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

I thank the Tánaiste for attending and wish him energy and fortitude for the Presidency of the EU. It is time to remind all member states of the primary principle of closer union which underpinned the establishment of the EU. Every member state knew that when it joined, including Great Britain. It is funny that there should now be some emotional or mental doubt about the closer union they knew would be committed to when they joined.

I am delighted to hear that progress is being made by applicant and accession countries. The creation of the EU represents the best, largest and most wonderful achievement of mankind in modern times. There has been no war since 1945 other than those taking place outside the territory of the EU. The heart and soul of the EU project is that it is a community. This represents the fundamental cornerstone politically and philosophically of our Presidency.

However, there are also the nuts and bolts finance issues to consider. The facts show that there is a remission in the parlous state of the world financial system and eurozone. Bank balance sheets remain hugely buckled and doubtful. Provisioning is understated. The fact that Basel III has been pushed out to 2019 is an expression of the doubt that exists. The off-balance sheet liabilities of institutions are huge. Deutsche Bank has a €2.2 trillion balance sheet. These nettles must be grasped courageously and firmly. It must be asked if the financial markets system has failed when 26 million people are unemployed in the EU, which is unacceptable. In the United States of America, the unemployment rate hovers around 9%, which is also unacceptable. Notwithstanding the foregoing, the gap with the incomes of the few who control the greater percentage of wealth is widening. We must go back to the drawing board and address the basics with radical and courageous thought.

That is the general picture, but I turn to the particular case of Ireland where at least €65 billion in private banking system losses have been channelled via financial engineering to become the sovereign debt of the State. It is unsustainable by any measure when added to the huge national levels of household and private commercial debt. We were told 18 months ago that technical papers were being drawn up which is why I do not buy statements to the committee to the same effect now. There is recognition in principle that it is an odious debt which remains locked into our banking system comprising the dead banks in the IBRC and the survivor - I would not call them pillar - banks. The system is unable to deal with the enlarging mortgage crisis. As the Governor of the Central Bank admitted last week, the mortgage crisis is interlocked with the capital resources of the banks. As we now see, they will have to start writing down and recalibrating mortgage and business loans, which will require more capital. That capital should come from------