Peter Mathews (Dublin South, Fine Gael) | Oireachtas source

I thank the delegation for attending the committee and for the papers they presented and the work they do. The key point I noted that resonated across the paper was that debt sustainability remains fragile. I concur with almost 90% of what Deputy Higgins said earlier. The council’s brief is macroeconomically scaled. It does not go into the branches or the boughs of the trees; instead, it is looking at the forest outline. Within that forest, there is a larger landscape of the financial system, the eurozone and even the world financial system. If Ireland is fragile as regards debt sustainability, the eurozone’s financial system is super-fragile.

In November 2010, Timothy Geithner vetoed a credit restructuring or write-down of Irish banking funding. Greece’s write-downs had not occurred at that stage. If that had happened, we would have been the first in a cascade across the financial system. Tuesday’s letter from the Dutch, Finnish and German finance Ministers is one hell of a disappointment. It is also one hell of an unacceptable U-turn. Ireland actually saved the euro back in November 2010. The euro system had an exposure of at least €135 billion to Ireland. If that had buckled, the whole framework would have buckled and God knows what would have happened. It is still fragile. Simon Johnson of Massachusetts Institute of Technology, MIT, wrote an article recently in which he examined Deutsche Bank, which I mentioned at the committee a year ago. My son, who has emigrated to Australia, prompted me to have a look at this article. Deutsche Bank is over-leveraged, under-capitalised and carrying suspect assets on its balance sheet. Its balance sheet is the equivalent of 80% of the German economy’s gross domestic product. That is how serious the whole matter is. Here we are frightening ourselves, walking on eggshells, when the eggshells are smashed. We can put on boots to walk around the mess that has been left. We should not be afraid, on the next due date of a bond for AIB - a bank we own - to say that borrowing more European Central Bank or emergency liquidity assistance, ELA, moneys to pay this bond is a farce and we actually want to discuss creditor restructuring.

We have already raided the pension fund, robbing it of €20 billion to stick into banks that are bust. Leaving a residual shareholder proportion of 15% in Bank of Ireland is the daftest move, considering the earlier discussion of covering all liabilities. There would be no deposits in that bank if the State did not support it, admittedly in a fragile and wobbly way through the euro system. It is all so interconnected and so farcical.

It is true the processing of €70 billion of loans into sovereign loans on the backs of Irish citizens is misplaced, odious, unjustified and should not happen. Instead, a restructuring and write-off is long overdue. We should all stand up for the people of Ireland and take off any of the restrictive paraphernalia that we have worn from yesteryear when the establishment had certain norms and protocols of discussion. We have gone beyond that; we are in a battle zone. I am not saying we should become brutal or boorish in our approach. Instead, we must become assertive. We have to tell Mr. Draghi that we do not have the money for the bond now coming due and we are not borrowing on historical terms. They will be over here fast - cash concentrates the mind. The euro system will buckle. They will want us instead to pretend that all is well.

We should all get down and talk real. Deutsche Bank should talk real, as well as all the other European banks such as the Spanish banks. The latter claim they need only €100 billion when they need at least €500 billion.