Dick Roche (Wicklow, Fianna Fail)

The point I was making when the debate adjourned concerned whether the eurozone is essential for Ireland. There are not many Members who would question it, but it is a reality that safeguarding the financial stability of the eurozone is particularly important to the country for a number of reasons. Businesses need financial stability to trade. We are an open economy and we depend on trade to live. Citizens need financial stability to spend and to invest with confidence. The State needs financial stability to borrow the funds necessary for public service funding.

I was particularly surprised by Deputy Reilly's contribution prior to the adjournment of the debate. He asked whether Ireland's contribution to the fund would be safeguarded and whether there was a danger that we would effectively end up subsidising the loan to Greece. He must know that is not true and that even posing those questions is alarmist. Based on the euro area contribution of €80 million, Ireland's share which is based on the ECB paid capital will be less than 1.64% of the overall fund. This means Ireland's contribution will be less than €1.5 billion, which is the figure mentioned in the Bill; the actual figure will probably be in the order of €1.3 billion.

The loans for Greece will carry an interest rate of approximately 5%. The NTMA will source the funds that Ireland is due to provide. Deputy Reilly also asked about this, and if the NTMA has to borrow the money it will do so at a significantly lower rate than the 5% stipulated. The agreement between the eurozone states provides that the funding costs of the member state participating in the financial support package will be fully covered and this is a significant point. The safeguard underpins the entire process; it provides that if any euro member state encounters higher funding costs than those charged to Greece, the additional costs will be recouped.

The Bill before us is important but it is not complex. It provides for the country's participation in the loan arrangement for Greece, permits payments to be made from the Central Fund in respect of Ireland's share of the funding, and puts a limit of €1.5 billion on our contribution. It also establishes the various accounting arrangements that will apply. The Bill is part of set of measures that go much further than merely bailing out Greece.

In addition to the Greek package, the finance and economic Ministers have decided to establish a comprehensive range of measures, including the establishment of the European financial stabilisation mechanism, and we should all welcome this. The mechanism will allow an initial €60 billion from the overall EU budget to be mobilised very rapidly if it is required. Again, this is a prudent move because we know there are significant forces willing to attack and undermine the euro which will pick off one economy after another if we do not show solidarity. Complementing this, the euro area will also make up an additional €440 billion in loan guarantees through a special purposes vehicle.

As the recent crisis developed, it became increasingly obvious that the euro area must take fundamental measures to protect the euro. These are in every citizen's interest. On 12 May we saw for the first time the type of measures the Commission considered necessary. The enhanced co-ordination recommended by the Commission was designed to assist member states to be better prepared for any future crisis. The speculative attack on the Greek economy has reverberations for the economies of all member states, in particular Ireland because smaller member states are always vulnerable to attack. For that reason, every member of the eurozone has a shared interest in increasing the co-ordination throughout the zone.

In its examination of the pressures which have emerged, the Commission has come up with a very fine paper and I ask people who are scared of it to read it in detail. It is a very fine piece of work and makes the points that we have made in various domestic debates in this House and suggests that member states did not use the good times to pay down public debt fast enough - there are very few people who would disagree with that. We happen to be one of the countries which did, thankfully, pay down national debt because had we not done so-----

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