Stephen Donnelly (Wicklow, Independent)

Last December, the Minister for Finance, Deputy Michael Noonan, then Opposition spokesperson for finance, said the deal was a downright obscenity. I agree with him. It represents a real loss of independence for the Irish people. That independence has been ceded to a group of economists who, at best, have a shaky track record in helping countries to rebuild their economies. Nearly half the money from the deal is being used to bail out unguaranteed bondholders. Those loaning us the money are making significant profits by lending to us at a much higher interest rate than that at which they are borrowing the money. It is an austerity-based approach, which from economic history we are aware does not work. The deal represents a transfer of wealth from the most vulnerable people in society to the super rich around the world.

One could ask where we are six months later. Yesterday, the Minister indicated that we are meeting the targets, as nominally agreed by Fianna Fáil in the previous Government. Let us look at what is happening in the real economy. Government debt has been downgraded to one notch above junk status. Bank debt has been downgraded to junk status. Unemployment is due to rise by tens of thousands and the growth forecast, unsurprisingly, has been halved.

What will happen next? The Government states in the report that it will meet the 3% deficit target. It has consistently said it will not raise taxes and over the past weekend, the Taoiseach said he would protect public sector pay at all costs. With growth halved and with us still having to meet the 3% target, there are only two options left open to the Government. It can cut social welfare and cut services. Therefore, what we are saying is that in the coming months and years, we will take, yet again, from the most vulnerable people in our society. We will take from education and will allow class sizes increase. We will take from health and will close wards and cancel operations. However, we will continue to pay tens of billions of euro to private companies that invested in Irish banks. We will continue to pour tens of billions of euro into these failed banks and will continue to pay millions to their failed leaders. We will also continue to pay billions of euro in profit to those who are lending us the money to pay these bankers and lenders.

I agree that when made in December this deal was - it still is - an obscenity and I have no doubt it hurts the Minister to have to come into the House and report on its progress. The Government claims repeatedly to have a mandate, and it does. It has a mandate to stand up to foreign powers and to fight for the Irish people and to regain our independence. It has a mandate to stand up to powerful investors and bankers. However, it does not have a mandate to continue to implement Fianna Fáil policy, nor does it have a mandate to do the opposite of what it said it would do during the general election campaign. Many Government Deputies spoke in the House yesterday of the Government being in a straightjacket and of it having its hands tied by the failed policies of the previous Government. This is true to a point, but there are options which are not being used.

We can assemble a team and go out to Ireland and abroad and get some of the finest academic, economic and financial minds together to help the Minister. We can get some of the finest negotiators and assemble a world class team rather than rely on the same policy advisers who advised the previous Government which got us into this position. We can call the Europeans out on their threats. If they insist that all senior bondholders must be paid so that the bond markets in Europe do not get spooked, we should say fine but insist that we all pay, because that will benefit everybody.

Or we can be creative. We can agree we will pay back the €35 billion, but not for ten years, because we do not have the money because the Irish people are bleeding and scared and there is no cash to pay. If the Europeans threaten to increase the cost of funding to the banks should we not pay them back, which we understand from Professor Honohan they are doing, we can call them on that. We can tell them to go ahead because we are prepared to let some of the banks fail. The core European countries do not want any European banks to fail. Therefore, we should all deal with the issue together. We should not just leave it to the Irish people to deal with it.

We can communicate with the French and German public. They believe that they are bailing us out and their politicians are acting accordingly. We can explain to them that the reverse is true and that it is the Irish people who are bailing out their investors and banks. We can use debt for equity swaps to both stop the payments of our money to bondholders and to move the banks back into private ownership.

I suggest the Government can do far more than it is doing currently. It can be braver. It should remember that sometimes we need to fight and incur short term pain to protect the interests of our people and our independence.

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