Tom Fleming (Kerry South, Independent) | Oireachtas source

In October 2011, a report on the sustainability of Greek national debt by the EU-IMF-ECB troika made for grim reading. It stated that Greece would need €252 billion in bailout aid by 2021. This was dependent on a 50% haircut on Greece's bondholders, as well as their agreement to enter into a voluntary package in which they would incur such a 50% loss at a minimum. The report also stated that in the long term, in the event of a further economic shock, Greece may need as much as €450 billion by 2027. This is a frightening and appalling vista.

Subsequently, in February 2012, there was a huge relief in respect of Greece's fresh bailout package, which averted the threat of a catastrophic default by Athens although there is constant doubt about this massive bailout and regarding the sustainability of this deal. After the €130 billion deal was concluded, the then Greek Prime Minister, Mr. Papademos, called it an historic day and the European Finance Ministers stated that it provided a comprehensive blueprint for putting Athens's public finances on a sustainable footing. However, in February 2012, David Owen of the American investment bank, Jefferies, stated:

Greece is caught up in a full-blown debt spiral and no one has any certainty over what happens to GDP growth a quarter from now, let alone a decade out. ... More likely than not ... events will blow the country off course.

This statement was reinforced by a confidential document on Greece compiled by European and IMF analysts, which showed that Greece's debt burden could still stagnate at an unsustainable 160% of GDP by the end of this decade. The analysts also expressed doubts over whether the Greek Government would be capable of delivering the austerity measures demanded by Greece's European creditors in exchange for a new bailout.

These measures are imposing unprecedented hardships on the Greek public, which are similar to the effects of Ireland's bailout on the public here. In Ireland, the citizens definitely are taking the brunt of these indefensible measures following the economic crash and, subsequently, those at the lower income scale in this country have been hit disproportionately by the draconian measures. Unfortunately, the European Union financial authorities are not rewarding Ireland for its people's toleration of the extreme austerity measures, which the less well-off in society are bearing. They have no choice except to take the medicine, which is driving the majority of the public further down the road to poverty and suppression. In contrast, Greece is being granted handsome concessions and co-operation by the troika and European Union leaders to shore up its hopeless situation and to help it to limp along. In real terms - to be fair about it - Greece is a bottomless pit. It has experienced political volatility with three different Prime Ministers over the past 12 months. Moreover, its unemployment levels currently stand at 26% and are expected to reach 30% by the end of 2013. In this context, the Bills digest prepared by the Library and Research Service states:

Greece has experienced a major recession that, in terms of magnitude, is far worse than Ireland... Ireland experienced a major fall in GDP in 2008 and 2009, with a small fall in 2010 and some positive economic growth since then.

Greece, however, while initially experiencing a milder recession than Ireland, has had large falls in GDP each year from 2009 to 2012 and is expected to experience another large fall in 2013. Even if GDP does stabilise in 2014, Greece's economy will be 22.5% smaller in 2014 than in 2007. Ireland's cumulative fall from peak was 8% and in 2014 GDP is expected to be 3.5% below 2007 levels.

These statistics illustrate that Ireland, although in a serious predicament, has a viable pathway ahead to reach eventually total stability and solvency in the longer term. However, if Ireland is to recover within a shorter timeframe, it needs tangible solutions and concessions from the European Union similar to the Greek loan facility, as well as similar terms to those Greece obtained last November. I refer, for instance, to the terms of the European Financial Stability Facility, in which the length of the term of the fund payments was increased, interest payments were deferred and a guarantee fee payable by Greece was cancelled completely. These measures conceded to Greece show the farcical position whereby the troika and European Union are holding Ireland practically to ransom at present and there are very few signs of action being taken to ease Ireland's position in any substantive manner.

I believe the Greek solution to be a high-risk strategy by the eurozone to keep Greece in the single currency. If Greece misses its targets, for instance, when the German voters go to the polls next autumn, the bailout could once again be in complete jeopardy. It could happen that Germany could be faced with a nasty dilemma of either restructuring its Greek debt or refusing to offer Greece further help, thereby perhaps allowing the bailout to collapse. I believe it to be futile to throw good money after bad, given Greece's precarious position. It is a country in which tax evasion is rampant whereby in 2011, half of Greece's self-employed professionals, such as doctors, lawyers and engineers, declared incomes of less than €5,000, which is hard to believe. Given such a scenario, I cannot envisage how the several deficiencies present within the country itself will be addressed either by the Greeks themselves or by the European Union. It is obvious and inevitable that Greece will eventually go over the cliff. I hope this will not happen but if such a default takes place in time, it should be effected via a structured exit by Greece to minimise the contagion to the rest of the European Union. Given the current political instability and social unrest in Greece, there is considerable uncertainty regarding the implementation of the programme and the overall success of the plan for Greece. Therefore, due to the reasons I have outlined and on a point of principle, I am extremely reluctant to support this Bill before the House today.

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