Can I begin by paying warm tribute to the work of this sub-Committee and to your chair Deputy Hannigan.
In its work on the referendum in recent weeks the Committee has provided a forum in which it has been possible for all views on the Treaty to find space and to be subjected to careful questioning and examination. This is a valuable function that you have fulfilled exceptionally well.
I strongly recommend that any one interested in getting real flavour of the debate read the various papers and records posted on your website, and I greatly look forward to your report as an important contribution to our national debate.
I don’t want to speak for too long today. But there are four key messages I want you to take away with you:
- Firstly, this Treaty is part of our journey to economic recovery, both for Ireland and for Europe – it is not the full picture, we have never argued that-but it is certainly an essential part of it;
- Secondly, this Treaty will make an important contribution to restoring stability to the euro – our currency – and this is of vital importance to this country and its recovery;
- Thirdly, ratifying it will underpin the efforts we are making to build confidence and certainty in Ireland as a place in which to invest and do business; and
- Fourthly, it will ensure that we have continuing access to external finance, should the need arise.
These are four strong and compelling reasons why ratifying the Stability Treaty is the right thing for Ireland, and why my colleagues in government and I will be campaigning strongly for a positive outcome.
It is important too that we are fully aware of the broader context in which ratification is taking place. I want to set the record straight on some of the issues and cast aside the red-herrings that have arisen in the debate so far.
I will also say something about why I am also using this campaign to call for a more ambitious approach at EU level. This is not new- I have spoken in the same terms since I became a member of the European Council last March but it is very relevant to today’s debate.
Recovery
Ireland is on a very difficult journey to recovery. We have made very painful adjustments to get back on track, and I know the impact this has had on Irish families. I see it everyday.
But we are making important headway.
Our reputation is being restored – I have seen this during my recent visits to China and the United States. People see Ireland as the country most likely to succeed; as a country serious about closing its deficit and returning to the markets as soon as possible.
They are hearing good things about us, and they are saying good things about us.
This government has already shown how serious we are about closing our €16 billion deficit. Our returns for last year show that we out-stripped our Troika requirements.
Signing up to the rules at the heart of this Treaty - balanced budgets and sustainable debt levels – in other words-Good Housekeeping-will provide a legally tight demonstration of our commitment to continuing to run sound and sustainable budgets. It will help to underwrite our good name and will underpin the progress we are making.
This Government was already committed to introducing a Fiscal Responsibility Bill long before the Treaty was negotiated. We believe it is a good and necessary thing for Ireland and for its people. As I speak today Minister Noonan is making public a General Scheme of that bill so that everyone can understand what it means.
That our partners in Europe are now doing the same thing, adopting more responsible budgeting and sustainable debt levels, will have a reinforcing effect.
A full Irish recovery will not be possible without a European recovery – without a wider return to growth, driving demand across the Union.
Of course, the Treaty won’t achieve this on its own - nobody is claiming that it will. But it will underpin the policies that are absolutely necessary if recovery is to be secured.
My goals in Europe are the same as my goals at home – recovery, growth and jobs.
That requires balance. I have argued for a long time that the response to the crisis in Europe has not been sufficiently geared towards growth.
Recent discussions at the European Council bear that out. There is now a shared sense of urgency about mobilising all available policies and tools at European level to help to turn things around. I will continue to be in the vanguard of European leaders who make that case.
The Irish people can be absolutely assured that I will continue to press for this as hard as I can, at every available opportunity, including in Ireland’s term as Presidency in the first half of next year.
Stability in the Euro
To recover its economic position, Europe also has to put doubts about the euro to bed. That means demonstrating to the wider world that it is a strong, credible and enduring currency. The last few days of uncertainty in the markets show just how volatile this situation is. Recovery is fragile. We need to secure it.
People looking to invest and do business in Europe have to be confident that there is no risk that the currency will collapse overnight or that the benefits of a single economic and monetary union will disappear.
It may be shocking to find ourselves having to make the case, but we saw a few months ago how quickly speculation and concern can spread.
This Treaty should be seen as a strong statement of intent on the part of those countries that have signed it, especially those using the euro.
It says that we are serious about our currency and about economic and monetary union. We are prepared to take the steps necessary to reinforce and to bolster them in the face of the most grave and serious market pressures. We are committed to the euro and we will do whatever it takes to stabilise it and to defend it.
The Treaty has to be seen alongside the emergency response mechanisms that have been put in place and reinforced since the crisis broke – the EFSF and the ESM. It is a part of a renewed and strengthened architecture underpinning economic and monetary union.
It goes without saying that a stable currency is vitally important to a country like Ireland.
We rely on inward investment and outward exports. Those doing business here, whether indigenous companies or multi-nationals, need a certain and predictable future, one without erratic currency fluctuations and volatility.
Ratifying this Treaty will help secure that goal. Not ratifying it leaves us open to massive uncertainty and unpredictability.
Confidence in Ireland
We all know that confidence is fragile. It is hard to gain and easy to loose.
During the years of genuine growth in this country, we were regarded as a world class example of how to modernise and build an economy - making the most of membership of the European Union and developing new markets in an active and engaged way. Our workforce were rightly seen as highly educated and flexible. We were an attractive place in which to live, to invest and to do business.
Then we lost our way.
This Government came to office last year with a very strong mandate to rebuild this country and its economy. Our efforts to restore our reputation and our good name are
working.
All around the world I hear the same message. Ireland is impressing people with its single-minded focus on recovery and growth and its determination to move on.
They see our confidence in ourselves and our abilities. They see how we have recovered our competitiveness. They see how attractive an offer we can make to people looking to invest and to build their business. They see a country of ideas and ambitions with a great future ahead of it.
Ireland’s membership of the eurozone is a key element of our attractiveness to investment.
All of the companies that have chosen to invest and create jobs here – those such as Apple, Mylan, Google, Paypal and Microsoft – have voted confidence in Ireland. Indeed, a number of them are now on record as calling for support for the Treaty at the American Chamber of Commerce “Yes to Investment” press conference last week.
Endorsing the Treaty - keeping Ireland at the heart of Europe and the euro - will show them that they were right. It will encourage others to come here too.
As I have said, confidence is fragile. We need to nurture and to support it. Turning our backs on this Treaty would be a very serious blow and setback at the worst possible time. We cannot afford to squander our progress. Nor can we afford to miss an opportunity to bolster the confidence we have won.
Continued Access to Funding
This Government has made clear its intention to lead Ireland out of our EU/IMF Programme as soon as possible. That is our firm focus and goal.
For that to happen, we need three things.
We need to
continue to make the necessary adjustments at home.
We need to see enhanced stability and a return to growth across Europe.
And we need to be able to convince those thinking of lending to or investing in Ireland that their money will not be at risk.
The situation is very clear. Only those who ratify the Treaty will have access to the ESM.
That makes the decision we will take at the end of May all the more serious.
I do not believe that Ireland will need to access the ESM – as I have said, I am determined to exit the Programme.
But saying that is wholly different from saying we don’t need any backstop for unforeseen events. It is wholly different from saying that we will retain credibility in the markets, with no backstop. Why would we take that risk?
Having access to the ESM makes it less likely that we will need it. It makes Ireland a better bet and a more attractive option.
More substantially, I don’t think that it is unreasonable to ask those seeking assistance to be bound by the same rules and disciplines as those offering it.
Dispelling the Myths
I have said why I strongly believe that Ireland should ratify the Treaty and why it is entirely consistent with the recovery we are seeking to build for ourselves. But I would also like the opportunity to dispel some of the myths that are being spread about it.
Some are arguing that the Treaty is a recipe for perpetual austerity. It is not.
The treaty is simply an agreement among all the countries that have signed it to ensure a balance between money raised and money spent in the shared interest of the stability of a common currency area and the wider Union.
Twenty five out of twenty seven Member States of the Union, with Governments of different political orientations and different approaches to public spending and taxes, have signed it. All of them believe it has a contribution to make to Europe’s recovery.
All of them will continue to take decisions about taxing and spending in what they believe to be the best interests of their people and their societies.
And, as I have said, most of the rules it contains already exist within existing EU Treaties and laws. They are given greater focus and more bite, including through the requirement for each country to give them effect in domestic law, but we would have to adhere to them, with or without the Treaty .
The argument has also been made that this is not a Treaty in the interests of ordinary working people. Again, this is profoundly wrong.
This is a Treaty that will help to deliver stability in the euro and confidence in Ireland. These are critically important if Ireland is to recover, to maintain the jobs it has and to create new ones, including through attracting inward investment. People and jobs are at the heart of this Treaty, not just deficits and budgets.
There is nothing of more immediate importance to Irish workers and their families, and to those looking for work now, than the protection of existing jobs and the creation of new ones. Protecting the euro in their pocket is critical . The euro that pays for schools and hospitals. The Euro-our currency.
It has also been said that we should hold back, waiting to see what others do first. Again, this is the wrong headed and surprising approach.
Ireland must decide on the basis of what is best for this country, its people and its future. In my view, that is a strong decision in favour of the Treaty. This analysis will not change.
Ratification is already underway, with the process complete in a number of countries, including Portugal and Greece, and there are good reasons why the process should be advanced quickly.
It is clear that while there has been some respite in the crisis in the past few months – not least because of the actions of the ECB – there are storm clouds gathering. What Europe needs now is more not less certainty – a strong signal that it will implement what has been so recently agreed.
It may be that there will be a change in leadership in other Member States, including France. And it may be that new leaders will seek to enhance what has been agreed, including through an added focus on the growth and jobs agenda.
I’d welcome any reinforced growth focus. I will be greatly interested to see any specific ideas that will be brought forward – as I have said, this is a priority concern for the Government and one I have been advancing at European level. I stand ready to lend our support where new thinking makes sense. A new agreement on Growth would be the much needed complement to this Treaty that would bolster this Treaty’s support for recovery.
But agreeing a new focus on growth can be done whether or not Ireland has ratified, whether or not the Treaty has entered into force. This train is moving and we want to be on board.
Europe’s future direction
Finally I would like to say a few words about Europe’s future direction.
The recent crisis has highlighted a number of problems with how business is done in Europe. We have not weathered it as well as other parts of the world, including the US. And this is despite the fact that Europe, objectively, has less public debt relative to its GDP and that it has an overall balance of payments with the rest of the world.
Why should this be?
I believe that there is more concern about Europe because there is less confidence that our integration and solidarity is sufficiently robust to withstand the powerful economic and political forces the crisis has unleashed.
The fact that our economic and monetary union is not yet complete leads to internal tensions, including between debtor and creditor countries.
In the US, adjustments have been made easier by increases in federal spending and transfers between states. In no case have the citizens of one state had to deal with the consequences of foolish choices by their banks alone.
In Europe, the insistence that citizens in each Member State must stand behind the entire liabilities of banks regulated in their jurisdiction has probably been the greatest reversal in the single market since its foundations – under pressure from national Governments and regulators, cross-border banks are withdrawing behind national borders.
One possible solution is to ‘federalise’ the response to the banking crisis in Europe, with the ESM given the powers to re-capitalise systemically important financial institutions directly.
I am not proposing a United States of Europe, but I am saying that we need new economic tools to give greater substance and credibility to our commitment to a true economic union.
I see the Treaty as a good step in the right direction.
But I do think that we need to do more, and I expect that this is a debate that will continue in the period ahead, including in this Committee.
Conclusion
The government announced the date and wording for this referendum a month ago. There are now just 34 days between today and 31 May when the people will cast their votes.
The Government will be using this time to conduct a strong and vigorous campaign. A central part of this effort will be making all the information people need to reach an informed decision available.
We are sending the Treaty to every house. We are following up with a further explanatory leaflet. We have a website, including a short video that allows people to get the essence of the Treaty in under two minutes. Nobody should feel that they don’t have the time or the means to understand what is involved.
A referendum is a serious matter. It is one of the few occasions when we speak together as citizens on a single topic, and when we agree whether or not to change the fundamental law of the state.
The decision on 31 May will present us with a moment of truth and of real consequence for the country and its people. I want our voice to be strong and clear. I want us to send a message about Ireland that will resonate to the world well beyond our shores.
A message that Ireland is moving forward; That it is confident, positive and engaged;
That it is committed to a stable euro, and to playing a full role in bringing it about.
That it is a great place in which to do business, where people can invest with confidence and certainty;
That Ireland is a country where future governments will set sound and sensible budgets, and where they won’t take risks with the well-being of their people; and
That we remain, as we have ever been, committed and engaged Europeans.
That is what the Treaty is about, and that is why the Government will be campaigning strongly for it. For my own part, I’ll spare no effort in seeking support for it all over the country.