Eamon Gilmore (Dún Laoghaire, Labour)

This is the first time the EFSM is being used, but it is not the first time money has been made available to members of the European Union through various EU mechanisms. The EFSM operates under Article 122 of the European Union treaties, which provides that the EU can assist a country "in a spirit of solidarity" where that country is facing exceptional financial difficulties. When money was loaned to other countries under that provision of the EU treaties - and I have referred to the situations in Latvia, Hungary and Romania - the additional margin was not applied. Those countries were not charged an additional 3% on the money lent. Ireland is the first country being charged a penalty rate of interest.

Why are we being charged this additional rate of interest? Yes, we are in a position of going to the lenders of last resort in order to get money to finance the State. We understand that. We also understand the context in which that deal was struck. There is not just an Irish problem. There is also a European and a euro problem. When the Government sat down to negotiate the deal with the European Union institutions, the arrangement it made was to provide financial assistance to Ireland, but it was also designed to support the euro and provide financial stability within the European system. Why did the Government agree to being charged a penalty rate of interest that will cost the Irish taxpayers almost €5,000 million over the period of repayment when such a penalty has never been applied to a European country borrowing through the mechanisms provided for by Article 122 of the EU treaties?

See this speech in context