Dáil debates

Thursday, 18 November 2010

12:00 pm

Photo of Arthur MorganArthur Morgan (Louth, Sinn Fein)

Once the bailout is reduced, Ireland would not need to EU or IMF intervention. It could go back to the international bond markets to continue funding the country. However, this time it would have a set of finance books that are honest, transparent, stabilised and with a proper working plan. The sovereign bond markets are punishing Ireland and why would they not when bond rates are in excess of 9% in recent weeks and while the current policy of protecting all bank bondholders is in place? These markets want to see a Government and a country that is not bound by its banking fates and fortune but is interested in securing the real economy and stabilising the banking sector where necessary in order to secure the real economy.

Our pre-budget submission shows how the Government's structural deficit can be dealt with over a period of six years. Behind the scenes everyone is admitting it cannot be done in four years. If the Government wants to continue playing that bluff, so be it. The cat is well and truly out of the bag on that front. If we had honest figures arising from a more straightforward banking resolution, we could produce a multi-annual plan that took those additional costs into account. The Government's approach to both the structural deficit and the banking crisis is what is causing the problem.

I have explained the reasons the banking approach is wrong but, similarly, the structural deficit reduction plan of cutting €15 billion over four years is wrong and is making the markets nervous. The markets do not believe it will work because history and international experience shows one cannot cut to deficit reduction. If anything, it expands the deficit, as has been the case in Ireland over the each of past three years. We do not have to look internationally for examples. If cutting worked, the problem would be solved by now. International finance markets want to see a plan that looks like it will work, not just the intensification of a policy that has failed to date and involved cutting faster and deeper with each successive budget. The public may feel that, given the option of a Fianna Fáil or a Fine Gael and Labour Party bailout, the IMF and the EU looks like a better option. It is important to point out that the bailout would just be for the benefit of the banks, not in the public interest but the taxpayer and members of society would end up paying back all the money for the bank bailout. No matter how Fianna Fáil tries to spin it, the IMF coming to run our economy is the most shameful route for any country to take. It is shameful because the history of the IMF is that it robs a country of economic sovereignty, imposes horrendous terms and conditions on its loans and is a reflection of a complete failure of Government and administration in the economy. That is how it will be seen. We want to see the Government's four-year plan, we want the Government to postpone the budget scheduled for 7 December and we want an immediate general election. A new Government can pick up the pieces very quickly early in the new year. That will give some level of stability to the international markets and some level of stability to our economy. More importantly, hopefully it will provide moral and political leadership to the people of the State because they need it now more than ever, following 13 years of atrocious governance under Fianna Fáil-led Governments.

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