Pádraig Mac Lochlainn (Donegal North East, Sinn Fein)

The Nyberg report published yesterday places the blame for Ireland's financial crisis squarely in the hands of Ireland's troika of incompetence, that is, the Central Bank, the Financial Regulator and the Department of Finance. Regulation was weak, banks were greedy, profit was king, the media were complicit and so on. While the Nyberg report places blame on the Irish players for the economic catastrophe, one glaring omission as a result of the limited terms of reference is an acknowledgement of the central role played by the IMF, the ECB and some of our stronger European partners in getting us into this sorry state. The ECB and French and German banks, in particular, were only too willing to funnel endless streams of cheap money into the Irish banks which are now insolvent. Is it not ironic that these are the same countries that seek the amendment of our corporation tax rates? The funds of those European bondholders are now guaranteed by Irish taxpayers who must pay for the sins both of our reckless bankers and those of the ECB and European bankers.

I refer to an interesting statistic, albeit dreadful for Ireland, pertaining to German and French banks. Although such banks hold €10 billion of Ireland's sovereign debt, they hold €74.5 billion of Irish bank debt. If one joins up the dots, this tells one that those vested interests, namely, the German and French states in defence of their banks, are determined to bail out the banks to save their own bacon. Consequently, this is not a bailout for the Irish people. It is as much a bailout for the European banking system as it is for us and for German and French banks, in particular. This is a European problem and reflects a structural imbalance between the core and the periphery. A total of 1.8 million Irish taxpayers simply cannot afford to pay the creditors of private European banks which lent recklessly to Irish banks, thereby accumulating more than €150 billion in debt.

An important point to note is that the Government has done nothing to stop the false narrative that is developing and spreading like wildfire across Europe to the effect that Ireland alone is responsible for its economic breakdown and crisis. It was interesting to observe the recent Finnish general election in which a party made gains based on a belief the Finnish people were contributing towards bailouts that only benefited other countries. This is part of the myth and the Government must make it clear this is a bigger issue which pertains as much to a European as to an Irish failure of the banking systems.

I now turn to the other troika of incompetence, namely, the European Central Bank, the IMF and some of our stronger European partners. The ECB, the European Union and international money markets must be exposed for their share in creating the crisis. The report examines the Irish Financial Regulator and Irish Central Bank but what about the European regulators and the European Central Bank? One of Mr. Nyberg's key conclusions or reasons for the bubble is the flood of cheap funding from the wholesale money markets given carte blanche by the European Central Bank and other institutions such as the IMF. Elite policy makers across the European Union are responsible for the eurozone debt crisis and it is long past time for the Government to acquire some backbone and spell this out to its European counterparts. The IMF and the ECB are demanding that Irish citizens bear the burden of the mistakes made by international financiers. The policy of socialising the losses of European banks remains, while the gains can continue to be privatised by many of these same banks, investors and bondholders across Europe. The European political project has failed to acknowledge any hand, act or part in the Irish debacle. Those involved prefer to wash their hands, turn their backs and walk away while leaving the Irish taxpayer to be crucified.

Let us be clear about what was being done to people across the State. Pages 5 and 6 of the Regling and Watson report on macroeconomic developments in the State which was published last June stated when referring to the IMF's analysis of the Irish financial sector and system: "Equally, the IMF was not strongly or consistently critical of the underlying dynamics of fiscal policy". It also stated: "The IMF's major Financial System Stability Assessment of 2006 did not sound the alarm, and there is no evidence that its private warnings did so either". The said IMF 2006 assessment which Messrs Regling and Watson are condemning claimed that the Irish financial sector had continued to perform well since its participation in the financial sector assessment programme, FSAP, in 2000 and that financial soundness and market indicators were generally strong. This was the international culture at the time. It even went on to state the outlook for the financial system was positive and that good progress had been achieved in strengthening the regulatory and supervisory framework in line with the recommendations of the 2000 FSAP. As the Nyberg report spells out, "International organisations (IMF, EU, and OECD) were, at most, modestly critical and often complimentary regarding Irish developments and institutions. This gave the authorities and the banks additional reason to assume that all really was well". Clearly, the role of the International Monetary Fund and particularly the ECB needs further examination. While the Government, the Central Bank and the Financial Regulator were blind and indifferent to what was going on, the ECB and the IMF which are supposed to monitor European and world economies and ensure financial stability did not see any cause for alarm.

I am sure that, like every Deputy, I was researching reports and reading some stories on-line last night. I read something written by Mr. Nick Leeson, the man who brought down Barings Bank many years ago, on TheJournal.ie. He wrote about his experiences and how everything was fine and he was ignored when he was delivering profits until he eventually brought down the bank. He commented on what lessons had since been learned in the international financial sector. These questions must be asked. Likewise, is the IMF as reliable and credible as we are led to believe?

What changes are under way within both organisations to prevent this problem recurring? Can their reports and analyses be taken seriously? If the euro collapses, as some commentators claim is now possible - I hope they are wrong - what credence does the ECB have? How is it any different from the regulators, central banks and governments which failed to predict and prevent this crisis?

During Private Members' business last night on the motion on oil and gas fiscal licensing terms the Minister for Communications, Energy and Natural Resources, Deputy Pat Rabbitte, stated:

The 2007 tax terms do not apply to the Corrib gas field, as they do not apply to exploration licences granted prior to 2007. To do so would have been to introduce what would, in effect, have been a retrospective form of taxation and such an action would not have been in Ireland's interest.

I hope these comments will not be characteristic of the Government's approach to what clearly are injustices. If something is wrong, it should be righted no matter what it is. I wonder what the Minister meant by "would not have been in Ireland's interest."

Significant responsibility and blame lie with those controlling the purse strings and delivering financial advice at EU and IMF level, those who promoted the very deregulation and liberalisation of the domestic and international financial regimes that created the crash and those politicians and figures who introduced waves of tax incentives for people to invest in financial speculation rather than the real economy.

I put it to the Government that all three reports to date - the Regling and Watson, Honohan and Nyberg reports - have referred to the international dimension of negligence. On that point, will the Tánaiste who is undertaking a diplomatic initiative extend the remit of his European diplomatic mission with a new objective, namely, to communicate this crucial point to the Independent Evaluation Office, established in 2001 as an internal watchdog for the IMF, and also appeal to the 186 other member governments of the IMF to review its complete failure in operating successfully in the case of the State? The Government's members are now Ministers. They are in charge of the country's future. They should give young people a reason to stay and fight for their futures.

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