Michael D'Arcy (Wexford, Fine Gael)

One of the things which stuck in my mind about the period in late September 2008 was the Fianna Fáil Deputies and Ministers who asked others to look at what they had done and said they had saved the whole system and that other jurisdictions would copy structures it put in place. We have found out that was incorrect. To follow on from Deputy Rabbitte, in June 2007 when I was elected to the House, the national debt was €35 billion. At the end of this year, according to the NTMA review in July 2010, the expectation is that it will be €95 billion, made up primarily of the collapse in taxation and running a deficit of approximately €20 billion, which would lead the €35 billion to increase to €95 billion.

In that same period the State accepted the liability and converted what was a capitalist liability into national sovereign debt of another €50 billion. On top of that there will be a transfer of loans from Irish banks to NAMA and a significant haircut will be applied to the €81 billion worth of loans. The haircut has been greater than anticipated but it is somewhat relevant because while the amount of the haircut may be reduced the equivalent amount has to be increased capitalisation. That sets the scene. The rating agencies gave no valuation of the assets which is a little unfair. The total sum involved is in the region of €40 billion.

The Irish banks have no liquidity and we have no source of credit. That is the long and the short of it. Not alone have we no source of credit but the European Central Bank has said, "Stop" and wants its money back because it is terrified that 1% of the population which holds 25% of the European Central Bank's emergency liquidity is bordering on being reckless. They are not satisfied that this can be allowed to continue. I could not disagree with it. What do we do about it? There is only one option, namely, to call upon others to help us out in our time of need.

As a first time Deputy in this House, I find there is a most appalling lack of honesty with the people of this country who will end up picking up the tab. Where was the honesty on Sunday and Monday when Minister after Minister said no negotiations were taking place? We then got clarification to the effect that nothing was happening here regarding the national sovereign debt of €95 billion. However, negotiations were taking place on the underwriting of the Irish banks which are, as we know now, mostly owned by the State. We can try and fool the people or we can be honest. There is no honesty any more from the Government side of the House.

Some people may say that the Government did not know about the impending crisis, but it was told. Early in 2009, the economist Peter Bacon told the Government that the size of the banks' debt was approximately €150 billion. He also told the Government that there was no way out of it because that sum of money would be coming down the tracks at some future stage. The Minister for Finance told us that this would be the cheapest bank bailout in the world. Not alone has it not turned out to be cheap, but it has also brought this nation to the brink of bankruptcy. In addition, it has brought the euro currency to the brink, thus setting the scene for other countries to be attacked, in the way that George Soros attacked currencies in the early 1990s.

When Commissioner Rehn visited here last week he said the authorities here do not accept what is happening and that a reality check was needed. When he went back to Europe after saying all the right things that is required of a former finance Minister in a delicate position, he said that the lack of realisation of what is happening cannot be allowed to continue. It is now recognised that in the conditions required for the Irish banks there will be a default on the subordinated bondholders because Irish taxpayers are not capable of paying. How much more can we bleed the taxpayers of this country? Not very much.

The representatives of the European Stabilisation Fund and the IMF are coming here. We have had sacred cows for far too long in our society and in politics. In the 1920s, Ernest Blythe took a shilling off pensioners and Fianna Fáil spent the next 80 years telling everybody that Fine Gael had reduced the old age pension. The IMF and the ESF, however, will not be concerned about those sacred cows. They will slaughter them and will then move on to the next sacred cow. The State finds itself in that position because of what Fianna Fáil did for electoral gain. It sold out and gave money away. The Charlie McCreevy mentality was, "We'll spend it while we have it", but by God we do not have it anymore. Not alone did he spend the current generation's wealth, he also borrowed and mortgaged their children's future.

What do we do now? Are we to slaughter other sacred cows? Do we get rid of AIB and the Bank of Ireland? Will we give them away for nothing, together with their liabilities? For so long we heard about the country's pride in its powerful banks, but they were built on nothing. They were built on a falsity and were allowed to do whatever they wanted by the former Financial Regulator who was not in a position to do anything because he was only a puppet of the State. There was no separation of powers involved.

Last night, I watched the BBC world news reportage of the EcoFin meeting. It was not lost on me when the Dutch Finance Minister said there would be no grey areas in this respect. He said they would not be allowed to pretend that this is only a bank bailout. This is also a sovereign debt bailout. There will be one bailout and they will not be coming back here in two years' time. What will happen will be obligatory and the people in this House will have to get on with it and carry the can.

Fianna Fáil crashed the economy and abandoned our financial and fiscal independence for its own electoral gain. It is ironic, however, that the British Chancellor of the Exchequer says he will pony up funds to underwrite the Irish economy. I do not know if Fianna Fáil Deputies really accept what they have done to this country.

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