Ceann Comhairle,
On 31 May, the people of Ireland can take another important step on the road towards economic recovery, stability and increased investment.
The decision that we will take collectively in the referendum on the European Stability Treaty will have real and serious consequences for the future of this country and its people.
There is a responsibility on all of us here, as their elected representatives, to ensure that when the people come to cast their vote they do so with all of the information that they need.
I believe that it is very important that, this time, the people are properly informed on all the issues at stake.
The Government will certainly be playing its full part. We will do so in measured and honest terms. I hope that everyone else – whatever view they may take – will do the same.
Ireland is on a very difficult journey to recovery. The adjustments we have had to make in recent years have had an impact on every man, woman and child in the country. They have been painful, but we are making headway.
Our international reputation is being restored.
Our competiveness is improving. The latest official European Commission competitiveness statistics show Ireland is now ahead of the EU average on almost every measurement.
In recent months alone numerous multi-national 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 futur for our future.
We are all working together with one end in mind - recovery. Getting back on our feet and back in control of our own affairs.
Each decision we make must be weighed against this vital goal.
Will it move us forward, or set us back?
Will our position be more secure or more uncertain as a result?
When it boils down to it, these are the questions we must ask ourselves now.
The Bill we are discussing is a short one; two sections and a short schedule. It proposes simply that the Constitution be amended to allow Ireland to ratify the Treaty on Stability, Coordination and Governance; and that constitutional cover be extended over acts adopted under it.
The Treaty itself is also not too long or too complex – sixteen articles in total with a few pages of recitals. The Government wants people to read it for themselves – that is why we are sending a copy to every household. Everyone needs to know what is involved.
But the debate must be more about the words on the page.
To reach an informed view, the people also need to be able to see the new Treaty in the context of the very difficult circumstances that have prevailed in the EU and beyond in recent years.
The euro is about twenty years old. It 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, though they were the best that could have been achieved at that time.
They were designed to support a single currency yet to be created.
Experience has shown that while they got a lot right – the euro was established and became a strong and credible currency - they did not put in place a framework strong enough to ensure sound budgetary policies across the Union, and 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 away of market confidence in Europe and the euro.
And, as this house knows too well, confidence is essential to functioning markets and healthy economies.
Since the crisis broke, much has been done at 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 now.
We have put stability mechanisms in place, first the temporary European Financial Stability Facility – the EFSF – and soon the permanent European Stability Mechanism, the ESM. Ireland has been among those who have benefitted from having these facilities available.
We have taken the experience of how these mechanisms have worked on board, and we have 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.
Again, this has been and is of direct benefit to Ireland.
There is also an acceptance now of the need for an equal focus on the drive for the generation of growth and the creation of jobs.
This is something I have personally advocated strongly since taking up office and I look forward to working with colleagues in the European Council in the period ahead to keep it at the very top of our 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 it was clear that there was a wish for new treaty provisions to underpin confidence in the shared currency; for euro members to enter into an explicit commitment to run responsible budgetary policies; and to be held to account for doing so.
The new Treaty – the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union – was negotiated with impressive speed and signed by 25 EU Member States on 2 March. Each is now proceeding with the process of ratification.
This is the context in which the new Treaty must be seen.
It is part of an on-going effort to restore confidence and stability to the euro, the currency we share.
In drafting the Treaty, we did not begin with a blank page. We were building on the existing framework of EU Treaties and law, that already contain most of what is included in the new Treaty. 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 are tightened over what currently exists, but the main innovation is the requirement to set these rules out in a binding way at national level, and to ensure that there is a correction mechanism that kicks in automatically if there is a danger of them being breached.
Is this a recipe for permanent austerity as some have asserted?
No, it is simply an agreement among all concerned to ensure a balance between money raised and money spent in the shared interest of the stability of a common currency.
It will have consequences for Ireland; but they are positive ones.
It will mean that no future Government will be able to bring us to the brink again through reckless spending of the people’s money.
Ireland’s current economic situation is certainly very challenging – though we are turning it around bit-by-bit – but it is not without precedent. Many people in this country will recall the serious mess into which we got ourselves in the past when our debts threatened to drag us under, though on that occasion we managed to adjust our course before it was too late.
This reckless boom-bust approach to economic policy making, as practised by some in this House on more than one occasion, cannot be allowed to happen again.
Through its commitment to a Fiscal Responsibility Bill, the Government had already made clear its intention to put in place the legislative framework to guard against such future disaster.
That we are now doing so in tandem with our euro partners should be very welcome to all responsible parties in this House.
The efforts we are making in Ireland to restore confidence in us as a country in which to invest and do business are working. But those thinking of making important investment decisions in the period ahead are, naturally enough, concerned about the wider prospects for European recovery.
We need the picture they see to be a positive one. This Treaty will make a real contribution to ensuring that it is.
When I work around the world to promote Ireland, 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 time.
I tell them about our confidence in ourselves and our own abilities; about our educated and dynamic young people; about our skilled and flexible workforce; about our pro-business, can-do attitude.
I tell them that Ireland is a country of ideas and ambitions with a great future ahead of it.
Throughout my recent visits to the United States and China, the consistent message from both political and business
leaders is 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.
As I said at the start, we need to weigh every decision we take very carefully and to ask ourselves whether it will move us forward or hold us back.
And that means entering into a serious and honest analysis of what our situation would be if we were to decide not to ratify the Treaty.
I have heard the voices from inside and outside this House who, in urging a no vote, deliberately and disingenuously downplay the serious consequences of what they propose.
They do the Irish people an enormous disservice.
Were Ireland to remain outside the new arrangements, we would be the only euro area country to do so. We would not be pushed out of the euro, but we would have marginalised ourselves. And be in no doubt, this Treaty enters into force when 12 countries that use the euro have ratified it, there can be no question of preventing others from moving ahead without it.
Much has been made about the link between the new Treaty and the ESM. I am sure we will hear a great deal more about this in the debate ahead.
I think it is logical that those who are prepared to offer financial support to others in 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 – a critical reassurance for investors, and potential investors.
This link between the new Treaty and the ESM is logical, but it makes the decision we will take on 31 May a particularly serious one.
The Government has made clear its intention to take Ireland out of a Programme and back to borrowing on the open markets at soon as possible.
For that to happen, we need to continue to make the necessary adjustments at home. We need to see enhanced stability and a return to growth across Europe. Beyond that, we need to be able to convince those thinking of lending to or investing in Ireland that their money will not be at risk.
I do not believe that Ireland will need to access the ESM. But saying so is wholly different from saying that we can look credible to the markets without access to some sort of a backstop.
Having access to the ESM makes it less likely that we will need it.
Locking ourselves out, makes our case a lot more difficult to make.
This is not a time for needless risk.
Ceann Comhairle,
A moment of true consequence lies ahead for the Irish people on 31 May.
It is no exaggeration to say that the world will be watching.
In deciding that the state can ratify the new Treaty we will be sending a signal that will resonate well beyond our shores – a strong, positive and confident message.
Ireland is moving forward and tackling our economic problems.
Ireland is staying where it wants to be, at the heart of Europe, in the mainstream. It is committed to a strong and stable euro, and is playing its part in bringing it about.
It will say that Ireland is a place where people can invest and create jobs with confidence and certainty; it is a country where future Governments will take prudent and sensible decisions, where they don’t take risks with the well being of their people.
That is the true voice of the Irish people; the one I want the world to hear on 31 May.
There is only one positive choice. Vote yes. Yes to investment. Yes to stability and Yes to recovery.