Stephen Donnelly (Wicklow, Independent) | Oireachtas source

I often hear expressed in the so-called creditor countries the common view that Ireland mismanaged its internal affairs, made mistakes and is now looking for other people's hard earned money to correct those mistakes. A mixture of economic and moral sentiment is expressed. During a recent conversation I had with a German economist he pointed out to me that the German translation of "debt" is the same as that for "guilt", which I found interesting.

There is no doubt but that mistakes have been made in this country. We have made mistakes and are working to correct them. However, the interpretation that Ireland is looking for aid is incorrect and is damaging to the solidarity of Europe and Ireland's ability, as a modern, developed society and economy, to help Europe get out of the current crisis. The following tells an interesting story. Ireland will borrow €67 billion from the troika. To date, Ireland has poured €64 billion into failed banks, which, in my opinion, should never have been given a penny. This €64 billion is the equivalent of the German people being asked to put one trillion dollars into a failed banking system. When, during a recent interview for a documentary exploring this issue, I put this to a German journalist his response was, "There would be revolution". This is what Ireland has done thus far. It is likely we will do more. The banks have, in return, given this money to bondholders. This numbers in this regard are, again, very interesting. Some €124 billion of senior debt was held by the banks when the State guaranteed it. In Greece, there was a 50% write down for senior bondholders. President Schulz is a business man, having run a bookshop for many years. He knows that when a bankrupt company is taken over the new owner meets with the company's creditors and debts are written down. This is standard practice.

What one gets when one knits the three aforementioned figures together is interesting: €67 million is being borrowed from the troika, virtually all of which is going into the banks and almost the same amount is being given by the banks to the senior bondholders in terms of forgone losses. This is what has happened: there has been a €67 billion circle of money from the troika through Ireland to the international banks and investors. I have spoken to many people about this and have, as I am sure have President Schulz and other Members of this House, read many opinions on it. I have yet to read an opinion which says that this was morally or economically correct. Yet, it continues to happen.

On Monday, we paid another €1 billion to senior bondholders of a bank which would have gone bankrupt.

The Government is paying it but it does not want to do so. The reason it is paying it is because it is afraid of what the European Central Bank and the European Commission would do to Ireland in retaliation for not covering the losses of professional investors. I have heard Mr. Schulz agree this is not sensible. The counterargument goes that the €64 billion came in and saved the Irish banking system. As Mr. Schulz knows, half of this money went to a bank which no longer exists and which is under criminal investigation for what it was doing. The other half of the money went to banks which still exist but which are increasing charges and mortgage rates and are, in essence, sucking the rest of the money out of the Irish economy. The money from the troika achieved only one benefit, which was to avoid contagion to the European banking system.

Mr. Schulz recently stated the Irish people need to have some cause for hope for the future. This hope is not in a deal on the €64 billion or in its restructuring, it is in a return of the €64 billion. If this happens we can, as a modern, sophisticated high-tech export-oriented economy, contribute to the recovery of Europe. I thank Mr. Schulz for his support and I hope he will be able to bring this simple message back: Ireland did not get a bailout-----

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