Michael Creed (Cork North West, Fine Gael) | Oireachtas source

When this Government assumed office, it faced a challenge of similar magnitude to the founders of the State. In that context, I place on the record of the Dáil my appreciation for the result achieved by the Government in respect of the promissory note. I acknowledge the role played by the Minister, Deputy Noonan, the Taoiseach, the Tánaiste, and all their ministerial colleagues, but it is important to record the sterling work done by senior officials in the Department of Finance and our diplomatic corps across Europe. A serious job of work had to be undertaken, which was referred to by previous speakers, in restoring our international standing and our standing among our European partners, particularly those who share the euro as a common currency.

In recent weeks, on foot of a media frenzy that seemed to suggest we were about to suffer a humiliating defeat, as stated by Deputy Ross during Private Members' business last week, I also began to wonder whether the deal was possible. For very obvious reasons, the Government's endeavour since it took office had to proceed in the utmost secrecy. It is a very significant achievement. Anglo Irish Bank died many years ago. This deal represents the burial, once and for all, of the IBRC and the end of the promissory note.

It is somewhat difficult to accept the lectures coming from the Opposition benches, particularly Fianna Fáil. I have listened to the leader of Fianna Fáil and other contributors in this debate. The promissory note is a creature of the previous Government, particularly Fianna Fáil. Fianna Fáil would have been better served by saying little rather than making the types of contribution it has made.

Much has been made of the fact that the deal is not a debt write-down. It is a debt write-down by any other name. It remains to be seen whether the deal will be challenged. I hope it is not challenged and that it will stand up. There is a fear that there could be a legal challenge anywhere across the eurozone. Anybody who states that pushing out our repayments over 25 to 40 years on Government bonds, subject to a low interest rate of 1%, represents a bad deal is not living in the real world, considering that we were facing up-front payments of €3.1 billion every March for the next eight years. While it is important not to overstate what we have achieved, the deal represents a good foundation. It deals with 40% of the legacy bank debt that the Government inherited. We must now build on the European leaders' summit of 29 June last year at which a commitment was made to break the link between sovereign debt and bank debt. That is the next step on the road to recovery.

It is important not to overstate the impact of the deal. There is much clamour over what it will mean for the ordinary person on the street. I am not sure the effect is immediate. It means we will not have to borrow more, not that we will have the opportunity to spend more in the immediate term. Our debt-servicing cost will be lower. If we can build on this and achieve a result in respect of the cost of the remaining banking debt, we will be making a very significant step in rebuilding the economy.

The problem the economy faces at present is the gap between what we spend and what we earn. Regrettably, until we re-establish businesses, create employment and get more people back to work and paying taxes, our austerity programme will continue. People ask whether the deal will mean the end of property tax and water charges. It will not. It is foolish to raise that expectation.

See this speech in context