Michael Noonan (Limerick City, Fine Gael)

The Deputy's analysis of the cross-references to the ESM is incorrect. There is nothing in the Bill which ties us to the ESM. The cross-references are included because there is an agreement in the European Union that, as we negotiate, the ESM will replace the EFSF. Separate legislation will have to be introduced to facilitate the establishment of the ESM.

The Deputy engaged in a critique of us and that for which we stand. If any criticism can be made of me, it is that I say too much when I go to the European Union. The position is clear. The country is in a frightful fix. We lost our sovereign control and got into a situation where we have been saddled with an enormous amount of debt. We were not able to raise money in the markets and this left us dependent on the kindness of strangers in order to obtain funds. Those strangers, our colleagues in the European Union, proved to be very kind. They voted us money in their Parliaments and that is what is paying for our health, education and other public services, including those provided by the forces of law and order. It is unfair to refer to big, bad Europeans beating us up and doing harm. If it were not for the Europeans, the economy would have collapsed because we had nowhere to go. Who was going to give us the money we required? We would have been obliged to make a correction of approximately €20 billion in one budget - the Deputy can imagine the devastation to which that would have given rise - in order to try to bring expenditure into line with taxation in one fell swoop over a 12-month period. One can imagine the social impact such a move would have had.

We should appreciate what our European colleagues have done. They have been extremely helpful in this matter. During the recent general election campaign - which brought about a change of government - we stated we would renegotiate the programme. We have commenced doing so, but we are proceeding in phases. The first phase was that when the jobs initiative was announced, we were allowed to restore the minimum wage to its former level. Many other things have been done. The correction period for the programme has been extended by 12 months to 2015 and there has been no second NAMA phase because the banks must deal with assets with values below €20 million. Our European colleagues agreed that we could reduce the rate of VAT applying to the hospitality sector from 13.5% to 9%. This had a significant effect for those involved in the sector during the summer months. We were also allowed to halve employer's PRSI below certain limits.

The second phase of the renegotiation relates to the price of the programme. As I stated on the day it was introduced, the programme was priced incorrectly. We did not require the lessons in moral hazard expressed by the addition of 3% to the cost of the money we received. That was the thinking in the European Union when the programme was introduced. Adequate moral hazard was expressed when members of the electorate went into polling booths during the general election. Our colleagues in Fianna Fáil can attest to this because their party's support decreased by 28%. To date, thank God, people in this country, unlike their counterparts in Athens, have not taken to the streets. In addition, we have not, as has been the case in other European countries, had a general strike here. The effect of what was done in polling booths on this occasion was absolutely devastating. It sent a clear signal right across Europe. I am not seeking to dump on Fianna Fáil; I am simply describing how the electorate exercised moral hazard. We did not need an additional 3% on our interest rate to teach us that we do not like participating in programmes and that we would prefer to exercise our own sovereignty.

The second phase of the renegotiation went well and the interest rate has been reduced dramatically. Matters such as lengthening maturities and entry into the secondary markets to which reference was made have also been dealt with. However, the renegotiation continues. I want to renegotiate further in order that the burden of the debt on Ireland will be lessened. The best device which I can come up with in that regard is investigating the possibility of whether we can exchange the promissory note on Anglo Irish Bank for something that would be more amenable and that would cost us a great deal less. There are ways of doing this and there are many individuals who can design the relevant vehicles required. The crucial part of the negotiations will be trying to convince our European colleagues to agree to what we are seeking. We will keep trying it.

There are other things we can do also and we will do them. I listen to the suggestions made in this House all the time. I find these debates very helpful. I appreciate those who participate in them, as good ideas come from them. There is no monopoly of wisdom about these matters on this side or the other side of the House. Good ideas are being suggested by individuals and we take note of them. If I think they will travel and they will be to the advantage of the country, I will run with them as part of the Irish negotiating position. The Deputy should not think he is wasting his sweetness on the desert air. We are listening to him and taking note of what he is saying.

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