Clare Daly (Dublin North, Socialist Party)

I am amazed by the previous speaker who referred to austerity as not being the solution. Naturally, it is not, but it is the only recipe in town for the Government, of which Deputy Spring's party is part. He is not an idle bystander, rather he is part of that process.

It is an absolute scandal that an issue of such seriousness is being discussed in this manner. This matter should be put before the people in a referendum such is the seriousness of the issues raised. Instead we will have a ridiculous referendum on judges' pay which could have been dealt with by simple legislation. Such a vitally important issue as this is not only not being put to a referendum, but the House is not being enabled to amend or change it in any way. As bad as that is and although the Government has allowed that situation to unfold, the fact that the so-called Opposition parties have allowed a situation to occur where they are not even prepared to provide speakers on the matter makes it even worse. They are aided in this by the role of the media which have been remarkably silent on the issue, given the important matters at stake. It is no wonder the Government is getting away with so much in this regard.

Fundamentally, the Bill will have a vital impact on the future economic direction of the country from several aspects, some of which have been dealt with during the course of the discussion. Financially, the Bill will facilitate our voting to provide irrevocably and unconditionally €11 billion in 2013 to be paid into this fund. This sum is almost equal to three years of devastating cutbacks and tax hikes to which the people have been subjected and which are destroying the lives and livelihoods of many. This €11 billion could have been usefully expended on putting people back to work, putting special needs assistants, SNAs, to work, addressing the horrific situation highlighted on "Prime Time" last night, reversing some of the cutbacks in hospitals, repairing the water network and so on. This has hardly been mentioned in the discussion. As we are aware, that figure is simply the beginning.

We are here because of a deal struck last year which had to be amended in June because the pot was not big enough and because of the deteriorating situation. In Greece the level of funds which had to be provided rose from €440 billion to €780 billion. It is timely to remember the fanfare that greeted the deal at the time. We were led to believe that would be it, the crisis would be over and finally the European Union had a handle on the economic problems. However, as everyone is aware, within one week Italy and Spain also ended up in trouble. Until then they had been calculating on the basis of dealing with Ireland, Greece and Portugal which are responsible for only 8% of eurozone debt. Once Spain and Italy were added, it was a question of there being no limits. In this sense, this deal is akin to signing a blank cheque. We have no idea how much funding the State will have to provide. In many ways it is like being asked to shoot oneself and pay for the gun while one is at it.

Deputy Spring seemed to suggest we have great allies in Europe who are doing us a favour in assisting us out of a troubled spot, but what are they doing for us? They are putting up money, much of which we must put up for ourselves, at remarkably high interest rates. Then if we wish to access this money, we must pay over the odds in the borrowing terms and interest rates demanded. Not only that, the price demanded in terms of austerity is worse. This is an absolute recipe for disaster.

We have already to put up with a situation where those in government are constantly bleating about it not being their fault, that it was Fianna Fáil's fault or that it was the fault of the EU-IMF deal and there was nothing they could do about it. If the Bill is passed, they will use the line that it is because of the European Financial Stability Facility and that there is nothing they can do in that regard. We should consider what the Government would propose to unleash should an economy seek access to these funds. Let us consider the detail of what is taking place in Greece: it does not make for pleasant reading. Some 35,000 state jobs are up for the chop immediately, with 100,000 due to be axed by next year. This is against a backdrop of an economy in which industrial production has shrunk by 12%. The Greek Government is imposing a property tax at 50 cent per square metre on people whose wages have already been slashed. To get over the problem of people's inability to pay, it seeks to attach this property tax to their electricity bills. It expects the bill to be paid in two instalments by a people among whom 175,000 householders have already had their electricity supply cut off by the state electricity company because of inability to pay.

The Greek Government, the European Establishment and the Irish Government must get real about what is going on. It is simply not possible to impose that level of austerity. Already in Greece unions have stated they will not impose or implement the new property tax or cut off people who cannot pay their bills. Yesterday we witnessed 30,000 students protesting in Athens over education cuts. It is clear the government there will not get away with it because it is simply another example of making ordinary people pay for a crisis not of their creation. It is another example of trying to impose austerity which in all of history has only resulted in making conditions worse. It has not worked here and it has never worked anywhere else.

Important lessons should be drawn from the debt crisis in Latin America during the 1980s, a time known as the lost decade. That situation was somewhat similar to what the EU hierarchy is attempting to impose. There were brutal austerity measures imposed by the IMF at the time. This caused immense hardship for the peoples of that continent. Wages as a percentage of GDP in Latin America during that decade fell strikingly. Latin America's share of world production was slashed. GDP growth on the continent decreased. The net result was that public debt trebled during that time. Defaults took place between 1982 and 1984 in five countries: Argentina, Brazil, Ecuador, Mexico and Peru twice. The lesson is clear and everyone knows it: austerity does not work or generate economic growth. It makes the situation worse not only for those who are at the receiving end of it, but also for the economy in an overall sense because it cuts across growth. One key lesson from that phase of history which can be generalised and should be taken into account in this and other places is that debts that cannot be repaid will not be repaid.

The scenario that the Government has opened up with the fund will not solve that problem. Writing a blank cheque that no one has the money to guarantee is nothing but a con job. Let us consider the position of the European Union. We have historically low rates of interest. What will happen to the debt if there is some form of recovery and if interest rates begin to rise again, along with inflation? Clearly, that will have an immediate knock-on effect.

This measure represents one of the most serious attacks on our economic development. It is not being done to help us or the peoples of Greece, Italy, Spain or any of the other countries affected. It is being done to bail out the banks and those at the top of society, those who caused the problems in the first place and have benefited from it also. It is clear this approach will not work. It is an horrific indictment on the Government which cannot hide behind the actions of the previous Government. The Government is moving the Bill and it will be its votes that will pass it. It is very regrettable and exposes the shallow nature of the so-called Opposition in this House that they could not even be bothered to debate these issues seriously.

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