Mick Wallace (Wexford, Independent) | Oireachtas source

Tony Healy of the Nevin Economic Research Institute in an interview on RTE radio this morning described our situation "as the largest and most expensive public bailout of private banks in recent European history; it is really impacting on people very severely and I think there is a lot of concern abroad about the capacity of Ireland to repay these debts". He went on to say: "We are in the bailout not because we burnt the bondholders but because we did not burn the bondholders ... and now the situation confronting us is that we are due to pay €3 billion at the end of March, we are owing another €3 billion on 1 June when the Bank of Ireland's bond for last year's payment is due, and we are due [to pay] a third €3 billion in March 2014 - that is €9 billion" in just over a year as well as the money to follow. He argued that "it is very unlikely that the ECB would withdraw liquidity from the Irish system; it certainly would throw the whole system into chaos". He also said that "the risk of targeted interest rate increases on the banks is possible but I think you have to weigh up that risk against a risk of" paying out all this money.

It reminds us of what happened after the First World War when the Germans were too heavily penalised and the reparations which initially amounted to the equivalent of 96,000 tonnes of gold were later reduced to just over 40,000 tonnes but it created such problems for German society and undermined the fabric of it so much that it facilitated the rise of Hitler. I would like the Tánaiste to bring the point to Europe that the fabric of our society is being undermined by the debts we are expected to pay and the level of unfairness involved. It will cause further problems down the road for Irish society and it has done nothing to deal with the level of inequality that exists here which is also becoming a huge problem. Most economists would agree that inequality is a huge risk to financial stability. The Europeans should take this on board a bit more.

The Europeans have set targets on the assumption that economies would recover despite the tightening of fiscal policy but in a balance sheet recession when the private sector is cutting spending to reduce its over-indebtedness, that assumption is wrong. Put simply, we cannot all deleverage at once. To save more, one spends less and if the eurozone, including this Government, does that, the economy has to shrink.

There are 6 million people unemployed in Spain and in the south of that country, 66% of those aged between 24 and 30 are unemployed. There are huge problems coming down the tracks there. It is clear that austerity has been self-defeating for Spain.

There must be a U-turn in EU thinking because the current thinking is undermining democracy. Democracy is being frowned upon now and there is an idea out there that in this complex economic situation, the majority of people are not qualified to decide what is best. The belief seems to be that people are unaware of the catastrophic consequences that might ensue if their demands were met but the truth of the matter is that the crisis offers proof that the experts themselves do not know what they are doing. In western Europe we are witnessing a growing inability of the ruling elite - the treatment of Greece being a prime example - to solve the crisis and unfortunately the blind appear to be leading the blind.

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