Róisín Shortall (Dublin North West, Independent) | Oireachtas source

I share Deputy Murphy's concern about the disregard with which the Government treats duly elected Members of this House. That action seriously undermines our democracy and it is something on which the Government must reflect.

Like most deals, the deal to restructure the promissory notes has good and bad points. On the positive side, this deal is better than no deal. We have swapped a short-term loan for longer-term bonds. If 2% growth rate is achieved and if inflation is kept at 2%, the real value of these bonds should be reduced over time. However, they are big ifs. In the short term, we are not faced with the annual €3.1 billion bill for Anglo Irish Bank. That is welcome and it will certainly ease the budgetary situation. The deal should improve our attractiveness to investors. The markets had already factored in a deal, so there are no shocks there.

However, while all of these are positives, it must be pointed out that this deal is a lot less than what the Irish people are entitled to. The €30 billion Anglo Irish Bank debt is not the Irish people's debt, and it should never have been on our books. I understood we had all agreed that the key objective must be to separate banking debt from the sovereign, to lift the legally questionable burden that had been placed on the shoulders of Irish people by the promissory notes. That was my understanding of the strategy in the negotiations leading to this deal. Last June, indeed, we were given to believe that the principle that this link must be broken had been accepted. Far from breaking that link, this deal copperfastens it. It shackles the Irish people to the gambling debts of reckless banks for the next 40 years and passes the burden to Irish people not yet born. How can one say there is any fairness in that?

The extraordinary thing is that the Government said it never sought any element of write-down. The first rule of negotiation surely must be that if one does not ask for something, one will never get it. In accepting that the bank debt is Irish Government debt, the Government put paid to any prospect of other eurozone members sharing the cost of stabilising the European banking system, which is what should have happened. The effective transfer of the promissory notes to the ECB and the fact that the ECB is legally precluded from writing down debt mean that this deal has tied the hands of all future Irish Governments.

As this deal did not secure a fixed interest rate, there remains considerable uncertainty about its cost. The interest rate on the bonds will probably be 5.5% to 6%. The bonds are 3% now only because the ECB interest rates are at record lows. In normal times, the ECB rate could be 3%, with the six months Euribor rate a little higher. These bonds will be 2.5% to 2.7% higher again. There has been little transparency about the detail of this deal, and the Government's spinning has not helped. Ireland was not paying 8% on the promissory notes. These were circular payments between State institutions, and the money was borrowed from the Central Bank at 0.75%.

There is also much concern about the lack of clarity about the implications of the deal for a number of legal cases that are pending. It remains to be seen how these will be concluded. For some time we have heard a great deal of talk from the Government and from senior EU and IMF officials about the importance of solidarity and burden sharing. However, the only solidarity in this deal is ultimately with bondholders, and the only people doing the burden sharing are the Irish people. It is not the EU or ECB, unsecured bondholders or well secured politicians, disgraced bankers or failed regulators who will pay this debt. The Irish people will pick up the tab in its entirety. Anglo Irish Bank might be gone but under this deal its ghost will haunt us all forever.

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