Coalition will not veto or hold poll on ESM, says Noonan

Fri, Jun 8, 2012, 01:00

MINISTER FOR Finance Michael Noonan said the Government had no intention of trying to veto the European Stability Mechanism (ESM). Neither, he added, could Ireland prevent is establishment.

Mr Noonan also said there would be no referendum on the ESM treaty. “The ESM is a funding agreement which is fully compatible with the Irish Constitution,” he added.

“Ireland’s participation in the ESM does not in any way serve to limit the sovereignty of the State in the exercise of its economic affairs.” He was introducing the European Stability Mechanism Bill 2012, which is needed to allow Ireland to ratify the ESM treaty.

Mr Noonan said that the Government believed the availability to Ireland of a credible funding backup, as provided in the ESM treaty, would be very important in terms of market re-entry and leaving the EU-IMF programme.

“There is no clear answer to the question as to where else financial assistance could be found were a situation to evolve in which we required further assistance,” he added. “Enacting the ESM Bill 2012 before us today, and ratifying the ESM treaty, will ensure that Ireland has access to this funding safety net if our efforts to reaccess the market are delayed in any way and we need to resort to further assistance.” Mr Noonan said that the effective lending capacity of the ESM would be €500 billion.

Fianna Fáil finance spokesman Michael McGrath said his party would support the Bill.

“We believe that the establishment of the ESM is important for Europe and Ireland,” he added.

“While we were not voting on the ESM, issues pertaining to the establishment and the operation of the ESM, and its relevance, were very well ventilated over the past number of weeks during the fiscal stability referendum campaign.”

He said that three years into the economic crisis, Europe still did not have a common agreed framework for winding down insolvent banks and avoiding all costs falling on taxpayers.

Sinn Féin finance spokesman Pearse Doherty said the euro zone crisis was deepening daily.

“Nobel Prize-winning economists inform us the euro has only a 50-50 chance of survival,” he added. Mr Doherty said that since 2010, the populations of Greece, Ireland and Portugal had been paying the price for an economic crisis that they had not created.

“We are being forced to pay the bills of the bankers, speculators, developers and politicians who ran our economies into the ground,” he added.

“While some of these individuals were home-grown, many were from the stronger economies of the EU, including France and Germany.”

Mr Doherty said Sinn Féin’s firm view was that Ireland and the euro zone as a whole needed an emergency funding mechanism.

People Before Profit TD Richard Boyd Barrett said the House was considering a permanent austerity mechanism, not a stability mechanism. “The treaty makes this very clear,” he added.

“Assistance is strictly conditional on the ESM dictating further austerity measures to be imposed on ordinary citizens taking responsibility for the gambling debts of bankers and speculators.”