Éamon Ó Cuív (Galway West, Fianna Fail) | Oireachtas source

I am delighted to have an opportunity to contribute on this subject. I am a little concerned about the proposal in the Bill, which will mean the Government will not have to come back to the Oireachtas regarding similar adjustments in the future because it appears the Government parties are trying to hide the fact that time and again the Greeks have negotiated better terms for themselves and they have signally failed to get any significant change in the terms for Ireland to date. The legislation provides for a reduction in the interest rate on, and an increase in the duration of, Greece's loans. When money is borrowed, the interest rate is paramount. If a householder borrowed €100,000 at an interest rate of 0% to be repaid over 300 years, it would not be much of a burden. However, if it attracted a 10% interest rate over ten years, he or she would have a significant current burden. When money is borrowed, the term of the loan and the interest rate are important. Greece is having its interest rate reduced from 1.5% to 0.5% above the ECB rate, which is low. The margin was greater at the beginning than the base borrowing level. The loan term will be extended from 15 to 30 years. The double positive effect reflects one hell of a negotiation by the Greeks.

We are told all the time by the Government that if one is the good guy, one will get all the breaks. The evidence is that the Greeks, who we are always told in this country are the bad guys, are managing, despite that, to do a hell of lot better than we are in the hard stakes of negotiation and have secured many more concessions than us. It is funny how willing the Government parties are to piggyback on the Greeks because the famous interest rate reduction they secured in their first year in office, which they have kept on about, was an automatic consequence of an interest rate reduction for the Greeks. The Greeks negotiated for us and the addendum was if it was good for one, it was good for all and, therefore, the Government parties' boast is hollow because they did not negotiate the reduction. Their stance of never standing firm and saying something has to happen like the Greeks have done before taking their negotiations to the edge of the cliff and their unwillingness to engage in a tough manner has been an abject failure.

Let us be honest about this. We keep hearing reports of all sorts of extraordinary things happening, with little commentary from the media and little analysis of how hollow are the Government's promises. There was great talk about the extension of the maturity and interest rate of the EFSF loans but there is nothing new in this. Paragraph 10 of the Eurogroup statement of July 2011 following the extension of Greece's loans and the lowering of the interest rate on them outlined a commitment to lower Ireland's interest rate as follows:

We are determined to continue to provide support to countries under programmes until they regain market access provided they successfully implement these programmes. We welcome Ireland and Portugal's resolve to strictly implement their programmes and reiterate our strong commitment to the success of these programmes. The EFSF lending rates and maturity agreed upon for Greece will also be applied to Ireland and to Portugal.

In the meantime, we have continually been subject to big announcements about measures that were previously agreed, which are written into agreements, as the Government piggybacks on hard negotiations by the Greeks.

Last night, there was an announcement about the extension of the maturity of the EU-IMF loans. If that happens, I will welcome it. The Government parties have said all the time that they will exit the EU-IMF programme at the end of this year. They will and they will not, as they say. We should analyse that a little further. It is true that we will not receive more money under the programme unless we seek it but we will still owe money to the EU and IMF, which, hopefully, will be repaid over a longer period. Is the Minister of State saying the EU-IMF, having put in so much money, will stand back and say we can do what we want, there will be no more correcting of homework and they will have no more interest in our fiscal or other policies because they are not giving us more money despite the fact that we still owe them a significant amount? This is fallacy No. 1. On a technical level, Ireland will leave the programme but since we owe them a significant amount, they will still be interested in visiting Merrion Street to make sure their money is safe.

The second issue is we got the money at a good rate compared to the market rate at the time but it is not necessarily a good rate if the country has a good rating on the markets. This is about rolling over loans and as they fall due, if we have a good rating on the markets and they believe we have our problems sorted and have a sustainable debt, they will give us money cheaper than the EU-IMF but the Government parties know they are not ready for the markets unless they get external support and the reality is the EU-IMF money will be the cheapest available if they can hold on to it. All the boasts, therefore, about being market ready at competitive rates are given the lie to by the Government's own actions.

I am also interested in another feature of the deal announced on 29 June 2012, which appears to be unravelling. I do not know whether the Minister of State reads the Financial Times but, on 14 January, it stated: "The plan, circulated last year among eurozone finance ministry officials, would force struggling countries either to invest in failing banks alongside the rescue fund, the European Stability Mechanism, or guarantee the ESM against any losses." I am surprised, if this is incorrect, that the Government did not ask the newspaper to correct this and perhaps the Minister of State will clarify this. This proposal was made by the European Commission. During discussions, proposals such as this tend to be watered down rather than beefed up. In other words, we have to see whether countries will have to take the first losses.

The Minister seems to be trying to suggest that this was what was agreed all along and that the sovereign entity would have to carry some form of burden in any bailout by the ESM. This would mean that any initial losses would be to the account of the State. If this is what was agreed on 29 June, the Government kept it very quiet.

I want to move on to another crucial subject which, again to my surprise, has not caused much commentary. The Government might fail in many ways but, despite Deputy Rabbitte's worries, it seems to have the media in a state of amnesia.

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