Derek Nolan (Galway West, Labour)

I congratulate the Leas-Cheann Comhairle on his appointment. It is a great honour for him. I am glad he is not in my constituency but at a safe remove in the next one.

I am pleased that the rostering seems to be scheduling to me to speak after Deputy McDonald on every occasion. In referring to the banking restructuring plan as outlined by the Government last week she again stated that it was the Government's proposal that €24 billion of taxpayers' money be put into the banking system. That is not the case. What happened last week was that it was indicated how much capital was required by the existing system. The external experts who have examined it have concluded that €24 billion is required, in an adverse scenario, in order to bring certainty and stability to the banking institutions and generate investor confidence. The Government has committed to burden sharing within that figure of €24 billion, that other sources of income from the sale of assets will be sought and that there are ongoing negotiations with the European Union on these issues.

It is necessary in this debate to go back to the introduction of the blanket bank guarantee which was supported by every party in this House at the time, with the exception of the Labour Party. As has been stated, this bound the State's finances at the hip to those of the banks and has left us in a position in which Ireland's sovereign debt is linked to private debt and developers' gambling debts. All Members are familiar with what the country is stuck. However, when the State signed the EU-IMF deal last November or December, it placed a straitjacket on the actions open to future Governments and future Members of this Parliament. The deal not only was signed by a sovereign government, but was ratified by a sovereign parliament in a subsequent Dáil vote, which means that we have entered into a legally binding contract. Unfortunately for Ireland, at that time it was unable to fund itself otherwise. Ireland no longer has credibility in the international markets as people do not believe that we can repay and, consequently, our only source of income is from the EU and IMF.

This motion seeks a referendum on the deal and while it is not for me to dictate the wording used, I would have preferred reference to points of improvement or change or on negotiating positions, rather than simply to a referendum request, which gives rise to a number of issues. First, a referendum would give rise to questions on whether it would be legally binding and were we to so do, whether we could be dragged through the international and European courts for reneging on a deal to which we have signed up in good faith and from which we are benefiting and receiving funds. As to whether it would be possible to breach the deal on foot of the Parliament and the Government having signed up to it, I am unsure whether a subsequent referendum would have the legal standing to stand up to such a challenge.

Another point reverts to the role of the Parliament. Three parties in this Dáil, namely, Fianna Fáil, Fine Gael and Labour, conducted the election on the basis of the EU-IMF deal in one shape or other. In the case of the Labour Party, it was to seek a mandate from the people to renegotiate the deal. I understand the position was similar in the case of the Fine Gael Party and that the Fianna Fáil Party stood over it without any changes. As for referendums, I refer to the previous European referendums and question whether the scope for debate on such matters would be better channelled through the parliamentary process, in which they could be given due consideration and discussion and could go through committees and so on. Alternatively, I question in many respects whether this issue is capable of being debated in the kind of media environment in which we find ourselves, in which snippets and three-minute shots across the airwaves are the manner in which national debates take place. However, that is an issue for another day.

While I do not suggest that the debate in this House over the past two weeks has been wrong, because it is right for this House to debate banking strategy, I believe Members are taking their eyes a little off the other major and important issue that must be discussed, namely, the economy. In many ways, the economy is a very different matter from the banks. Were the deficit we face of €20 billion per year to continue without being addressed over the next four to five years, it would quickly amount to borrowings of €100 billion, which would be a far greater amount than that which thus far has been pledged towards the banking system. This is the subject on which Members must place their real emphasis in the next number of years. The Government has many ambitious plans and I acknowledge that the jobs budget will be introduced within the next month or two to start that ball rolling.

While there certainly is need for renegotiation of the deal, it was evident that this is coming at the conclusion of the last European Council when it was asked and agreed to that the issue for Ireland would be postponed until the end of June. No money has gone into the banks thus far, the amount of capital allocations is also for decision at the end of June and negotiations in the meantime are under way. To put up people's hands or to state we have surrendered, that it is all over and that the current Government is the same as its predecessor before any negotiations have concluded, is both to hamper the Government's negotiating efforts and to portray a fiction and something that is not exactly accurate. I will conclude on that point and again congratulate the Leas-Cheann Comhairle on his new position.

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