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THE OIREACHTAS SUB-COMMITTEE on the Fiscal Compact Referendum today heard submissions from the United Left Alliance, Fianna Fáil leader Micheál Martin, Labour leader and Tánaiste Eamon Gilmore, and independent TD Catherine Murphy.

We liveblogged proceedings as they happened.

Good morning and welcome to our live coverage of events in Committee Room 3 as the Oireachtas sub-committee on the Fiscal Compact referendum. We’re hearing from Joe Higgins from the Socialist Party first. He will be advocating a No vote.

We’re just about to get underway hear. Some welcomes back after a long Easter break for the Oireachtas. This committee last sat on Holy Thursday. Has everyone got their phone off? Today, the committee is focusing on the reactions of Irish society to the treaty.

Higgins is speaking on behalf of the United Left Alliance of TDs which includes People Before Profit, the Socialist Party, and Seamus Healy. He says the stating of Europe’s objectives in the preamble to the treaty in relation to sustainable growth, employment and social cohesion will be “irretrievably wounded” if the treaty is implemented and would have dreadful consequences for the EU.

Higgins references an article by Paul Krugman in the New York Times yesterday (and the Irish Times today) in which he states that:

What we’re actually seeing, however, is complete inflexibility. In March, European leaders signed a fiscal pact that in effect locks in fiscal austerity as the response to any and all problems. Meanwhile, key officials at the central bank are making a point of emphasizing the bank’s willingness to raise rates at the slightest hint of higher inflation.

So it’s hard to avoid a sense of despair. Rather than admit that they’ve been wrong, European leaders seem determined to drive their economy — and their society — off a cliff. And the whole world will pay the price.

You can read that article here.

Higgins says many economists are making similar contentions and says that Kurgman, a Nobel prize winner, is no socialist. He name checks Karl Whelan and Colm McCarthy who have criticised the treaty but have advocated a Yes vote nonetheless because of the ‘blackmail clause’.

Higgins says that 18 countries out of 25 have structural deficits greater than the targets the treaty is looking to impose. €166 billion of cuts across the 25 members of the EU in 2013 would be required, he claims. It would have “devastating effects” says Higgins. He refers to the “crucifixion” of the Spanish people where unemployment is high.

He says that the treaty is structured for the likes of the bondholders and the unelected bureaucrats who hold the balance of power in Europe. Higgins says that even if the “establishment” parties were successful and got the treaty passed, that would not be the end of the matter. People’s patience “is at an end and the establishment parties should know that,” he says. He points to the boycott of the household charge.

“These are austerity taxes,” he says of the current spate of new taxes – household charge, water metres – saying that they are being used to bankroll “casino capitalism”. People are right to fight the taxes, he says, and should vote No because it would be a “powerful statement of intent”.

Higgins wrapping up now and says that ULA stands for a Europe that is free from the markets and the bankers and where the financial system is in public control.

He says that hundreds of millions of ordinary Europeans would welcome the rejection of this treaty.

Higgins done. Now questions from the floor. Chairman Dominic Hannigan urges brevity. Richard Boyd Barrett, Higgins’s ULA colleague, is up first. Much to his surprise and others perhaps as he’s not exactly going to be disagreeing with Higgins. RBB says that this is “the wrong solution to the wrong problem”.

RBB says that growth is being “crippled” by the economic austerity being imposed. He says money given to banks is being hoarded in the European Central Bank. He says that the treaty will have a very serious impact on democracy. Boyd-Barrett cites German chancellor Angela Merkel as having said that never will the debt brakes being proposed in the treaty be able to be changed by a parliamentary majority.

Fianna Fáil’s Timmy Dooley is up now… says he would share “some” of Higgins’s views.

Dooley asks Higgins to identify somewhere in the world where a country has set out a system of government that he agrees with. He asks how would the deficit be funded in the absence of support from “our partners in Europe”.

Paschal Donohue (FG) is up now and asks will austerity get worse or better if Ireland cannot access international funding. That’s all.

“I’ve rarely seen parliamentarians be so brief,” Higgins jokes as he begins his answers…

Higgins says there is no government or country in this world that practices democratic socialism. There have been aspects of what socialism might look like, says Higgins, but that has given way to neo-liberalism in every country including the Scandinavian countries, he claims.

Better systems will arise, says Higgins, better than this “crazed system”. Higgins, apparently asking questions now, wants to know why is there no objection to what is happening in Europe. Higgins cites example of there being no protest when governments were replaced in Greece and Italy. “I can’t understand that,” he says.

He says that excluding access to funding from the ESM has not yet been enshrined in any treaty. He says this is a “blackmail clause” being brought about that can be stopped. The amendment to the treaty and the functioning of the EU can be blocked by the voting of any member state. The blackmail clause says that if you do not adopt the fiscal compact you cannot access ESM funding, he says. “A false choice,” says Higgins.

Austerity is making the deficit worse, says Higgins. He says the domestic economy and boosting that is the only way that the economy can grow. Donohue asks his question again that if a country cannot access funds does Higgins expect the deficit to get better or worse but Higgins insists this is a false choice. Bernard Durkan now.

Durkan (FG) asks Higgins does he not feel that he is attempting mistakes of previous government by attempting to appeal to a certain group of the electorate by “revving up” their fears and concerns about consequences of voting a certain way.

Durkan also asks if Higgins what would he do in a situation where he is a homeowner who has overborrowed, would he not provide assurances that he was going to pay the money back?

Paul Murphy, a Socialist Party MEP, is up now and as a party colleague of Higgins he starts his question with “would the deputy agree”… I am sure he will.

Murphy asks if more austerity will not make the crisis worse as well as a number of other questions. Dominic Hannigan, Labour and chair of the committee, also has a question in relation to the what evidence is there to suggest that there is a blackmail clause in the form of access to the ESM treaty.

Higgins says that he never accused Fianna Fáil of buying the electorate, despite Durkan’s claim in his question earlier (11.49).

Apologies. We’ve had some technical difficulties here. Here are the liveblog entries from 12.01 to 12.13. We will be updating you on the evidence given by Micheál Martin in a moment…

12.13 – Paul Murphy (Socialist) and Donohue are having a back-and-forth now.

12.01 – Higgins says that he and his ULA colleagues are “telling the truth” when it comes to issues like the household charge and are not revving up people’s fears, as Durkan claimed. He says that “we’re not wrong in any sense” when he and the ULA claims that the taxes are an extra burden on the working people.

12.08 – “Essentially we are saying that private corporations and banks should not have the right to blackmail society,” he said. The profits they made were made by the talents of the working people. “We socialise them” he says of the banks and the hedge funds “and then we plan to economy on the basis of our needs”.

12.11 – Paschal Donohue (FG) contends that is it not the case that this treaty is ensuring that public investment is made through taxation and not the borrowing of money? Higgins agrees with the principle of that but argues that he wants to see the end of the financial market system as it is ensuring investors are made very rich.

Fianna Fáil leader Micheál Martin has been giving his submission and his party’s advocating of a ‘Yes’ vote. Martin said he has been talking about the resolution of the crisis in the eurozone more than any other topic in recent years.

The EU has enabled “prosperity and peace” despite all that has gone on in recent years. Many people are suffering, said Martin. Unemployment is too high and living standards are under pressure but since 1973 Ireland has witnessed significant advances because of its membership citing foreign direct investment as one of them.

Martin continued that the Union did not have policies or powers to tackle the crisis. In reality attempts to adhere to rules were not sufficient. Creation of a bailout mechanism came too late.

“It’s [the fiscal compact] is an essential part of the answer” to the eurozone crisis, said Martin.

He said that the treaty is entirely consistent with what the country signed up to in Maastricht 20 years ago. He said treaty will make budget decisions easier if anything said that people have right to hear positive case made.

He said the idea that the treaty will lead to the end of the economic principles of John Maynard Keynes rather it will be what he proposed. He said it was “foolish and counterproductive” to frame referendum as an issue on membership and whether Ireland is in or out.

It is not a measure that will ensure the crisis does not happen again, Martin cautioned. He said that date for the referendum was not ideal as there needed to be more time for a debate on the referendum. He noted that his party was the first to call for a referendum on the treaty.

Martin said that provision of information is “absolutely essential” and said that in some cases there was an assumption that the public knew more than they actually did. He cited the fact that there was a lack of information about the first referendum on the Lisbon treaty.

Recent referendums has also shown that there had been a lack of knowledge. “A lot of people didn’t quite know  the detail on this,” he said referring to the two most recent referendums on judges’ pay and Oireachtas inquiries.

Access to European Stability Mechanism is important said Martin because the country could not access the markets. He said it would be far better to be in a position to avail of funding from the ESM than the markets where the cost of borrowing has soared.

Martin said there was “nothing new” in the treaty when considered in the context of the provisions of the Maastricht treaty.

That has you bang up to date now on what’s been happening. Apologies for the downtime and the flurry of updates. Martin is still talking about the necessity of passing the treaty to “instil confidence” in Ireland and the wider eurozone.

He says that Fianna Fáil will be “campaigning constructively and energetically” for a Yes vote.

The Fianna Fáil leader suggested that a White Paper which would be “lay friendly” would have been useful in this situation.

He said that it should not be “overestimated” how much knowledge people will have. “This doesn’t rate as the number one item at the moment in people’s daily discourse,” he said noting that there needed to be a good public information campaign.

Fine Gael’s Bernard Durkan refers back to the “national interest” when talking about how Labour and Fine Gael “rode into” referendum campaigns on Lisbon in previous years. He asks that all TDs and senators can who are in favour of the treaty will campaign vigorously for ratification of it.

The more “energetic the campaign, the better the outcome” Martin says. He says there is an obligation on the parties to put the case to the people. He says its important to be factual and not over claim when it comes to campaigning.

Micheál Martin’s statement to the committee has just been released by Fianna Fáil. Read it here.

And that’s it. Chairman Dominic Hannigan wraps up until 2.30pm when the Tánaiste Eamon Gilmore will be in attendance. We’ll be back then. Do please join us.

We’re back – and Eamon Gilmore, the Tánaiste and foreign affairs minister, is in Committee Room 3. He says the last time he was in front of the EU Affairs sub-committee was just before the Treaty was agreed. He’s complementing this sub-committee on getting into business so quickly.

Gilmore says the full government campaign will begin enxt week, and that FG and Labour will run a campaign the likes of which has not been seen in Ireland in recent years. The main question is why Ireland is voting in favour of this treaty, and where it came from. He discusses the “double whammy” of a collapse in income and a surge in spending (through the likes of the bank guarantee). This was, unfortunately, “very very human”.

Gilmore says the full government campaign will begin enxt week, and that FG and Labour will run a campaign the likes of which has not been seen in Ireland in recent years. The main question is why Ireland is voting in favour of this treaty, and where it came from. He discusses the “double whammy” of a collapse in income and a surge in spending (through the likes of the bank guarantee). This was, unfortunately, “very very human”.

With a comeback always so close to realisation, the worst thing that could happen in Ireland is that the currency we use loses its stability. Despite the Eurozone’s imperfections, he says, we now have a permanent bailout fund, early warning systems, an active central bank ‘retrofitting’ proper requirements.

Referring to criticisms that the treaty does not support growth, Gilmore points out that a growth agenda was agreed upon by EU leaders at the same time as the treaty.

In simple English, Gilmore says, the treaty is about the stability of the Euro currency – the money we earn, spend and (hopefully) save. The treaty isn’t the end-all, but it’s a fundamental block. It’s also showing how Ireland wants to remain in the “heart” of European decision-making, funding vital public services, and so on. All of this may one day be contingent on having access to the ESM, and that is dependant on a Yes vote.

Gilmore: The treaty isn’t, as some had suggested, “a trigger for €166 billion in cuts across Europe”. Those estimates are arrived by being “fast and loose” with numbers. What it IS about is situations where we spend more than we make, and in circumstances where investors are not willing to help us bridge the gap. A Yes vote gives us the flexibility to enact measures like cutting the minimum wage. It’s good housekeeping, he says, allowing budgets to retain the flexibility they need.
On the 31st of May, ratification will be the people’s choice – and the government is committed to ensuring each voter is up to speed with what they are voting on. Booklets are going to each home, and an online presence in favour of the campaign will be launched (hopefully) later this week, he adds.

Senator Terry Leyden (FF) is the first with a question, and preceeds his questions with a comment expressing dismay at the “bully-boy” tactics of some at the Labour conference in Galway. He asks if Francois Hollande’s likely election throws the treaty into doubt. Hollande has openly said he wants to renegotiate the treaty – if he’s elected, what impact will this have?

Senator Terry Leyden (FF) is the first with a question, and preceeds his questions with a comment expressing dismay at the “bully-boy” tactics of some at the Labour conference in Galway. He asks if Francois Hollande’s likely election throws the treaty into doubt. Hollande has openly said he wants to renegotiate the treaty – if he’s elected, what impact will this have?

SF’s Padraig MacLoghlainn mentions the text of the constitutional amendment being put into the Dáil this week – and asks whether Gilmore agrees that the austere targets set by it would be difficult to unentangle Ireland from, if a new government changed its mind, or the public wanted to roll back.

He says SF welcomes the decision to delay the Dáil’s vote on the EU bailout fund, the ESM, until after the Fiscal Compact vote – this gives the government a mandate to seek amendments to it if Ireland votes No, he says.

MacLoghlainn also comments that the only comments in favour of the Fiscal Compact appears to be ESM access – and asks why other socialists around Europe believe the deal to be “too right-wing” when Labour is comfortable to seek a Yes vote. If this is a debate about the big picture, the opposition voices need to be heard, he concludes.

Gilmore precedes his answers by saying the violence at the Labour Party conference was among the minority, but wonders why some TDs who organised the protests haven’t disassocated themselves from the violence.

He says the Fiscal Compact campaign has been relatively short in comparison to other EU treaties, and says the stance of other countries – including France and Francois Hollande – is a matter for those countries. As Gilmore understands it, Hollande wants to add a growth agenda to the existing treaty and not undermine the parts already being agreed. That’s perfectly fine, Gilmore says – there’s already discussion on how to stimulate this and there has already been an agreement on it. There is a growth agenda which goes “hand-in-hand” with this treaty.

Responding to Dooley and the online presence, Gilmore says www.stabilitytreaty.ie should be live later this week – and agrees that nothing can be taken for granted. A government which negotiates the treaty has a duty to ensure that people know what’s included in it, he says. That’s why a copy of the treaty is being sent to every home.

He mentions that every individual referendum commission is separate, and the one which oversaw the two referenda in October has submitted its report. The report will be published shortly, he says – though it should be borne in mind that those referenda were run alongside a more prominent presidential election.

To MacLoghlainn, Gilmore says Ireland has a long history of honouring treaties it has signed up to. If the people vote Yes, it is the government’s intention that the terms be honoured. There are three related pieces of legislation: the amendment to the EC Act, dealing with definitions; the ESM treaty to ratify the bailout fund; and the ‘debt brake’ bill. These will all be published before the referendum, though not brought into the Dáil before the outcome of the referendum.

On socialist opposition, Gilmore says Labour has always wanted a fair and democratic Europe which enhances the rights of the citizen. Much of the progress made in the country like the introduction of equal pay, equality laws, labour law, consumer law… all finds its origins at EU level. “Ireland has been better for the fact that such legislation has been brought forward,” Gilmore says. Work to ensure jobs and high incomes in Ireland depends on success in Europe, and we have to do our bit to keep Europe on the road.

There are some guffaws when Dooley points out that SF’s MacLoghlainn might want other chances to question him, and Gilmore reckons this won’t be MacLoghlainn’s only chance.

Bernard Durkan (FG) reckons Hollande isn’t as big a topic in Kildare as it is in Leyden’s Roscommon, but reverts to Gilmore’s last point that each country has to actively accept its own role in bringing Europe forward. Hollande, he says, supports job creation once the books have been put in place.

Right now, Durkan adds: isn’t there a responsibility on the part of the EU itself to reaffirm the European vision, and the concept of Europe? Currently it seems only to be the responsibility of political parties to outline their own visions, but there is little reminder of the EU’s original intention. Durkan recalls a former mayor of Strasbourg who was also the President of the European Parliament, who was able to speak in a way that included all the people of Europe – whereas other subsequent leaders seem to adopt an “opt-out clause” where the original ideals of Europe are let go.

FF senator Mary White is next up – she points out that many people didn’t realise, until Ireland joined the EU, that Ireland’s old law requiring wives to give up their jobs were as antiquated as they were. Ireland shouldn’t be afraid to say what it has gained from the EU, White says, and that also includes employment, which is a critical topic – in fact, the “only issue” – really occupying Europe right now.

“If I were you, I would be talking about what we are doing about jobs, how we are bringing down this 14.5% unemployment,” White continues. “What are we doing? There’s a lot of action plans for jobs… but I, to be honest with you, as a close watcher of how we’re delaing with it… I don’t think we’re breaking through on it.” This is relevant to the compact because Ireland attracted so much foreign investment simply because it was pro-European, and this is put at risk by a No. She would suggest, “with humility”, that the government try to energise people and not be dragged down by the household charge, water metering.

FG deputy Paschal Donohoe is next, and raises the question of conditionality, requiring Ireland to ratify this to get access to the ESM. He points out that as a taxpayer, Ireland will be contributing to the ESM – and it’s in Ireland’s own interests that there be ‘entry criteria’ to see how that cash is accessed.

Referring to Gilmore’s comment that the eurozone is “not out of the woods” yet, Donohoe says the woods could be re-entered quite quickly, if other countries get dragged back into crisis. With that in mind, Donohoe says, Ireland is better off ‘inside the system’ with access to a safety net. Ireland’s “big picture” was that the banks couldn’t borrow, the country couldn’t borrow, and the passage of this is the best way to ensure this doesn’t happen again.

Sinn Fein senator Kathryn Reilly is next, and returns to the common theme that the fiscal compact is not the “be all and end all” to end the crisis. She quotes Micheal Martin’s speech at the IIEA in February, who pointed out that the flaws in the euro had not yet untouched – and that the fiscal compact was broadly equivalent to copperfastening existing policy but expecting a different result. What is the wider package that will be the solution? What is the ‘toolkit’ being assembled?

Gilmore starts by responding to Bernard Durkan – and says it’s important to distinguish between the content and the intent of this treaty. There can be differing views about political directions, but the treaty isn’t about politics, it’s about the euro alone. Nobody is arguing that it’s going to correct all of the difficulty. A lot of Gilmore’s work as foreign affairs minister, he says, is meeting with financial opinion makers and others who could lead investment.

One of the things he’s been struck by the degree to which they’ve stopped asking about the health of the Irish economy – they’ve “got the message”, Gilmore says. They instead keep asking about Europe and the euro – and this is now the principal concern. He’s been in the US, Japan, Korea… everyone is asking not about Ireland, but Europe and the euro. Those people remain uncertain, and stability for the euro is therefore essential.

Responding to Donohoe’s questions on conditionality, the Tánaiste says he can’t understand why some people would want there NOT to be an ESM at all. He sees no logic against having a pool of money to ensure that a troubled country should have access to a savings bank. People who argue against that, he says… “I can’t square that with how they see… I mean, this is a safety net.”

If you have a permanent fund like the ESM, it is inevitable that there will be conditions attached to that. The first and most basic condition attached to a loan is the idea that it be repaid – and it’s not unreasonable that the ESM have conditions like the fiscal compact, to ensure that the money lent by other EU countries is repaid. As regards “being out of the woods” (or not), the Euro is more stable now than in late 2011 but there are still worrying signs (*cough* Spain! *cough*) and that’s why we need to remain on track.

This leads Gilmore to Reilly’s questions about the ‘toolkit’. There is a jobs and growth agenda, Gilmore says, including measures to address youth unemployment, funding for SMEs, and the completion of the single market. On top of that, there’s steps from the ECB to provide additional money for the European banking system where progress is ongoing, and the firewalls being built to protect the currency. The fiscal compact is only part of that package, albeit an essential one. Ratifying the treaty would send a strong message to investors, and also ensure that the permanent safety net is put in place for future access in case anyone hits difficulty.

Chairman Dominic Hannigan (Lab) asking for some urgency, and calls Mac Loghlainn again. He corrects Gilmore by saying people don’t oppose the ESM, but rather the inclusion of the “blackmail clause” in the preamble of the fiscal compact, requiring it to be ratified.

He says Gilmore’s constant references to the euro and saving it is populism, merely nodding to the popularity of the currency and not the unpopularity of politicians, mentions the Bundestag’s repeated look at Irish budget policy, and concludes on the European ‘six pack’: almost everyone agrees that the fiscal compact is nothing new, so what’s wrong with the six pack of financial measures which was opposed by Labour MEPs in Europe?

Gilmore replies: It’s not populism: the treaty IS about the Euro. That’s fundamentally what it’s designed for: “to bring stability to the euro. Everyone personally understands this.” It’s our own currency and it matters to Ireland that it’s secure, strong, stable. The treaty provides a means for the existing rules to be uniformly implemented, he affirms.

Ireland is in a programme where the Troika are here every three months to check up on us. The objective of the government is to get out of the programme, but in order to do that we need to get the deficit down – and Ireland can’t set itself up as it has previously.

There are some disputes about the legality of the preamble of the treaty, and Hannigan is asking Mac Loghlainn to keep the peace. Eventually the SF TD gets his time, and Gilmore makes the distinction that the text of the treaty is not being written into the constitution. The referendum would merely ask people to allow the state to sign up. If Ireland ratifies it, Ireland will honour the treaty just as it honours all others.

Bernard Durkan gets a follow-up, and mentions eurospectic ideas about the merits of collapsing the euro: can Gilmore comment on what this would mean for personal borrowers, sovereign debt, and so on? Durkan also mentions Declan Ganley, who said the Fiscal Compact would have prevented the crisis if it was in place 15 years ago. As others giggle (“Is Mr Ganley God?” asks Mary White), Durkan asks if Gilmore agrees.

Time also for Paschal Donohoe – who says the reason people refer to “stability” in the context of the treaty is because that’s it’s name: the Stability Treaty. The decisions we are scrutinising are the sustainability of Ireland and the Eurozone as a whole.

Gilmore says he probably agrees with Ganley: a treaty like this would have assisted the good housekeeping we needed and probably didn’t have. It’s up to others to make the argument for why the euro should collapse and what Ireland does afterward, he says, merely concluding that it’s in everyone’s interest that the euro in their pocket is “sound, and solid, and stable”. People understand that certainty and stability is important for investors.

Gilmore also reaffirms the point of Donohoe on the use of the word “stability” to describe the treaty, and says it’s in both national and individual interests to ensure the euro is stabilised. This is precisely why the treaty exists and it’s why Gilmore wants a Yes.

Timmy Dooley, FF, gets an epilogue and says the refusal of the Troika to meet opposition leaders could be seen as an argument by opponents of the treaty (he mustn’t have read our story on why they’ve refused). Dooley says putting people behind closed doors hampers their to have trust in how Ireland is being managed.

Gilmore says he understands it was the Troika’s decision not to meet with the political parties, and that the government doesn’t object to meetings. He points out that the Troika are conscious of the referendum debate, however.

In conclusion, Gilmore remarks that Ireland must see the treaty in context of its goal – to bring about an economic recovery. 12 months ago we were in a deep crisis; we’ve made good progress, but one of the things holding us back is the uncertainty over the euro, and it’s in Ireland’s interest to settle that and ensure stability. A stable currency helps investors make decisions.

He adds that adopting the treaty encourages Ireland to deal with its deficit problem, and for all of those reasons it’s in Ireland’s own interest that it ratify the compact. He hopes the debate in the coming weeks focuses on the content of the treaty (as it has done so far) and that people make an informed decision.

And with that, we suspend our hearings until 3:50pm, when Catherine Murphy of the Technical Group will be in. We’ll be back in 10 minutes to bring you the news from her meeting.

Back we are, with the Technical Group’s whip Catherine Murphy.

Murphy begins by saying that while she’s part of the technical group, she’s only speaking on her own behalf and she expects the 11 non-ULA TDs within the group to have a wide variety of groups. She opens by discussing the goal of the treaty, which tries to give the “core Euro states” some assurance about loans provided to the periphery ones.

If the Treaty is passed, she says, it’ll have profound implications on everyone here, but mostly on those on low to middle-incomes and those who are most dependant on the state. It puts, pretty much, “a gun to our heads” requiring us to adopt difficult measures if we want to borrow from the ESM.

Recklessness was not unique to the periphery, Murphy says, quoting one analyst who says the treaty is merely a political sop to Germany and irrelevant to the markets. If this is ratified, however, it has a real effect on Ireland which would have to offer Budgets under the terms of the deal, which may not help encourage investors to give us their money any more.

Essentially what this treaty creates is an intergovernmental organisation on a par with the EU, she says. Our constitution is only slightly above this law, with the intergovernmental treaty being alongside the EU in precedence in Irish law.

Murphy is opposed to the treaty and will be voting No, but says she wonders why we’re aiming to give the treaty such a superior legal weight.

Onto the consequences: the general government deficit is around 10 per cent, Murphy says, with deficits in the coming years of around €13 billion. Once we exit the bailout, this deal requires us to make similar adjustments into the medium term. This has profound implications for a country like us – restricting us in measures like the bailout, and giving us no wriggle room in trying to create employment.

A trade-dependant country like Ireland is reliant almost solely on the export sector, and international demand is sluggish. The export-led recovery won’t come quickly, and while trade is important, it can’t be the only strategy. Murphy’s point is that we need to resuscitate domestic demand – and this won’t happen if the government can’t stimulate it, being handcuffed into austerity as it would be. “This is really dire,” she says.

Even if we met the 3 per cent target laid out in the bailout, our only choices are to cut services or increase taxes to meet the 0.5 per cent one laid out by the Fiscal Compact.

Murphy moves onto the net government debt, saying Ireland’s general government debt will be 120 per cent of GDP by the time we get out of the bailout. The fiscal compact wants this under 60 per cent, and requires aggressive measures to bring us there. Those who say a balanced budget is in our interest also need to specify what that’ll mean for people.

Murphy says it’s dishonest to sign up to this deal if we know we can’t achieve its goals, which include the 60 per cent debt target. The only hope we would have is by getting a debt write-down, and this is almost explicitly ruled out by this treaty.

Murphy: If we’re looking for a European-level solution – which we need – why aren’t we looking for institutional changes? This treaty is a “one-dimensional approach” and we need more action on Europe’s side, she says.

Murphy also makes the point that most of the EU leaders who agreed this deal are from Conservative or Christian Democratic backgrounds. She says if something is to be incorporated into our constitution, it should reflect all political ideals and not just those of people who happen to hold power at one particular point in time.

The reality is that there are consequences for voting No, and we know that, but there are also consequences for voting Yes. Clearly inaccessibility to the ESM is an issue, but we have to consider that it’s not in the interest of the creditor countries that we are left without money. Germany and France are lending us money because they want it back – and it’s not in their interest that we be shut out of other funding options.

“We may be achieving a more stable euro, but we’re achieving it for others, not for ourselves.”

Murphy reverts to the EU’s original goals which include full employment, the improvement of economic and social cohesion, and solidarity between countries. She reckons countries have become “hostage to the money markets” and have lost sight of these original ideals.

Chairman Dominic Hannigan kicks off the questions, with Paschal Donohoe (FG) first up. He says there’s nothing in this treaty which stops a debt write-down for Ireland, and ratification doesn’t mean Ireland is handcuffed to its existing debt. To say it precludes write-downs in the future is wrong, he says. On her criticisms that the treaty is intergovernmental, Donohoe says this is a necessary evil because the UK opted not to think of it.

Donohoe says left-wing ideology like Murphy’s would oppose the creation of new supranational institutions like the International Criminal Court, even when such institutions are welcome. This treaty uses the EU’s institutions to implement an intergovernmental treaty, he says – that’s just the way it has to be.

Donohoe also wonders whether Murphy has contemplated the austerity which Ireland would need if it lost bailout funding – they would be much more dramatic than the cost-cutting which is demanded by the fiscal compact.

Next up is Donohoe’s FG colleague Bernard Durkan, a constituency colleague of Murphy’s in Kildare North. He wonders whether any exploration has been done about looking for a debt writedown before at least paying some of the debts back – pointing out that Ireland hasn’t yet repaid any bailout funding, and therefore shouldn’t be looking yet for a deal to restructure it.

He mentions how Germany is seen as a “bad boy” now, and wonders whether people have considered how Germany’s standard of living fell by austerity when the country was reunified, in a project supported by the wider world. “Do you accept a responsibility to balancing the national books as a prelude to returning to economic independence?” he asks.

Durkan mentions that intergovernmental lending is no different to any other lending: the whole point is getting the money back. Is it not accepted, he says, that if there was an easier way out of this crisis, we probably would have pursued it?

Timmy Dooley (FF) is next, and discusses Murphy’s assertion that the treaty aims to protect the ‘core’ European countries. He says he has sympathy for this idea, and that perhaps it hasn’t been raised enough at European Council level, but that this idea nonetheless isn’t the genesis for the fiscal compact, which is more concerned simply with balancing income with spending.

Dooley says people on the No side occasionally gloss over how we lost our ability to tax and spend, perhaps because doing so means you have to advocate the opposing financial policy. Dooley says the compact appears, to him, to lay down a measure by which we simply don’t have to concern ourselves with losing these powers again.

Here’s Padraig MacLoghlainn, who says there doesn’t appear to be any appetite – on either the Yes or No sides – for the economic regime required of the treaty. He says he wants to tease through the relationship between the compact and the ESM, again asserting that a No vote means Ireland can go back to the EU with a view to getting a slightly more friendly deal.

(You may have noticed, by this stage, that very few of these ‘questions’ actually take the form of inquiries to the person giving evidence. MacLoghlainn has simply asked for Murphy’s “views on that”.)

MacLoghlainn also wants Murphy’s views on the belief that this treaty is ‘much ado about nothing’, an argument he says would naturally favour a Yes vote because it plays down its consequences.

Murphy responds to the questions, beginning with Donohoe. Murphy says the treaty doesn’t explicitly preclude a write-down, but signing this kind of contract is a “very powerful stick to beat you with”. The ECB’s Jorg Rasmussen made the point well, she says: seeking a write-down on promissory notes is very tough because Ireland has already tried to assert its support for the scheme.

In those circumstances, Murphy said, this treaty is particularly worrysome because it appears to exist outside of any democratic oversight – that there’s no constant body which can offer some kind of oversight. “You’re saying that it’ll have the benefit of the institutions of the EU – but in actual fact it’s an entirely different body, this intergovernmental arrangement,” she says.

Murphy says she doesn’t have “a magic wand” to try and bridge the gap between spending and income, but applying this treaty to the letter could leave us in a ruinous situation.

Addressing Durkan’s comments about Germany being a “bad boy”, Murphy gives credit to some German voices who have been positive about Ireland’s need for leeway. She says, though, that the solidarity of an EU of equals risks being broken at this point.

To Dooley, she says not every country would have had the same approach to economic management as we had: the idea that if we had the money, we would spend it. She cracks a joke that a constituency colleague of herself and Durkan, Charlie McCreevy, was the chief architect of this policy.

Dooley intervenes to clarify that this wasn’t really his point, and irons out that he meant Ireland’s economic system in a broader way. Murphy clarifies that she didn’t mean specifically to refer to the policies of individual ministers.

On the constitutional point, Murphy says the wording we’re inserting into the constitution is on a par with the other European treaties – even though we would all agree that broader EU treaties should be held on a higher plane than this intergovernmental one. Murphy says she wouldn’t have supported the “dangerous” wording of a constitutional amendment, and that she would have preferred a simple ratification vote rather than a constitutional amendment.

Murphy says she actually has form on this – she says the wording of the Oireachtas Inquiries referendum also fell more because of its wording, and not because of its broader goals. She says “a less equal wording to that of EU treaties would have been less damaging”.

At this point Durkan comes in, arguing an alternative non-constitutional vote would have led to a challenge on constitutional grounds – making it possible that someone could challenge the very matter on which people voted, irrespective of the fact that it had been given a popular mandate.

Murphy says the provisions of the constitution must be read in harmony, and says this is made more difficult by the inclusion of the proposed wording which appears to be at odds with Ireland’s fundamental description as a democracy (which is lost by the sacrifice of accountability to this new intergovernmental organisation).

“There are going to be other voices in Europe, and already we’re starting to see some of them,” Murphy says. She reports that Gerhard Schroder’s former justice minister is bringing a constitutional challenge in Germany, saying the deal undermines the competencies of national parliaments to agree their own budgets.

“We may well have lost our ability to fund ourselves, we may have a very sizeable deficit – both our fiscal deficit and our borrowings, most of which are private debts… but that doesn’t mean we’re not a sovereign state,” she says – a point that has been hammered home by the Troika. “We’ve got to hold onto the sovereignty we have.”

That brings Murphy’s Q&A to an end; it’s now housekeeping from Hannigan, who is outlining tomorrow’s agenda – including economists in the morning session (9:45am), and sociologists at 11:30am. “Make sure you get your sleep tonight,” he says.

And with that, we’re done for the day. Thanks for reading!

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About the author:

Hugh O'Connell