Thomas Pringle (Donegal South West, Independent) | Oireachtas source

This debate takes place after the fiasco of last Wednesday night when legislation was rushed through on the liquidation of IBRC. We know now from the Minister's comments that the receiver was put into IBRC at 4 p.m. on Wednesday last. At that point there was no barrier to the Minister briefing the Dáil on the need to sit late to pass emergency legislation. Instead, Members had to find out from Twitter and thejournal.ie about what was happening to the extent that when the Chief Whip came to the House to amend the Order of Business, his intentions were already online. This was a deliberate and blatant contempt for the House and the mandate of all Deputies elected to the current Dáil.

This week's debate is organised as a lap of honour for the Government to slap itself on the back about the great job it has done. What has been achieved? There may be a medium term gain in savings on interest payments - reported to be approximately €1 billion per annum - but none of that will be felt this year. The Government claims that on top of interest savings the deal will reduce borrowing by €20 billion over the next ten years. This is the same amount as the savings on interest rate payments. It is where the saving on interest rates comes from. I have read reports that it will only lead to savings on borrowings of €8 billion over the next ten years. The Minister must clarify the matter.

No one on the Government side seems to be able to quantify what the deal means for ordinary citizens. Will they get any respite from the relentless cycle of cutbacks and reductions in services? It is only when that is clarified that people will be able to evaluate the deal. We know the deal takes a debt we had no obligation to repay and makes it into a sovereign debt. The Government has taken out an interest-only, 100% mortgage in exchange for the promissory note and even at that we will still pay two thirds of the promissory note cost each year. These gains will only remain if the Central Bank can hold onto the bonds for the remainder of the term. The Central Bank has outlined that it will sell off €5 billion of the bonds between now and 2023. What will happen to the gains if the ECB insists on a higher rate of sell-off and forces it on us?

The deal makes some medium term budget savings but huge issues remain. Our debt-to-GDP ratio will remain at an extremely high rate of well over 110%. Where now for the agreement of the European Council of June 2012? The Government has made much of the game-changer that was to break the link between sovereign and bank debt but the deal solidifies banking debt as sovereign debt into the future. How will the Government ensure that the commitment of last June is maintained when it has accepted the principle yet again of linking banking debt to the sovereign? We have seen the death of the June commitment. That was highlighted today in an Open Europe report. The German finance minister, Wolfgang Schäuble, has said that any bank recapitalisation through the eurozone's bailout fund, the ESM, must be significantly below the €80 billion paid in capital. He stressed that there will be no increase in commitments or guarantees for the ESM to aid banks. A deal based on last June's agreement is getting further and further away. What level of funding will be available for bank recapitalisation when the larger, more powerful countries get their share and our banks are not indispensable to the security of the eurozone? In addition, the ECB has said there will be no bank recapitalisation without member states guaranteeing the funding. That means any legacy bank debt will only be picked up if we guarantee that it will be repaid. That is sovereign debt in every sense.

The only way to ease the burden of debt on our citizens was to insist on a write-down. Unfortunately, the Government gave away the best cards it had. The Government was bluffed by the ECB and although the ECB gave in on monetary financing, the markets will be the only winners in this deal.

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