This week’s summit has a number of important items on the agenda but only one will receive any real attention. The formal signing of the Fiscal Treaty will be accompanied by further discussions about the economic crisis. While the sense of panic which prevailed during most of last year’s summits is absent there is still and unmistakable sense of crisis. My biggest concern is that this sense of crisis is clearly accompanied by the urgency and ambition which Europe needs.
The agenda is a partial agenda which will not tackle the recession or restore confidence.
The Fiscal Treaty is not the answer to Europe’s problems – but it is part of the answer. The question for the Taoiseach and the government today is are you willing to start demanding the other measures, ones which can return Europe to growth? If you’re not, then you will sooner rather than later face a much bigger crisis.
There is a sense of complacency in the agenda for this summit, with minor initiatives being over-sold yet again.
The government’s decision to agree to hold a referendum is welcome. It is at best unfortunate that this decision took so long and gave the clear and unmistakable picture of trying to find a way of not consulting the people.
This is a government which puts great store on media management. It is increasingly clear is that no matter how slick and controlled the launches and speeches are the public are not convinced. There is a large and growing gap between the view promoted by the government in the Leinster House bubble and the opinion of the public.
The addiction to over-spinning and over-claiming on nearly everything has been seen through. We heard more of the same yesterday in the Tánaiste’s contribution, where the unrestrained self-praise was exactly the wrong tone to start a process of trying to win the people’s support.
This is what we saw last year when a Greek debt deal was extended to Ireland and hailed by ministers as a great negotiating victory even though it was four times the size of what they had asked for. It’s exactly the same approach which emerged in this morning’s papers, with ministers trying to claim this referendum as part of an ingenious negotiating strategy concerning the promissory notes.
Saying that the government is “putting it up” to other governments is nothing more than empty posturing.
It’s fooling no one and it has returned levels of distrust in government to levels the Taoiseach himself condemned as unacceptable.
When this Treaty is signed it will be almost eight months since it was agreed by Europe’s leaders to look at new treaty provisions. It was prepared in a rushed process which limited ambition and maximised disagreements. The biggest problem in Ireland has been that the government chose to have no public or political consultation. It would not even tell the Dáil what its negotiating objectives were.
Allied to this was the undeniable evidence from sources here and in Europe’s capitals that every effort was being made to avoid a referendum.
It would have been much better if it had accepted my proposal of three months ago to say that the needs of democratic legitimacy would prevail. A referendum was always necessary irrespective of what the legal opinion said.
The government has yet to publish the Attorney General’s opinion. It should do so immediately because it will provide crucial information about the impact in Ireland of the Treaty’s provisions. From what the Taoiseach said yesterday it is clear that the referendum is legally required because of not being a full EU Treaty and the significance of the requirement to have “permanent” budget rules in national law. This is exactly in line with the legal opinion which Fianna Fáil received.
My party’s position on Europe is and always has been absolutely clear. We believe in a strong European Union. We believe it has been a great force for peace and growth. Our supporters have been absolutely consistent in supporting each European treaty and supporting our pro-EU position.
A Euro-positive position is a core part of our tradition and this will not change.
I held a detailed discussion in our parliamentary party about our approach to this international treaty. I did not impose my opinion but I did set out a detailed case secured endorsement of it.
In accordance with a tradition which goes back over 50 years, in line with the views of our members and supporters – and following a democratic decision of our parliamentary party, Fianna Fáil will support ratification of this treaty in the Dáil and in the referendum.
We will support ratification for a number of reasons.
Firstly, it is part of an agenda to show that Ireland and Europe are dealing with the escalating sovereign debt crisis. It is not a magic bullet which will tackle the crisis but it is a confidence building measure.
Secondly, it provides access to a reserve of back-up funding which will help Ireland to return to the market and do so at a lower interest rate. There is no other funding available if we cannot access the market or do so at an affordable rate. In terms of funding deficits and securing normal refinancing we need the ESM and, therefore, we need the Treaty. If the impact of the Government’s VAT increase continues as we predicted to drive down growth and undermine the budget, the ESM may become vital to funding public services in the next two years.
Finally, we support the introduction of fiscal rules. They make sense and I have not heard a credible argument against them. It was the late Brian Lenihan which first put them on the Dáil’s agenda in the first half of 2010, well before the EU/IMF deal. He subsequently brought to government an in-principle agreement to proceed with fiscal control legislation and an independent fiscal advisory council. The rules contained in the Treaty closely reflect what we supported before and we’re not going to switch our position.
Each of these is a positive reason to support the Treaty. Which stands in contrast to the tone which government ministers have set in the last two months. This Treaty will not pass if it is sold in an aggressive way. People must be given positive reasons for supporting it. They must be shown that it is both a part of the agenda to restore growth to Europe and ensuring that Irish public services can be funded.
The standard line being used by its opponents is that it is an ‘austerity treaty’. It doesn’t matter how often they repeat this, it’s just not true.
There is a major gap between tax revenues and spending on public services. This has to continue to be reduced. It is nothing less than dishonest to claim that we can carry on regardless or that everything would be easy if we defaulted on a bit more debt. It is a classic piece of political cynicism to come in here and claim there is an easy answer – that the money would just be there to pay pensions and keep services going. That’s nothing more than the politics of exploiting people’s problems.
There are four more budgets in the life of this Dáil and none of them will be significantly tougher because of this Treaty. In fact, they may be easier. If the Treaty helps to keep our costs of borrowing down then it will provided significantly extra room to maintain public services.
Saving the Euro
A core justification for the Treaty is that it will help save the Euro. It cannot do this by itself, other measures are also needed. What is surprising is that the government has yet to actually set out a case for why we should retain the Euro.
The overwhelming evidence is that any attempt to adopt a new currency would make the current crisis look like a boomtime. The transition to any new arrangement would be deeply traumatic and it is ordinary people who would feel bear the brunt.
However, we need to push this reasoning to the side – membership of the Euro cannot be sold on fear alone. What can the Euro’s long-term future be if its main justification is that countries have no alternative and are trapped? Fostering resentment of a currency amongst the people who use it is not a way to secure its future.
There is a positive case which can and must be made for both the success of the Euro and its future. The evidence shows that the Euro has enabled significant growth throughout the Union which has been maintained even after the declines of the last few years. Of course some of the countries who have benefitted the most have been rather reluctant to acknowledge the Euro’s role.
In Ireland the story is even clearer. As I said in the House before, For example, a study released in December by ESRI and Trinity researchers concluded that the adoption of the Euro has had a significant and positive impact on our exports to all regions which has increased over time. They showed how it has given a boost in markets which ranges from 30 to 60%. Given the centrality of exports to our economy this is by itself a very powerful argument for saving the Euro.
Without the Euro, our already too high unemployment would be dramatically higher.
The Ratification Agenda
The key part of securing the people’s support for European treaties has been work to provide clear reassurance on legitimate areas of concern. In each ratification process additional measures have been adopted which go beyond the core text.
These measures are never enough to satisfy Europe’s opponents – they see a conspiracy in everything. They don’t care what arguments they use or who the work with. This is how in the Nice referendum for example, you could end up with a situation where leftwing groups and Youth Defence could sit down under the coordination of Anthony Coughlan to discuss how to help each other.
Where they always get caught out is that they never change their arguments to reflect the proposals before the people. In the first Lisbon Treaty they said Ireland’s loss of a Commissioner was fundamental, in the revised proposal they said the retention of a Commissioner was irrelevant.
After the 2008 referendum I face quite an amount of pressure to try and find a way of avoiding a referendum. I rejected this and secured agreement to engage with the people and reflect their views in a significantly revised proposal.
It is not true that the Yes vote always declines during a campaign. As we saw then, it can actually increase if the people are properly engaged.
Sinn Fein and others are trying to sell the idea that the claims about jobs in the last referendum have been proven false. This is nonsense. Ireland has too high unemployment, but it would be much higher if we had rejected the revised Lisbon referendum. Unlike Sinn Fein and others here I have actually spent a lot of time talking to major investors in Ireland. Every single one of them said to me that investment in Ireland would be lower if we stepped-away from the tradition of joining with the advances of the European Union.
Deputy Adams came in here a few months ago and made the incredible claim that his party had been right about Europe for 40 years.
Frankly, if you want to attack others for their claims during referendums, maybe you could tell us where the nuclear missiles are that you said would be rumbling down O’Connell Street? Where is the conscription that you have spent 40 years telling us was around the corner? Where is there a single major employer who says they’ll hire more people if we oppose Europe?
Having wasted months, the government needs today to commit to a programme of real, non-partisan, engagement with the public. They need to put aside the aggressive politics which they have introduced into to European debates and start a genuine engagement with other pro-Europe parties and the public as a whole.
It is mildly ridiculous that the government has spent a year claiming that the standing of Europe had been destroyed but has launched only one new EU information programme. This is worthy, but it is directed at children under-12 and not central to the debates of today.
I want to acknowledge that the Taoiseach has in the last fortnight engaged very constructively. I welcome this and I want to call now for a specific series of measures which we should discuss and introduce before the referendum Bill is passed.
It is the duty of the Government to publish a detailed white paper which will set out all of the issues concerning this Treaty and its impact. This must be done well in advance of a second stage debate. It should also move quickly to empower the referendum commission to begin preparatory work.
The ratification Bill must be accompanied by measures which show that this is not the end of the process. There must be measures concerning growth and investment – there must also be a commitment to never again negotiate a treaty in this rushed, secretive and incomplete way.
Therefore we believe a formal EU Consultation Bill should be introduced which sets out a process by which the public and the Dáil will be guaranteed a right of consultation in treaty negotiations. We introduced a similar measure relating to EU legislation, and this is making a big impact. It should not be the case that the only area where consultation is not required is the most important of all.
Finally we believe that the Oireachtas should adopt a formal negotiating mandate for the government to seek further treaty changes targeted at the clear design flaws in the Euro which are suppressing growth and employment. This is something which is done in other countries and it would significantly strengthen the government’s hand in negotiations which are obliged to begin once this treaty is ratified.
Ireland must take a more assertive appr oach to bank-related debts. Last year’s policy of talking tough when briefing journalists but leaving the issue off the agenda of summits was foolish. There will be progress on the promissory note because there must be for the sake of genuine debt sustainability and because it will have no adverse impact on the wider European economy. This is exactly why it was designed in this way and is entirely separate from sovereign bonds.
This is a referendum which I believe can be won and won comfortably. If the government is willing to put aside its hyper-artisan and self-congratulatory approach to everything I have no doubt that a positive message can get across to the people.
In relation to the rest of the Council’s agenda, we support the Union further toughening its position on Syria. The widespread slaughter of people who want nothing more than a say in the future of their country must be opposed. THe regime must be told that there is no way back to the international community and significant support should be given to the opposition.
Equally, the Union has a responsibility to increase its support for the democratic forces in other countries that have overthrown dictators but still seek stability.
The summit will also agree a position relating to the G8 and G20 meetings. Those groups are becoming increasingly vocal on the fact that Europe has the means to solve its own problems if it just puts aside rigid policies. They want a more aggressive policy of supporting sovereign bonds and they are right in this. The Taoiseach should insist that the EU’s position at these summits be distinct from that of the members who attend in their own right.
It’s time to end the timid approach to tackling the crisis. Europe can overcome the crisis and return strongly to growth and job creation – but it can only do so if its leaders begin to show more ambition and generosity.