Beverley Flynn (Mayo, Fianna Fail)

I welcome the opportunity to contribute to the debate on this Bill. I begin by acknowledging the Damascus-like conversion my colleague on the other side of the Chamber has apparently undergone on behalf of his party. We welcome his support for the Bill and his comments on the examination of our budgets by a peer review group. Both Deputy Durkan, who is Chairman of the Oireachtas Committee on European Affairs, and his party's spokesperson on European affairs were remarkably silent in recent days when their finance spokesperson made the crazy and outrageous suggestions that we would lose our sovereignty in respect of fiscal policy as a result of these proposals and that our low corporation tax rate might be at risk. I welcome the Deputy's contribution as a signal that he did not agree with those statements.

It is disappointing that this Bill is necessary but it is important that we play our part in bringing about the stability of the euro currency and the euro economy. We will help to protect Greece by operating these repayable loans which will be channelled through the European Commission in conjunction with the IMF. It is to be welcomed that the loans are being given on a conditionality basis. It is important that those conditions are monitored carefully, as laid out in the Bill and as per the agreement between the member states. It is important that Ireland moves, like our fellow member states, to provide confidence within the eurozone. Instability in this regard has implications for the greater economy and for Ireland in particular. We have a vested interest in moving to support Greece at this particular time. It is important that as a community, European Union member states show solidarity with each other. Deputy Noonan referred to contagion. We are all concerned about any such prospect or risk in other eurozone member states.

The loan facility has come about because Greece was not in a position to borrow on international bond markets at sustainable rates. It proved necessary to agree a package which would allow Greece to avoid going to the market for its funding requirement for some time. The package amounts to €110 billion over a three year period, €80 billion of which is provided by the euro area, with the remainder provided by the International Monetary Fund. As noted in the Bill, Ireland's share of the package will be €1.3 billion, although I note the relevant section makes provision for a share of €1.5 billion. Possible short-term fluctuations will, however, be reconciled at a later stage. Ireland's share of €1.3 billion is arrived at as a result of our paid up capital at the European Central Bank.

It is understandable that people on the street will ask how we can afford to fork out €1.3 billion to Greece when we are borrowing €20 billion per annum to run the country. The overriding purpose of the loan facility is to support Greece and safeguard the financial stability of the euro area, including Ireland. Members of the public as well as the major political parties, all of which support the measure, realise there is no alternative to the loan facility provided for in the Bill. It is important to recognise that Greece will repay the funding provided when times improve. In addition, member states' funding costs are being met without an imposition on the taxpayer.

In providing this loan facility to Greece, a number of important agreements have been entered into. These include the loan facility agreement, which sets out the details of the loan, an inter-creditor agreement and a memorandum of economic and financial policy. The memorandum is important because it outlines the economic and financial policies the Greek Government must implement by 2013 to strengthen market confidence in the country's fiscal and financial position. The Greek Government must implement a number of ambitious measures by 2013 to ensure the country does not default on its bonds in future.

A further key agreement entered into as part of the loan facility is the memorandum of understanding on specific economic policy conditionality, which specifies the detailed economic policy measures that will serve as benchmarks for assessing policy performance in the context of quarterly reviews. I welcome the provision to hold quarterly reviews as it will prevent a future crisis by enabling us to determine whether Greece is playing its part in line with the various agreements. Other member states will, therefore, have early signals if the country is failing to do so.

The measures Greece must implement include public sector wage reductions, a cut in pension outlay and increases in excise taxes and VAT. The overall adjustment package amounts to €13 billion or 13% of GDP between now and 2014. There is no doubt that these ambitious targets will inflict a significant amount of pain. Ireland has successfully introduced adjustment measures to stabilise the position in this country. If we are to play our part by taking difficult decisions here, it is important that other countries, particularly those being given a substantial helping hand, take similar measures.

The position in Ireland differs greatly from that of Greece. Our economic position is much stronger than that of Greece, which has serious underlying competitiveness problems and high debt levels. Furthermore, until now the market did not believe Greece could deliver the necessary austerity measures. Ireland has demonstrated, in its budgetary process over the past 18 months to two years, that it is in a position to deliver such measures. The markets have observed our capacity in this regard and responded accordingly. As a result, we are well on the way to restoring stability to the public finances.

The ESRI and many other economic bodies have indicated that Ireland will enter growth towards the end of this year and achieve a growth rate of 3% in 2011. These are early signs that the country is taking the correct steps. As I indicated, we want assurance from the Greek Government that it is also in a position to take such steps. The quarterly reports to the eurozone group will be of particular importance in this regard. Prior to decisions being taken on the disbursement of the subsequent tranches of the loan to Greece, the European Commission will ascertain whether Greece is fulfilling its obligations under the conditionality part of the agreement.

It is important for Ireland to stand with other countries in Europe at this time. It is good to note so much agreement in the House on this measure. For this reason, I commend the Bill to the House.

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