Stephen Donnelly (Wicklow, Independent) | Oireachtas source

With the agreement of the House, I will share my time with Deputy Boyd Barrett. As I have only five minutes to speak, I will touch on a few issues. The first is the single supervisory mechanism which came out of the recent meeting. The logic of the mechanism goes as follows. It will lower the risk because if the ECB is in charge of the banks, we will not repeat the mistakes of the past. This is not necessarily true. It is a dangerous logic of which I hope the Taoiseach will be cognisant during our Presidency. The argument goes that if the ECB is in charge, the banks will be better regulated than they were in the past. For that to be true, the ECB must be technically proficient, but the ECB has been technically flawed in its response to the eurozone crisis, as we know. Two decisions, in particular, have hit Ireland. The first was that no European bank should be allowed fail. The second was that no senior bondholder would incur any cost to their investment. We all know the result of that for us in Ireland. Not only does the ECB act in an economically technically flawed manner. Its reactions, particularly in those two issues which have socialised private sector losses, are immoral, certainly as judged by the values of our society and of the European project.

Something potentially dangerous is happening here. An institution that has acted technically incompetently and, in an immoral way, contrary to the values of our society and of the European project is being put in charge because there is a general acceptance that it knows best. I ask the Taoiseach to be cognisant of this when he is at the helm. They do not, necessarily, know best. They have not acted well. Many of the people in the ECB were in the central banks of the eurozone that did not act correctly. If the ECB gets it wrong, and inevitably it will, it becomes a systemic problem. If an isolated error is made, in Ireland, Spain or wherever, the system can correct itself. If the ECB gets regulation wrong, and it is more than capable of getting it spectacularly wrong, the error will apply everywhere in the eurozone. I ask the Taoiseach to be very cognisant of that.

The second issue is President Schulz's concern about democratic accountability which he has raised several times. I am deeply concerned about this. I have looked in detail at the two pack, the six pack, the fiscal compact and all of these bits and pieces. They are incredibly complicated. In the Joint Committee on Finance, Public Expenditure and Reform, we struggle every week trying to get our heads around the implications. As the rules become more complex and numerous there is an inevitable ceding of democratic control by elected representatives, like the Members of this House, to technocrats. This is something of which we need to be very careful.

I was particularly concerned by some of President Von Rompuy's recommendations. The Taoiseach mentioned agreements of a contractual nature. My understanding of what President Von Rompuy is saying is that when the nation states submit their budgets to the European Council, invisible technocrats will look at them against a wide range of economic measures and the Council will then make suggestions to the nation states to correct their budgets. President Von Rompuy seems to be saying that he does not want these to be suggestions. I believe President Schulz's concerns about democratic accountability are very profound and serious.

The final issue is the promissory note, the perception of Ireland and an opportunity we may have. I believe the promissory note should not be paid. It should not be restructured, unless it is to repay a euro a year for 30 billion years, or something. It should not be restructured. We should not pay it. I am not in charge, however, so that is just my opinion. Some of the resistance is due to a clear perception in the eurozone establishment that we are doing fine and that we can deal with it.

I am impressed by how the international media are reporting the Taoiseach as we come up to our Presidency. The Taoiseach is being reported as clearly saying Ireland needs a substantial deal on the banking debt, and not letting go of that. That is to be commended. My concern is that, during the Presidency, senior European politicians and technocrats will fly in, stay in the Merrion Hotel, be wined and dined in Iveagh House or Dublin Castle and fly out. My concern is what they will not see. The Taoiseach and his team must be creative and think of ways for them to see the food queues at the Capuchin centre, for example, and the impact of 435,000 people unemployed.

As the Taoiseach goes into these negotiations, I repeat my warning about the danger of limited success. There is a danger that we will get a small deal and that the Taoiseach will feel he has to take it, bring it back and claim it as success. That would be analogous to a distressed mortgage being moved to interest only. We need a very big deal. A small deal may be worse, in the short term, than a big deal.

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