The European Union is a failing system and has a democratic deficit, an Oireachtas committee was told today by a British MP.

William Cash, MP and chairman of the European Scrutiny Committee to the House of Commons, told the Oireachtas Sub-Committee on the EU Fiscal Treaty that the EU is a failing system as it is not matching up to expectations of the people and there is a democratic deficit at the heart of it.

Mr Cash added that it is facing disorder, and there is a need to renegotiate the treaties to stabilise the situation.

He said that the Fiscal Treaty is leading Europe into very dangerous water.

A report published today by his committee says that the treaty sets a very dangerous precedent.

He added that the situation will get much worse and said "he would be seriously worried, very worried, if we [Britain] were in eurozone".

He said this has nothing to do with euro scepticism, as his committee's report is based on an evaluation of analysis from independent experts.

MEP Marian Harkin told the Oireachtas Committee that it worries her greatly what MP William Cash had to say.

She said it was difficult for a politician to support the treaty if it is contrary to European law, adding that she will study his report.

Ms Harkin also said, as it is presently constructed, the euro does not favour Ireland as the interest rates favour larger countries who are always in surplus.

She added that she believes this is changing.

She said she is supporting the upcoming treaty, as it is linked to accessing funding from the ESM; if it was not linked to the ESM she said she would be vote no.

MEP Nessa Childers said that, as an MEP, it is difficult for her to support the Fiscal Treaty, but she feels the risk of not being able to access funding from the ESM in the future is too great.

She believes the Government is playing a delicate game, and that supporting the treaty is part of a wider negotiating strategy.

She feels, however, that the treaty will fail across Europe anyway and "will wither on the vine" and that it will not work.

She added that Ireland cannot be seen to be responsible for that.

She said no one has given a credible alternative to the treaty, and at this point in time there is a risk to us if we vote no, and that risk is too great.

The treaty will be put to the people in a referendum on Thursday 31 May.

Today's meeting was the start of an intensive series of debates in which the pros and cons of the treaty will be considered over three days.

Czech ambassador Tomas Kafka, whose country has not yet signed up to the treaty, said it was about rebuilding mutual trust and confidence and if it worked, he foresaw the idea of eurobonds coming back into consideration.

The Greek Ambassador said most of Greece's proposals on the treaty were accepted.

Diana Zagorianou-Prifti said Greece had implemented its bailout programme well.

She said the deficit was decreased by 5% in one year and salaries had become extremely competitive, but the impact had been severe on Greek citizens.

Socialist MEP Paul Murphy said it was implied in the contribution of the Czech ambassador that his country could sign the treaty later.

Mr Murphy said this flew in the face of statements by the Taoiseach that ''the train leaves'' in January 2013.

Fianna Fáil Senator Terry Leyden said Ireland was the only democratic country in Europe as far as the referendum went as we were giving the people a chance to vote.

He congratulated Greece on getting what he said was a "better deal than we got or probably ever will get" as far as the bailout was concerned.