Micheál Martin (Cork South Central, Fianna Fail)

Greek default will be a serious event for Greece and we should not pretend otherwise. The sovereign default in Greece will have a very serious impact on Greece's economy and society for a decade but the issue is that because of Greek default there will be a major pan-European recapitalisation of banks. The argument against burning bank bond holders, therefore, is no longer valid. That is the net point.

As I said in my contribution, the previous Government had no choice in terms of acting unilaterally. It made it clear it could not act unilaterally because the argument was that we would create contagion, the risk of default elsewhere and a collapse of the eurozone but that is no longer the case. A new situation is emerging in terms of the summit on Sunday that will take place today and the resolution that will come about. In essence, if Greece defaults and takes a haircut of 50% or 60%, which is probably a more realistic figure, many mainland European banks will be exposed and there will have to be recapitalisation, and that is where we should be negotiating and making it clear that our position in terms of bank bond holders should change. We played our part last year by not taking unilateral action. The pan-European approach to bank capital will now be agreed. We have a right to demand freedom of action and I ask the Minister of State if we have put that on the agenda. Yes or no? Have we asked for our bank debt to be restructured and for the bank bond holders to be burned? Have we put that on the table?

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