Peter Mathews (Dublin South, Fine Gael)

I welcome the opportunity to speak on this Bill. Greece needs the support of all the members of the eurozone. This Bill seeks to support the legislation which will achieve the second Greek bailout. However, we must consider what has happened in the past 18 months. It is as if a storm cloud has gathered over what is normally the sunny parts of Europe and the Mediterranean. As Deputy O'Reilly pointed out, the pain and suffering in Greece is enormous. It is not true, as sometimes has been suggested in low tones, that the Greeks did not face up to their responsibilities. Greek expenditure has been slashed by one third. For every €3 million Greece was spending before the crisis became chronic, it is now only spending €2 million. These cuts are twice as high as the cuts in Ireland, five times higher than the cuts in Portugal, eight times higher than the cuts in Spain and 17 times higher than the cuts in Italy. This is severe and it suggests where the dominant political countries of Europe have been making the formulas for recovery and for rehabilitation. There is a slight ring of the word "reparations" because the Greeks overspent, did not work and indulged. That is not the case.

Helmut Kohl, one of the really outstanding leaders of Europe some years ago, only last Tuesday week pointed out that the so-called evil spirits had not totally gone away. He said that hand wringing and petty politicking should be set aside and that leadership of stature was now required. I agree with that. While we look at fiscal adjustments and fiscal architecture for the years ahead, there is now a huge debt burden that is patently unsustainable across the eurozone, and particularly in Ireland. I have just come from a meeting of the Joint Committee on Finance, Public Expenditure and Reform where statistics showed the increased levels of household debt, non-financial corporate debt and national debt. Our national debt is growing as we have to attend to paying out on foot of the promissory note.

I would like to make one last point. There is a misunderstanding about this promissory note construct. Under the euro system rules, which apply to the ECB and to the central banks under its umbrella, there is a prohibition against lending to any institutions that are deemed to be insolvent or approaching insolvency. In order to redeem the bondholders in the busted banks, namely, Anglo Irish Bank and Irish Nationwide Building Society, and because the loan losses had not been estimated at that stage, there had to be a manufacture or construct of the promissory notes to give the viability of those institutions some substance. However, the lending was provided by our Central Bank and the ECB to those institutions which enabled them to redeem the bonds in full. Therefore, that is where the problem lies and tomorrow we hope the Governor of the Central Bank, Patrick Honohan, will insist yet again that the restructuring of that creditor obligation to the Central Bank of Ireland under the euro system can be written down in order that the promissory notes on the other side can be extinguished rather than restructured. If they are only restructured, the liability still remains.

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