Stephen Donnelly (Wicklow, Social Democrats) | Oireachtas source

The witnesses have identified Ireland's debt level and in that context, I am very interested in the question posed by the Chairman. I am not sure it was answered in terms of whether any EU country is actually paying down debt. The answer given related to ratios. I am interested in finding out if any country is actually reducing the euro amount of debt.

One element of Ireland's debt is the promissory notes which arose out of a deal that was done between the Irish State, the Irish Central Bank and the European Central Bank. Approximately €20 billion remains to be paid. At an EU level, that is a small amount but scaled up for Mr. Martínez Mongay's country, Spain, it would be about €170 billion or scaled up for Germany it would be about €400 billion. Given the size of Ireland's economy, a €20 billion debt is very significant. The debt was incurred at the insistence of Mr. Jean Claude Trichet, who told our Minister for Finance that a bomb would go off in Dublin if he considered burden sharing with private sector investors in private banks. I believe it to be odious debt, legally and therefore, challengeable. This promissory note debt is attached solely and exclusively to two dead banks, namely Anglo Irish Bank and Irish Nationwide, in which the State had no stake or guarantee in place. The State was essentially forced, in the face of a very serious threat by the then President of the ECB, Mr. Jean Claude Trichet, to pay this money down. The State wrote an I.O.U which was then subsequently turned into these promissory notes. Does the Commission believe, in the spirit of reducing debt and in the spirit of social fairness, that Ireland has a case to make to have this debt reduced? Would the Commission be sympathetic to the argument that a €20 billion is still a serious amount of debt that would, if it were in Germany, amount to €400 billion? It is an IOU against two dead banks that have been prosecuted for illegal behaviour and for which the State had provided no guarantees. The State was essentially forced to bail them out by Mr. Trichet. Is there a case to be made that the Commission would support? Is there a case for burden sharing or - if one were a monetary purist, as many of the German authorities are - setting it at 0% for 200 years? In the latter instance, inflation would essentially get rid of it but we would not have to tear it up.