Peter Mathews (Dublin South, Fine Gael)

I will start from the point where I hope to finish, that is to say, I will be supporting the European Financial Stability Facility and the Euro Area Loan Facility (Amendment) Bill 2011. However, this debate requires some serious consideration of important aspects, many of which have already been made.

Italy's credit grading has been reduced. Europe's banks and the European economies are on the most fragile ground ever since the European project got under way. The yield on Greek one year bonds - forget about ten year bonds - was at 147% the other day. That means they have been written down by 50%, certainly. That is the mathematical expression, yet the meeting on 21 July looked at a write down of only 21%-22%. Deutsche Bank, which represents about 60% of the entire German economy, with €1.6 trillion on its balance sheet, has leverage of 52 : 1. Crédit Agricole in France has leverage of 74:1. These are just expressions of how fragile is the banking system. When it entered the troika agreement in November 2010, Ireland was stretched to its limit. It remains stretched to its limit, notwithstanding the reliefs of the cups of water in interest rate reductions in recent months. The actual size of the debts in our banking system, together with national debt, are crushing the economy. One of the most important aspects of the Wyoming meeting of central bankers at the end of August looked at the whole question of debt as a proportion of GDP in 18 of the OECD countries. I am currently trying to get the figures that would apply to Ireland if it had been included in that table. Japan led that table and we know that growth in the Japanese economy has been pretty well smothered for the past few years.

This was alluded to by Deputy Doherty and I want to be fair to all the contributors in the House, because the expressions are honest expressions of homework well done and proposals well made. This Parliament, as a member of the eurozone, in passing the Bill before us, can send a very strong caution and message to Europe, which is that the debt burden on the country should be reviewed. There are ways of doing this, such as re-examining the promissory notes in Anglo Irish Bank, which arose as a result of the failure to write down the amounts owing to bondholders.

I would like to remind the larger countries in the eurozone, particularly Germany, as they debate and dither on what kind of firm action is needed, that they should remember the 1953 London Debt Agreement, where large levels of loans were written down, following which the German economy began to grow and recover. That proposal on revisiting the pro-note liability has been put forward by Karl Whelan. I have had conversations with him on that subject going back nearly a year, and I would commend it on the consideration and support of this House.

The crisis is severe and Europe's leaders have not stepped up to their responsibilities. I encourage the Minister for Finance to keep explaining to the people of Europe and to the ECB the provenance of our indebtedness to the ECB. It was a result of us redeeming bondholders in full, when the previous Government did not acknowledge the level of losses in the banks. It behoves us to get that message across and it behoves the Europeans to pay attention to it. They must recognise the truth of the situation and recognise it tangibly.

I want to respond to a couple of points made by Deputy Finian McGrath. We all have to come together to work through this crisis. My country is dear to me. That is why I put my name forward to become a public representative. There are people who should consider their positions, such as very wealthy non-resident and high earning citizens of this country. There is a crisis and they should consider Warren Buffet's suggestion that they can contribute by way of taxation. They can also consider the justification for a special levy for four years on incomes above, say, €200,000 per annum. Just because they live abroad does not mean they do not benefit from their families remaining here. If they have a fire in their homes in Dublin, it is not the Monte Carlo or Swiss fire brigade that will put out that fire. They should remember this.

In every meeting with the European Commission or the ECB, we should remind them that we have justification in persisting to seek a loan write down to relieve the overall burden of debt in this economy, in order that it can be passed and transferred back to businesses and households that need it. We spoke two weeks ago about mortgage debt write down, which was called forgiveness. It is actually about writing down to collectable amounts.

I call on the political leaders of Europe to commit and to cease the words, words and words. There has been an interminable amount of words and a lack of action and commitment. About €75 billion needs to be written down in our banking system. In Portugal, it is about €65 billion. In Greece, it is at least €175-200 billion, and not the €50 billion that was discussed on 21 July. Italy and Spain need write downs equivalent to about €200 billion. If we tot it all up and make a cushion provision, we are approaching €2 trillion. That needs to be done sooner rather than later. A limp along and unsynchronised progression of legislation in the 17 eurozone countries is a dangerous cocktail. We need to keep getting that message across and not detract from it for one moment.

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