Shane Ross (Dublin South, Independent) | Oireachtas source

I was in the City of London on Monday, where I met a number of prominent city people who asked me if I had come over with the Taoiseach who was in the Mansion House. They were not aware of the niceties of Irish politics. I told them I had not been invited to accompany the Taoiseach because I was not part of that cabal - I did not use that word. The Taoiseach will be interested to hear that they gave a eulogy about how well he was doing with the economy. Their analysis of what was happening here was very favourable. Although it was somewhat superficial, I let it go because I think it improper to express my own political opinions outside the country.

Ireland is in a difficult position in Europe because of the extraordinary approval given to the Taoiseach and Government policy outside the country. I suspect this approval is swallowed a little too eagerly by the Government, but it is not the approval those at home necessarily consider to be worthwhile. There is a disconnect between Christine Lagarde, Angela Merkel and others who heap praise on the Government and the people who are suffering from its policies. The Taoiseach should use the opportunity provided by the summit in Brussels to tell them all is not rosy in the garden and that they have a misconceived and rather flattering picture of what is happening in Ireland. It is time they woke up to the fact that issues are emerging in this county which threaten to undo much of what the Taoiseach, the Tánaiste and the Minister for Finance would describe as their good work and progress. It is an analysis with which I would not necessarily agree, but they should use it to their advantage nonetheless.

The Taoiseach should remind the European Union that it has a responsibility to come to the rescue of Irish banks which are still in deep trouble. The claim that somehow the banks are on the trail to recovery is not accurate. Later today the Taoiseach will launch a programme on mortgage arrears. This train is coming down the tracks and an accident waiting to happen, as the extent of the problem has not been acknowledged. He rightly blames the Opposition for its disastrous economic legacy, but his Government has sat on the mortgage arrears problem ever since it took power. In 2009 approximately 17,500 mortgages were in arrears. That figure now stands at 180,000. What the Taoiseach and Ministers describe as their restructuring efforts have failed abysmally. Half of the mortgages that have been restructured are already in arrears. He needs to tell the European Union that we are in deep trouble with these arrears, instead of saying we are going to solve the problem by ourselves.

The European Union has a responsibility because its banks lent the money that was lent on for these mortgages. He must get the Union to recognise this problem. The ESM must be used to recapitalise the banks because it is certain they will be looking for recapitalisation sooner or later in the light of the failure of the Government and the banks - they are in it together - to recognise the existence of mortgage arrears which will never be paid and cannot be paid. Pretending that the problem will be solved by more of the same failed policies will not work. If the Taoiseach can get the Union to recognise the need to write down and write off debts and for the banks to make proper provision for the bad debts that result from these mortgage arrears, he will have done a great service. The banks will need recapitalisation at some point, but that is the taboo we are refusing to tackle. If the Taoiseach tells our European colleagues that we are in trouble and will need recapitalisation because the banks' books do not recognise the debts, he will do us a favour. He should say to the European Union that all is not rosy here. We need its help and ESM money because there will be recapitalisation down the road.

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