Dáil debates

Thursday, 5 May 2011

EU-IMF Programme: Statements (Resumed)

 

12:00 pm

Photo of Catherine MurphyCatherine Murphy (Kildare North, Independent)

The word "bailout" has been bothering me for some time so I looked up the meaning of the term. The EU-IMF deal does not refer to a bailout. In economic terms, a bailout is an act of loaning or giving capital to an entity in danger of failing, in an attempt to save it from bankruptcy, insolvency or total ruin, or to allow a failing entity to fail gracefully without spreading contagion. I am not sure what we got but what we got practically guarantees we will fail. There is very little prospect of doing so gracefully. How can a country with almost 500,000 people unemployed and 1,000 of the brightest and best leaving every week pay a debt of the magnitude of the debt we face? How can we do this when our so-called friends and partners impose an interest rate of 6% at the same time as they insist we take billions out of our economy, which means there is no prospect of reinflating the same economy? The answer is that this cannot be done. Does anyone believe it can be done? I wonder whether the Government believes it can be done.

At the time, the Labour Party was forceful about the situation facing Anglo Irish Bank. It was a private entity and there was no obligation on the taxpayers of this country to put tens of billions of euro into the bank to save it. What exactly were we saving it from? Many of us sought to burn the bond holders and I do not mind what people call this. It was not a sovereign debt, it was a bank debt. What did it have to do with sovereign debt? Who will pay the nurses, teachers and pensions in 2013? After 2013, burden sharing will be imposed and it will be a requirement. This will only take place after we have paid back the German, French and British bondholders. We will have burned our bridges by that stage. The ECB is the foremost authority on, and has ultimate responsibility for, the euro zone. We are members of the euro zone. It was not screaming from the rooftops about our AAA-rated banks before the collapse. A single A rating is how the ECB defines the rating that underpins high credit standards. Indeed, many of the ECB papers produced prior to 2008 used international rating agencies such as Standard & Poor's and Moody's, which are hugely discredited and which attached the AAA rating to the Irish banks. This includes Anglo Irish Bank before the collapse. The ECB were experts then and they are the experts now. They told our then Minister for Finance not to allow Anglo Irish Bank or other Irish banks to fail. Did the Minister know that saving the bank would be the exclusive responsibility of the Irish taxpayers? If one is told that the banks cannot be allowed to fail and that they are not sovereign entities, the instruction brings with it an obligation to have some burden sharing at the very least.

Over recent years there has been talk of a two-speed Europe. People can look around and see countries such as Portugal and Greece in the same boat as ourselves and Spain, where unemployment is above 20%. Like us, they are on the slow train to nowhere. We have a two-speed Europe in the making. The ECB interest rate policy was partly responsible for inflating the property bubble. Now, when peripheral countries need a lower interest rate, the ECB imposes the very opposite. Europe is unravelling at the edges. It is like picking away at a garment. The whole thing will come apart unless there is a comprehensive solution. I do not want to see good countries like Spain having to seek EU, IMF and ECB support or bailout before a comprehensive solution is provided at European level. It seems obvious that the European Council meetings are dominated by a monetary crisis.

The success of the euro is far from certain at this stage. It is obvious that it lacks a political dimension. How many Europeans would like to have more rather than less Europe at this stage? Next week, we will debate a jobs initiative. In addition to cutting out waste, growth and employment were advanced as the ways we would improve our fiscal situation. Some €2 billion was to be put into a strategic investment bank. Now we will have a jobs strategy that will be finance neutral. How many jobs will it create? I hope it will create jobs but I have my doubts when we do not have the other side, the strategic investment bank. It is difficult to see how it would produce the numbers we need if democracy is to mean anything. What is said at elections must mean something. The citizens have had their revenge on Fianna Fáil, rightly so, but we are seeing a continuation of the policies for which they were punished.

Next week we will have a debate on Europe. Monday is Europe day. We look forward to it but in the coming years we will commemorate the awful events of the Great War. The Menin Gate lists the names of more than 50,000 men killed and buried without graves. This was hardly constructed before the Second World War had started. People were still mourning those who were killed and it was still in living memory when the Second World War started. A. J. Cummings, an infantry man, wrote of the horror in the following words:

Every yard of that featureless slab of landscape held the menace of death. If you were not there, the war films would have told you what it was like. If you were there, the war films would have made you laugh. For those few miles of ground, north and south of the terrible road that runs from Ypres to Menin, bear lasting witness to the indestructible tendency of the human spirit. After the nightmare of Passchendaele there is no conceivable cataclysm of war or nature which civilised man might not endure.

The basis of the European Union grew out of those conflicts, yet what we are seeing is a retrenching back to narrow national interests and a movement away from a single Europe. We must see what is occurring in the peripheral regions of Europe as a threat to the European Union. The European Union has led to European stability. We must recognise that the countries on the periphery of Europe are in serious trouble. We should look beyond ourselves and ask what would happen if one or more of those countries fail. Will we go from one bailout to another? Will we continue to have European Council meetings dominated by crisis after crisis? Will we see those countries impoverished? I campaigned actively against both the Single European Act and the Maastricht treaty. They were sold on the basis of Structural Funds and I do not believe the substance of those treaties was properly debated.

We must recognise that Europe, not just Ireland, is at a crossroads. It is in our interests and in the interests of Europe to look at the big picture and find political solutions because I cannot see where they are coming from, and I do not see where the leadership is coming from in Europe. This is not just about Ireland. This is not just about the bailout.

Comments

No comments

Log in or join to post a public comment.