Joan Burton (Dublin West, Labour)

Two and a half years ago, Labour Deputies, including our leader and I, advised the House not to vote for the bank guarantee. I am sorry that other parties, such as the Green, Fine Gael and Sinn Féin parties, all voted wrongly for the bank guarantee. One reason people voted for it was that, as with today's document, it was sprung on us without an opportunity in a citizen's democracy and republic for the citizens and their representatives to read, discuss and examine its contents. Twenty minutes will not do this document justice. Several elements of it which I will briefly mention will require constitutional action. I will revert to this issue.

The Minister advocates austerity and front-loading. All of his cheerleaders among the newspapers' various columnists and all of the other advocates of austerity and front-loading told us that taking the pain now would see interest rates fall. This has been the Minister's mantra for the past few weeks but the reverse has occurred. There has been no relief in interest rates and bond spreads. On the contrary, the deal has spread the contagion to Portugal and other European countries.

Eurozone Ministers, ECOFIN, the European Central Bank and the General Affairs Council must give serious consideration to what this package will do to Ireland. This is debt deflation. As the great American economist Irving Fisher wrote at the height of the Great Depression in the United States when the Hoover Government was in charge, one could deflate an economy via debt deflation. Our economy is riddled with debt. It can be found in the banks and among many young people with large personal mortgages and many businesses that have lost trade and are unable to resource financing from the banking system.

On the night of the bank guarantee, the Minister claimed it would be the cheapest bailout in the world. This programme is the bill for that bailout. Were Ireland's fiscal deficit its only problem, we would have austerity for a couple of years and probably a change of Government to return to the type of economic management practised by my colleague, Deputy Quinn, the Labour Party's last Minister for Finance and a man who left this country with a small but important budget surplus and an economy that was growing by 1,000 jobs per week. The Minister has brought into the House a document that indicates we will be hobbled by a programme that makes no provision for economic growth.

The Labour Party advocated an adjustment of €4.5 billion. It would have been tough, but achievable. Fianna Fáil and Fine Gael have opted for a front-loading of the pain through austerity measures worth €6 billion. Speaking on behalf of the Labour Party, such front-loading is economically misconceived. Even at this point, the Government should seek to renegotiate the document and provide for growth in the economy and an orderly restructuring of the country's finances. The Minister's four attempts to fix the banks so far have ended in failure, yet here is another attempt.

I do not know whether the Minister is aware of a distinguished German commentator who is resolutely pro-European, Professor Barry Eichengreen. In the Handelsblatt, Germany's Financial Times, he wrote: "The Irish 'programme' solves exactly nothing – it simply kicks the can down the road". Kicking the can down the road for Ireland is a misconceived plan to kick the can down the road for Europe. Had the Minister been a better negotiator, he would have told our European partners that not only could they make the situation better for Ireland, they could engineer a better outcome for European economies and the European currency, which is entering an existential crisis. It does not even seem as if the Minister put this argument.

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