Paul Connaughton (Galway East, Fine Gael) | Oireachtas source

I thank the Chair for giving me the opportunity to speak to the motion. I take the opportunity to congratulate the Minister for Finance, Deputy Michael Noonan, the Taoiseach and all the officials involved in the negotiating process on a job well done. The negotiations were very involved and difficult, but the process has been worthwhile. It has borne fruit and resulted in a deal which will make Ireland's debt more sustainable and ease the economic burden on the country as we make our way out of the financial crisis. For many months, since the outset of the crisis, every time one turned on the news one was met with a barrage of bad news in terms of various rating agencies downgrading the status of Irish bonds. This deal will ensure Ireland will turn the corner.

The restructuring of the promissory notes provided for the IBRC was a very necessary step in stabilising the country's economic fortunes. This stabilising influence is reflected in the fact that the rating agencies are to take a more positive view of Irish bonds.

This deal brings us €1 billion closer to attaining our 3% target deficit in 2015 and results in a massive reduction in the State's borrowing requirement of €20 billion in the next decade. This represents money that we do not have to borrow, rather than money in hand. While this is less tangible in some respects, it makes the task facing the Irish people, in terms of extracting the country from the financial mire in which we found ourselves following the last general election, less daunting. As a country, we continue to face many difficult decisions. The budget deficit is still very large. We need to make further progress on the debt assumed from the pillar banks.

While I welcome the deal that has been done, I think it should be seen as no more than a step along the road. Tough decisions remain to be made, for example in the area of mortgages. I know the Minister for Finance recognises the need to ensure the banks deal fairly with the thousands of families that are in serious mortgage arrears and are unable to sustain their unsustainable debt levels. Every Member of this House regularly meets people who are in great financial distress. All too regularly, we witness the emotional distress this causes. Our top priority must be to tackle this thorny issue. All necessary pressure must be brought to bear on the banks to ensure they deal with householders on a case-by-case basis. Where write-downs are necessary, they must be undertaken.

I note that the Governor of the Central Bank, Professor Patrick Honohan, has said that household financial distress is at unprecedented levels. This is reflected in my experience of meeting people at my clinics in County Galway every week. According to Professor Honohan, the Central Bank and the banks have been ramping up their efforts to address these problems. This is not being reflected in the experience of my constituents whose stories I hear on a regular basis. Far too often, customers are met with a brick wall when they attempt to point out to their banks that their debts are simply unsustainable. The lack of action on the part of the banks is not just regrettable - it is morally wrong.

Families throughout the country are having to pick up the pieces as the banks hope the money will somehow materialise if they put enough pressure on hard-pressed families. This issue will have to be tackled in cases where the money needed to meet mortgage costs is simply not there. We cannot let a generation of this nation's children grow up in homes where the dark cloud of unsustainable mortgage debt is all-pervasive. Professor Honohan has spoken out about the consequences for borrowers who are not co-operative and are refusing to make a reasonable effort. While I am aware that such cases exist, I assure the House that in the majority of the cases with which I deal, the banks rather than the borrowers are refusing to make a reasonable effort.

The promissory note deal also signals the welcome death knell for Anglo Irish Bank and Irish Nationwide. Everyone in this Chamber is only too aware of the price the Irish people will pay for the decisions of rogue bankers for decades to come. This deal is a further step in the right direction as Ireland aims to emerge from the programme of assistance, and stand financially on its own two feet, at the end of 2013. All of the targets have been met to date. The necessary restructuring of the financial sector has been achieved. Ireland will regain its economic sovereignty if it emerges from the programme of assistance, which is the aim of the various steps the Minister, Deputy Noonan, and his officials have been working so hard on in recent months. I will conclude by again acknowledging the work of the Minister, the Governor of the Central Bank and the diplomats and officials in the NTMA in securing this most important deal for Ireland.

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