Paschal Donohoe (Dublin Central, Fine Gael)

Anyone who intends to vote against this Bill or advocates opposition to participation in a mechanism such as this has a duty to answer one simple question: where would they find the €15 billion that is needed this year to fund the difference between what we take in as tax and what we are spending? That is €15 billion that has nothing to do with the cost of recapitalising banks but is needed to fund the public services on which this State depends, particularly for those vulnerable citizens mentioned by Deputy Twomey in his contribution. Anyone who is against our participation in a mechanism such as this must answer that one simple question, which this Government is capable of answering. Where would they find the €15 billion for this year, for next year and for the year after that? That is the crux of the challenge this State is facing. We cannot borrow from anyone else in the world at a rate we can afford, so we are dealing with the lender of last resort. If people are advocating that the State does not deal with the lender of last resort, they must explain who will lend that money to us at a rate we can afford.

The political reality facing leaders throughout Europe is that while citizens who are inside bailout plans or external aid programmes do not want to be in them, an increasing number of people do not want to pay for them. This issue is now being raised in countries such as Germany, Finland, Holland and Austria which are asking why they should fund programmes like this one while, at the very time, people participating in the mechanism are saying, understandably, given the cost involved and the social difficulty arising, they do not want to be part of it. Major tension is developing around that point which will lead to some of the challenges referred to by Deputy Twomey. The key point is that while the politics of being inside a bailout plan or external aid programme are terrible the economics of dealing with a default are far worse.

In his contribution Deputy Smith alluded, as was fair, to the delay in coming up with plans to deal with all of this, and the fact that within a day of any strategy being announced, criticism is levied by the financial markets. Two points must be made about that. First, the sovereign crisis with which people are dealing is one of a kind in Europe. There never has been a situation where a group of countries which have come together to form a monetary union has had to deal with a sovereign debt crisis of a country within that union. People are facing a brand new challenge. The textbook, theory and history that led up to this point are largely redundant when one is dealing with the complications and consequences of being inside a monetary union nobody knows how to get out of, even if they so wished. Second, those who are most vocal about the delay in dealing with the crisis are the people in banks, financial institutions and markets who lent money to countries like Ireland at the same rate with which they were lending to Germany. They certainly do not have a monopoly of wisdom in making those criticisms, making allegations or pointing out issues regarding this deal.

This State is now accessing funding at a rate that is cheaper than that given to most of the countries which are funding this plan. This will create tension and raise questions regarding the feasibility of such plans in the future. That is why we must use this plan in the way it is being tackled at present, namely, as a breathing space or buffer zone which provides insulation for us to get our house in order so that we may be able to chart our way again in the future as a sovereign State.

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