intervention?

If this happens a central plank in the government’s claims will have been destroyed and Ireland will lose billions which should be available for public services.

The sum of the actions agreed to tackle the financial and economic crisis shows a generation of leaders committed to finding a way of muddling through rather than addressing core problems.  The lack of leadership remains striking.  In the discussions about who will serve as Presidents of the Council and Commission, we don’t need a ready-up between the big parties we need people of drive and vision.  

People who want to reform and develop Europe and end the damaging policy of maximising disputes and minimising ambition.  Given that these positions will set the basic direction of the union for the next five years, I believe that the Taoiseach owes it to us to come to the House before the informal meeting on May 27th and outline his views.  It will not be acceptable if all we get is another case where our government waits to hear the outcome before it tells us what it is seeking.

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