Mattie McGrath (Tipperary South, Independent)

I am glad to get a chance to contribute to this debate. In the last Dáil, I voted against the so-called bailout because I believed then, and still believe, that it will only worsen this country's financial problems. That sad fact has been proven by every issue that has arisen since then concerning our inability to take action as a sovereign nation. The EU has failed to make foreign bondholders take a hit on losses from toxic real estate loans. That is the kernel of the problem in my humble opinion. Irish taxpayers are instead being asked to pay the bill at a punitive interest rate of 5.8% to ensure that foreign creditors will get their money back, rather than face any losses. This is totally inequitable, unfair and morally wrong.

I have been a small businessman since 1982 and the word "default" is anathema to me and to most right-thinking people. This system is set up for default, however, because we just cannot pay it. Thankfully, the IMF part of it is not as expensive as the part from our so-called EU friends. We had a high standing in Europe where we punched above our weight. I welcome the initiative of the Minister, Deputy Pat Rabbitte, to travel around Europe and meet with our ambassadors and others in order to promote our good name again. We are a race of good, honest people who can be trusted, but we cannot pay our debts when we have been blindfolded, with our hands tied behind our back, and are being beaten with a whip. I do not want to use emotive language but that is how I see it. We are being asked to do something, yet we have been put in a straitjacket and cannot do it.

In my business, if I have a contract I must carry out the job by all reasonable means. If so, I will be rewarded by being paid the agreed price. This contract, however, was signed up to by the previous Government without consulting the people. On two occasions during those discussions at the EU, I was in contact with the then Minister for Finance, Deputy Brian Lenihan. I pleaded with him not to sign the deal and to come home. I felt bad when the deal was done. These greedy, faceless people would have been back here on the first plane the next day because at that time the euro was unfortunately on the brink. Everyone knows that now, but we were given very limited information at the time. I was a Government backbencher then, as a member of the party without taking the Whip, and I always had a good relationship with the then Minister for Finance. We were told that we had no choice and that we had nothing else. I asked the then Minister afterwards "Who did this deal? Who was out there on our behalf?" We had the wrong people out there with him, including the Minister, because they had no understanding of business deals, or of the ability or inability to pay. They were depending on public officials. I am not condemning all public officials, but we need business people who understand the real world of money and how hard it is to repay. It is a question of knowing whether one can or cannot repay debt, even with growth in the economy, not to mind the situation we are in now. Unfortunately, a bad deal was done which also coerced us to dig into our National Pensions Reserve Fund. It was always quoted as a €85 billion deal, but €17.5 billion of our own money was put in first. We were forced to use up to €30 billion of our own money, so it is a clean-out and should never have been described as a bailout. That terminology was used despite the fact that we used our hard-earned pension fund that was so badly needed for other matters. It was a real bullying job, despite the fact that we voted for Lisbon 2. I know what the Irish people will do with any further EU treaties because they were denied the opportunity to vote on this issue. I cannot understand why that vote was denied because it would have strengthened the new Government's hand. It got a huge mandate from the electorate and I supported it in the vote for Taoiseach and other posts. I wished them well and still do, but they must utilise public support. The Government claims the vote it received in the election was a mandate and so it was, but they did not use it. They seem to be using the very same policies as before. It seems that we are helpless in a straight-jacket with our hands behind or back, blindfolded and the whip is out again. They are telling us what we must do, but we are unable to do it.

We have had debates on suicide prevention and financial institutions, but the lifeblood is being taken out of the economy. People do not have the wherewithal to maintain their own standard of living. We have also discussed residential mortgage debt, but many people cannot repay their home loans even though they are trying their best to do so. In such circumstances, they cannot spend money on day-to-day expenses, such as putting food on the table, clothing their children and sending them to school. We can see the result of it in shops and elsewhere.

It has been proven that the ECB pushed this situation onto us in order to protect the euro. That currency had to be protected, but not at this cost to us. The agreement had more to do with saving the euro project than it did with saving Ireland. Current interest rates will saddle us with unsustainable debt, which will see our economic circumstances deteriorate further every year. That situation is untenable and frightening for ordinary working people and the unemployed. It is also frightening for small businesses, which are the lifeblood of the economy. While we welcome the multinationals - there are a lot of them in my constituency - they come and go. Many of them have shown that when tax reliefs go they will depart. Given the competition from eastern Europe and elsewhere, the multinationals are voting with their feet and with their hands in their pockets. That is the way it is.

We are not allowed and we do not have the wherewithal to transact business.

I have a small business and I renewed my insurance in recent days, but insurance premia have gone through the roof. It was a complete racket for a number of years but thanks to the action of various Governments, premia were reduced. They have increased again and this is being blamed on inclement weather and so on. It is not possible to get a loan to even finance the insurance payments and, even if one gets one, the cheapest interest rate is 7.5% because the banks do not want to give out money. They do not have the credit.

I was a member of a Government which promised 18 months ago that both AIB and Bank of Ireland would release €3 billion each into the economy to be aimed at businesses and, in particular, small business. When their plans were eventually submitted to the Minister for Finance, they were returned because they were not good enough. The issue was avoided and not a cent was provided to business. Banks are lying through the teeth. They do not have the money and they are not giving it out.

Their loan statistics are total nonsense. No account is taken of people such as myself who walk up to a bank counter or who telephone the bank manager only to be told not to bother coming in because there is no point and it would be a waste of time. Others are called into the bank to discuss their overdraft and before they leave, the overdraft is taken from them and converted into a term loan and this is included in their statistics as a new loan. They are taking away overdrafts from good business people who have built up credit over the years. An overdraft facility is the lifeblood of any business. Some people have worked for 25 years to build up their credit but when they are called in, it is wiped away and converted to a term loan, which is considered to be a business loan and a new transaction. We are only fooling ourselves if we think we can continue like this. We have to change.

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