Arthur Morgan (Louth, Sinn Fein)

At the outset, I am half afraid to speak in critical terms of this proposal from the Government lest I incur the wrath of the Minister for Finance and his colleagues in Cabinet, although perhaps such fear is unnecessary because they were a complete roll-over for the IMF-ECB group of negotiators. I should have no concern, really.

Why is the Government pursuing this crazy loan bailout business at all, when it must know we simply cannot afford to repay it? We simply do not have the economic base in the State to be able to create the type of revenue necessary to repay this loan. Surely that is a fact of life, and our negotiators should have gone in with that information, and pressed it home to those with whom they were dealing.

This is really about saving the euro, I believe, as far as the Government and the ECB are concerned. However, from where Sinn Féin is coming it is also about the people of this State who are struggling, some of them in jobs, or unemployed and many more of them to be made unemployed shortly, I am afraid. It is about those people who are being required to pony up for the speculation the bondholders took, mainly in Anglo Irish Bank, but in the other banks as well, at a time when the Minister should know this country simply cannot afford to make those repayments. People currently cannot afford to pay their mortgages which themselves are grossly excessive because of the greed of speculators who in turn were cheered on by the Government and bankers. These people simply cannot afford to repay these loans.

Let us be clear, the cheap and easy credit pouring into this State came in under the nose of the European Central Bank, which, in my view, makes the ECB at least as culpable as the lack of regulation in this State. The Sinn Féin delegation told this to the ECB, IMF and Commission representatives when they met with them last week. They had no answer for us because they were at least as culpable for this mess as was the political misdirection of this State and our lack of proper regulation in this area.

Copies of the memorandum of understanding have just been circulated. It is difficult at a couple of minute's notice to give a substantial response to it. However, we already know some of what is contained therein. The Minister is going after easy pickings, namely, the minimum wage and VAT. Two years ago, the Minister for Finance increased the VAT rate by 0.5%, which resulted in businesses, in the retail sector in particular, within a 40 mile radius south of the Border being almost wiped out. The Minister now proposes to increase VAT by 2% during the course of the four year plan.

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