Stephen Donnelly (Wicklow, Independent) | Oireachtas source

In the light of the promissory notes vote we are taking tomorrow which is critical for Ireland, I note that the President of the European Council, Herman Van Rompuy, said, "This compromise shows a sense of collective responsibility from Europe's leaders." We in Ireland understand this. In a time of deep economic crisis Fianna Fáil, on behalf of the people, committed €35 billion to Anglo Irish Bank and Irish Nationwide Building Society. Why? The answer is to secure the eurozone banking system. That is collective responsibility and solidarity. However, collective responsibility and solidarity are a two-way street. I do not believe we are seeing a return on the collective responsibility and solidarity we showed in 2008 and 2010. At 1.30 p.m. tomorrow Dáil Éireann will be asked to welcome the restructuring of the promissory note deal. The Governor of the Central Bank, Professor Patrick Honohan's comments yesterday were interesting in the light of this. He is clearly frustrated at the banks because they refuse to engage in a meaningful way on the issue of debt write-downs and are instead keeping people on the never-never of interest-only mortgages. The Government, with most of Dáil Éireann, is rightly with Professor Honohan that this is not acceptable. One cannot solve debt problems by keeping people on interest-only mortgages that go on forever. That, however, is exactly what is the new restructuring of the promissory notes.

The Dáil is being asked to welcome a deal for the people on €31 billion of other people's debts which we are in agreement at the same time is not how they should be treated by the banks regarding their own debts. This does not seem right to me. Should we welcome this promissory notes deal? Perhaps it was the best deal that could ever have been got. We will never know. I do not think it is the best deal, but I fully accept it may be. The reason I do not think it is the best deal is we know the Minister for Finance, Deputy Michael Noonan, never asked for a write-down on the principal of €31 billion. He got very upset with me here yesterday evening when I pointed out that Greece had asked for a write-down of €110 billion on its sovereign debt. He was right to point out that the Greek situation had to do with private holders of sovereign debt but so are the promissory notes. The promissory notes are not owed to the European Central Bank - not yet anyway - but to two dead banks, just like the Greek sovereign debt was owed to banks. Greece secured a 53% reduction in the principal. If this had happened for Ireland, the Government could have announced the sum of €31 billion had been shared with the European Union and that we were now on the hook for €14 billion. Greece achieved this on its sovereign debt, but we did not achieve on the promissory notes which are not the same as real debt, as they are an IOU. We did not get anything in exchange. Anglo Irish Bank did not give us €31 billion in cash; we just offered it to the bank. In law a contract in which one party promises something but gets nothing in return is not always enforceable.

Regardless of where any of us stands on this deal, it is fair to say we would all prefer to see a write-down of debt and lower funding costs. What would happen if instead of voting "Yes" tomorrow Dáil Éireann voted "No"? Let us imagine if Deputies on all sides of the House were allowed to vote based on their own analysis of Ireland's best interests. If we vote "Yes", we will send a message to the people, the ECB, Angela Merkel and the rest of Europe that we welcome this deal with its lower funding costs and turning dodgy banking debt into gold-plated sovereign debt. What if we say "No"? As this is not the Finance Bill, just a motion, the Government would not collapse. It will say Dáil Éireann does not welcome this deal with the people taking on the losses of Anglo Irish Bank and Irish Nationwide Building Society or the abandonment of solidarity in Europe. If we vote "No", we will be saying we may end up having to swallow this bitterest of pills but, by God, we do not welcome it. It is for that reason we should vote against the promissory notes deal tomorrow.

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