Lucinda Creighton (Dublin South East, Fine Gael)

As many of the questions are interlinked, I will try to provide for as much clarity as I can.

The outcome of the referendum changes matters a little from Ireland's perspective on the debt burden. I do not wish to overstate it, however, as we have already been criticised in the media and elsewhere for linking the result on Friday with the issue of bank debt. I do not wish to do that because we have said all along that they are separate issues. The decision in the referendum was one for the people, but, of course, there is some interrelation. The "Yes" vote strengthens our hand and changes the way in which the Government is looking at this issue and the way in which we are looking for opportunities. There will be a period of reflection, both with the Department of Finance and the Economic Management Council, as well in the Cabinet more generally, to see how we can leverage the "Yes" vote to our advantage. We will be exploring all opportunities in this regard.

Deputy Gerry Adams is incorrect that the Spanish have looked for a specific role for the permanent stability fund to recapitalise Spanish banks. They have not done so. There have been much speculation and discourse in the media and among politicians here about opportunities this could potentially present for Ireland, but as it has not happened yet, we will have to wait and see.

We sought leniency and flexibility on the overall debt burden last year, as Deputies are aware. The Minister for Finance explored the options available with the IMF and our European partners, but it was apparent that there was no entertaining it at that stage. We did succeed in having the interest rate reducing and the maturities of our loans extended. The interest rates are almost at rock bottom in terms of how low they can go, which is good news. We have had this conversation many times and it saves the State about €10 billion. There has been a burning of subordinated bondholders. As it has been minimal, I would not like to overstate it, but there has been a certain amount of progress made. The main priority for the Government in terms of debt sustainability has been dealing with the promissory notes. I am very optimistic about what can be achieved in that regard. It is a separate issue from the overall debt burden and the question of banking debt being part of sovereign debt. However, to deal with the promissory notes, I am very optimistic that the "Yes" vote enhances our opportunities. I know some believed it might happen before the summer, but I never believed that could happen for the simple political reason that there were elections due to be held in France and Greece. I always considered there would be a window of opportunity in the autumn and think we will get a deal on the promissory notes.

The promissory notes are the first element. The second is the issue of banking debt forming part of sovereign debt. I am optimistic that something can happen in that regard, but I cannot yet be specific about what will happen. Some 23% of our sovereign debt is private banking debt.

The speculation about the role of the ESM in dealing with Spanish banking debt is just that, although we would be supportive in giving a role to the ESM in directly recapitalising Spanish banks. If that were to happen, we would most certainly be looking to have it done for Ireland in the case of at least some of our banking debt, which would make it more sustainable. We have said all along that our overall sovereign debt is just about sustainable, even though it involves a huge effort. I know we disagree on that point, but doctors differ. That is our position and we have been strident in communicating it to the rest of the world. We want to be seen as a country that is able to meet its obligations and so on. This brings us back to the issue raised by Deputy Gerry Adams about a default. It is absolutely clear that we will not default. This is not a Government which is talking about a default. We could potentially explore our options, whereby we would not default on our debt, but it would be dealt with in a different manner. In other words, the ESM would assume or take over some of the debt. However, that is speculative. I am trying to be as honest as I can, but I am certainly not making any commitment about a process that is very fluid.

Our position on eurobonds is clear. The Taoiseach, the Tánaiste, the Minister for Finance and I have all said we would be supportive of a eurobonds mechanism. Ultimately, that is the only solution to deal with debt levels across the European Union, specifically the eurozone. We have been supportive of this position since long before Christmas and it is finally on the agenda. While we can deride the outcome of the informal Council meeting two weeks ago and say it achieved nothing, the whole purpose of such an informal Council meeting is to enable to Prime Ministers to come together for a genuinely frank discussion and to put items on the agenda that were previously taboo. There were other informal summits at which Heads of State and Government came together, but they did not bring the taboo issues to the table. Therefore, it is a significant milestone that the issue of eurobonds was on the agenda for the first time. There is range of options; there is not just a one-size-fits-all solution. There are three proposals from the Commission, while other member states have different proposals. It is a question of arriving at a eurobonds proposal that is workable and acceptable to all member states. It is the most important solution to the crisis which would help to inspire confidence.

I disagree with the Deputy who suggested all of this meant we would see a united states of Europe and that we would cede all power and sovereignty. We have heard of that sort of Armageddon many times. I do not believe that. There can be a half-way house. There are some good articles in The Economist of this week or last week that deal with the various stages and steps. It is not about a full-blown federation. One can have federal type solutions to certain elements. A banking union, for example, is something we would like to see. A system of eurobonds is something the Irish people and State would like to see. That does not mean we want a full united states of Europe. We are not talking about that but we are talking about closer co-operation. If we want our currency to survive, there has to be closer co-operation. It is a fact of life. I think we want our currency to survive. We had a resounding answer to that question last week when the Irish people voted in significant numbers to save our currency, in effect. We have a mandate from the referendum vote. We have a mandate with regard to the debt burden and to negotiating a better deal for Ireland. We also have a clear mandate to save our currency. I take that clear message from the outcome of the referendum and I am heartened by it. It means we can go to the table with clear proposals.

Today's debate is not the last before the Council meeting. We will be back before the summit at the end of the month. We will be working on more defined positions from the Government's perspective. We will be looking at ways to collaborate with other member states to put forward concrete proposals. Deputies can be assured we will have an opportunity to discuss those in more detail before the summit takes place.

A Deputy asked if I find, in my dealings with German colleagues, any recognition of a quid pro quo or of the fact there is not a one-way street where Germans pay into the EFSF, EFSM or the soon to be ESM and that Ireland has become a bulwark in terms of saving, and ultimately paying out to, bondholders, including German bondholders. There is a growing recognition of that but it is a slow process. The German media do not cover this issue. I use every opportunity to make this point. Yesterday, I met a delegation of German parliamentarians from the Bundestag. I believe they attended a number of committees of which Deputies are members. We had a full discussion. We must take every opportunity to make this point. Delegations from the Joint Committee on Finance, Public Expenditure and Reform have visited the Bundestag. We must get this argument into their thinking and psyche. We must do so through the media and the national discourse, and not merely through politicians. It is difficult and there is, sometimes, a one-sided view of this issue in Germany, unfortunately.

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