Pearse Doherty (Donegal South West, Sinn Fein)

As outlined by Deputy Adams, the Minister's approach to the eurozone crisis, and that of his EU counterparts, is clearly failing on many levels. While the Minister has argued and will argue otherwise, on his watch Ireland has been demoted to junk status. On his watch, thousands more people have become unemployed. On his watch, tens of thousands of young people have left this State, and on his watch, domestic demand has fallen by 3.6%. On his watch, our Exchequer deficit has increased by €7 billion as a result of him pumping our money into the banks. On his watch, he has bailed out unguaranteed bondholders and he intends to do so again, with an unguaranteed, unsecured bondholder in Anglo Irish Bank due to receive €704 million. This is happening at a time when the Minister tells us that he has no wriggle room, at a time when funding for special needs assistants and benefits to pensions, carers and those with disabilities have been cut or withdrawn.

It is time for a new approach. What should that new approach be? For Sinn Féin, a number of key steps must be taken at European and domestic level if we are to have any hope of delivering a fair and sustainable social and economic recovery. It must also be stressed that the measure of success of any proposed solution to the eurozone crisis must be its impact on ordinary people. Will it get people off the dole and back to work? Will it help reduce household debt and mortgage distress? Will it put money back in the pockets of the working poor and in turn back into the domestic economy? Will it help hard pressed families meet the cost of education for their children and health care for their elderly parents? These are the indicators that matter, not arbitrary deficit reduction targets or ideologically motivated EU and IMF policy prescriptions. Sinn Féin believes that the first step in addressing the crisis in the eurozone is to deal with the banks. The European Banking Authority's stress tests of July this year identified 24 banks in need of recapitalisation. At the time, some commentators said that this was only the tip of the iceberg. Others criticised the stress tests for failing to uncover the full extent of the banks' liabilities, including those hidden away in special purpose vehicles.

On the basis of the most recent round of crisis meetings in Brussels and Frankfurt, it is clear that the critics of the European Banking Authority were right. The extent of the black hole at the heart of European banking is not yet clear. The solution is not, as some European leaders suggest, to pour more taxpayers' money into these toxic banks, nor is it to increase the fund of the EFSF to cope with the funding needs of the banks. What is needed first and foremost is a new round of stress tests that uncover fully, and without any ambiguity, the full extent of the problems in the European banks. Rigorous and compulsory stress tests are now required as a matter of urgency. Once we know the full extent of the problem, the banks must be forced to write down the cost of their bad debts as a prerequisite to any recapitalisation. It is also Sinn Féin's view that the cost of bank recapitalisation should not be born by ordinary taxpayers, particularly given the crippling levels of austerity being imposed on people across the EU.

Sinn Féin has long argued for a significant write down in the toxic banking debt imposed on the State by Fianna Fáil and now by this Fine Gael-Labour Government. Negotiating such a write down, including the Anglo Irish Bank promissory note - which I will state again is not €47 billion, but over €74 billion because we must borrow the money to pay for it - must be a priority for the Government in any talks on a long term solution to the eurozone crisis.

If the Greek Government has managed to secure significant private sector participation in its debt restructuring, then it is not credible for the Minister for Finance here to claim that a similar deal cannot be secured for Ireland. It is simply unpatriotic for him to come back from Brussels with additional private sector involvement for Greece, while asking the people of Ireland to bear the brunt of the toxic debt in the recapitalisation and the toxic Anglo Irish Bank promissory note. We do not believe that an enlarged EFSF is the right vehicle for meeting the funding requirements of cleansed banks. Rather the European Central Bank must become the lender of last resort for the European banking system. The ECB is already performing this function in a number of countries, including Ireland. Rather than printing euros to buy the bonds of indebted European economies in a vain attempt reassure market anxieties, the ECB would be better placed to redirect these facilities to stabilise the European banking system.

The EU must abandon its fixation with austerity. The crisis facing the domestic economies across the EU is a crisis of under investment. The banking crisis has led to a withdrawal of private sector investment from the domestic economy of an unprecedented scale. The result is a loss of jobs for many and a loss of spending power for more. Each round of Government imposed austerity further reduces investment in the domestic economy, forcing more people out of work. This vicious cycle of under investment, unemployment and declining consumer demand is crippling real people in real economies. In the absence of private sector investment, we need the State to fill the investment vacuum. We need a Europe-wide stimulus programme to compliment stimulus programmes in individual member states.

The European Investment Bank, a body with twice the lending capacity of the World Bank, must be empowered to work in conjunction with national governments to increase the level of investment in labour intensive projects which, in addition to creating jobs, also have a clear social, economic and environmental dividend.

The three steps of cleansing the banks of their toxic debts, using the ECB to stabilise the cleansed banks, and increasing investment in job creation at a domestic and European level provide a coherent alternative to the failed policies of bank bailouts and crippling austerity being pursued by this Fine Gael and Labour Government, and which were pursued by the previous Fianna Fáil and Green Party Government. It is also the policy being pursued by the European Council and the Commission.

It is time to abandon the policies of bank bailouts and austerity. It is time to adopt new policies to cleanse our banking system and stimulate our economies. The parent or young person languishing on the dole queue cannot wait any longer. The family struggling with rising prices and increasing debts cannot wait any longer. The grandparent lying on a trolley waiting for surgery cannot wait any longer. We need solutions that work for ordinary people of this State and other states right across Europe. We need solutions that work for citizens, not for A. J. Chopra or Olli Rehn. We need solutions that work for the domestic economy, and we should not prioritise the international markets time and time again.

The Minister comes in here and tells the best tale he can, but in reality he is playing with matches in a petrol station. There is a serious crisis, and as one of the European leaders at the Ecofin meeting, he is twiddling his thumbs while Italy is downgraded and Greece is carrying a debt which everyone in this Chamber knows they cannot pay back, even though the Minister and his Ecofin partners continue to say that there will be no default.

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