Joan Burton (Dublin West, Labour)

Could the Minister expand on his reference to Commissioner Rehn? Commissioner Rehn has created some confusion. I said yesterday that I assume the conditionality for Greece will be monitored by the IMF, which has long experience in such conditionality.

As I stated to the Minister yesterday, when I lived in Tanzania the IMF people, with their gold tipped fountain pens and their lovely leather briefcases, sat by the pools of the swankiest hotels and drew red lines through education for children, particularly girls, and stated it had to go. They did the same to primary health care services.

It is important that the Minister clarifies what he understands to be the thinking of Commissioner Rehn. If he jets in here with a posse of IMF people with gold plated pens, will they tell us that we have to close rural primary schools and all of our rural hospitals? That is what they have done in other countries. Yesterday, I stated that Poul Rasmussen, president of the Party of European Socialists spoke about the austerity programme for Greece being the first time there has been an attempt to waterboard an entire country. The Greek austerity programme is €30 billion of tax increases and cuts over a period of less than four years in a relatively small economy like ours. That is very tough.

The Minister will attend a meeting on Friday. What is the position of the Irish Government when it is at such discussion meetings? I understand that Chancellor Merkel has problems in her country and that the two leading countries of the eurozone - France and Germany - have particular interests and that their banks are quite heavily exposed to sovereign Greek debt. What will be the position of the Minister on behalf of Ireland on Friday? Aristotle, the most famous Greek philosopher, was the person who spoke about the golden mean. If ever there was a need for a golden mean in economics it is now. Too much deflation too quickly in eurozone countries that have problems will result in a repeat of the Hoover programme during the great depression. However, of course one needs fiscal adjustment and public service reform, which will have to be very robust and painful.

Excessive deflation would destroy the euro and Germany would not be a beneficiary of that. The German economy will benefit when the rest of the European economies grow because with the recovery of the European economies demand will grow. The euro will be strengthened and the major beneficiary of a strengthening of the euro in the long run will be Germany, just as it was a major beneficiary of the process of European union in the long run because it saw an end to the Cold War and the reunification of Germany during the time of Chancellor Kohl. It is necessary to take a long-term as well as a short-term perspective.

I hope the Council of Ministers is not completely in thrall to the markets. There was a time when people felt that various countries in Europe were excessively in thrall to religion. Now, we are in thrall to this god called "the markets", and we do not seem to have any will to have a critical view of the markets. They are instruments and not gods. As I stated yesterday, it is crazy that the pension funds of European workers are being utilised to short the euro and, in effect, the European model of welfare provision for retirement. We have a tremendous challenge to sort out this huge economic situation without beggar-my-neighour policies coming from the meeting on Friday.

I do not see how it is possible to waterboard Greece and attempt to knock the stuffing out of the country in terms of the most basic developments in primary health and education, as the structural adjustment programmes did in African countries. Some years later, when there were coups in African countries, the IMF turned around and wondered how it happened. The greatest African example is Robert Mugabe. When he came to power, with the blessing of the IMF he initiated a programme of extensive spending on education and health. In the early 1980s, everybody in Zimbabwe could read. People read newspapers on buses. Some years later, in the middle of the 1980s, the IMF changed its stance and decided to have fiscal retrenchment throughout Africa. Certainly, this was not the only issue that led Robert Mugabe to become the despot he became but it was a critical event on the road.

In the deliberations of the Minister and his fellow Ministers, what chance is there of having a reasonable view of this, and of having sensible policies alongside which seek to make the euro zone recover, as opposed to doing what the Hoover Administration did which made the depression deeper instead of having a Keynesian approach? It is no accident that at present the two economies showing the best signs of recovery are the United States and the United Kingdom, because they have had systematic programmes of stimulus. Both countries have to pay, and the United Kingdom has a serious difficulty, probably to almost the same level as us, with its deficit but nonetheless its job losses, as with those of the United States, have been nothing as severe as ours or as they will be in Greece.

On Friday, the Minister will really have to try to persuade his fellow European Ministers with regard to fiscal rectitude of a type that would kill Greece. If Greece is destroyed by this programme, it will default. Why would it not? This would be a disaster for the eurozone. With regard to the package accompanying this, I appeal to the Minister to try to persuade his fellow Ministers that one cannot kill the economies of the countries in difficulty.

The United Kingdom and other countries which have their own currencies can have a competitive devaluation. We have no control over our monetary policy. The value of the euro is falling and this is of some potential benefit to us. What happened with regard to Greece was too little too late. Now, some European countries will have to bite their lip and state that not only do they expect Greece to have a reform austerity programme but that they also see a programme to allow Greece to grow economically and not destroy it.

Hedge funds and private equity people are gambling on the markets. George Soros, who later rethought many of his policies, made a vast killing on shorting the pound sterling in an earlier age. The meeting of ministers on Friday is entirely about appeasing the markets. This will not work because people have already made money on shorting Greece. Unless there is a serious prospect of recovery in Europe, they will continue to short it.

I wish the Minister will on Friday but he must have not only a menu of fiscal reform but also of recovery in employment and innovation in particular. The Minister needs to explain to Irish people what exactly was Commissioner Rehn speaking about.

Was he talking about the fact that he is proposing to add the €8.3 billion that the Minister gave to Anglo Irish Bank - it is a useless black hole on St. Stephen's Green, although I hear it is moving to the Burlington Road or a more salubrious address where it will be free from demonstrators and the prying eyes of the public - just before Easter and which will be added to our deficit? He gave €2.6 billion to the other worthless institution, Irish Nationwide.

Is the Minister telling me that one of the implications of what Commissioner Rehn said was that €11 billion will be added to our deficit for 2010? If that is what will happen the markets will definitely look askance at that. On the list of the euro countries produced by the Financial Times Greece's deficit for last year is 13.6%, Spain's is 11.2% and Ireland's is 14.3% because of the €4 billion the Minister put into Anglo Irish Bank in 2009.

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