Joan Burton (Dublin West, Labour)

People have spoken about Russia after the collapse there, as well as Argentina, as possible models. Members of the House who are interested in economies which have defaulted should realise that it is not in any way a soft option.

The result of a default on the scale some people suggest is that a state's only line of access to credit from the outside world would be through the IMF for a period of at least seven years. In raising the default option, there should be a detailed discussion of what people mean by it. They can mean different things.

However, the Government is determined to continue towards renegotiation, particularly on the interest rate, the structure and the duration of the deal, which is critical; renegotiation that separates bank debt from the fiscal deficit; and renegotiation involving the ECB and the Commission, which provides for the imaginative creation of new structures that assist peripheral countries such as Portugal, Greece, Ireland and other member states whose sovereign debt capacity will be tested by the markets in the future. We need the development of new instruments such as eurobonds, which would enable the peripheral countries to raise additional debt.

We also need new structures to deal with sovereign debt in the context of the complete change in financial markets over the past ten years where globalisation means a 28 year old with an MBA is as likely to make a decision about Ireland's sovereign debt as a senior Minister or Ministry official in capitals around the world, which is the way it used to be. However, this is the global financial market in which we live. We can wish it to be different but we cannot reinvent globalisation and the evolution of the financial market. We can reform them and that is where Ireland's interest lies. That is what the Government will do as well as rebuilding jobs and businesses. That is the mandate we have from the people and when we have finished, this country will be a better place for working people, the unemployed and those who have lost their businesses and want to rebuild them.

See this speech in context