Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

The position in Cyprus, a fellow eurozone country, is extremely grave. The country's banks remain closed today and it is uncertain when they will reopen. While the crisis is first and foremost one for the Cypriot people, it could also have major implications for the wider eurozone economy, including Ireland. Nine months ago, in June 2012, Cyprus first signalled that its banks would require a bailout arising from their exposure to the Greek debt crisis. At the weekend, emergency negotiations on Cyprus went down to the wire and resulted in deeply flawed proposals being made. The decision of European Finance Ministers and the troika to raid the private savings of ordinary Cypriot citizens was a serious mistake; they got it badly wrong. Incredibly, the Government welcomed this plan on Saturday morning as positive for Cyprus, the eurozone as a whole and Ireland. The decision to dip into personal savings and bypass the €100,000 deposit guarantee which applies across the eurozone will serve only to undermine the confidence of ordinary savers throughout the eurozone. Not surprisingly, the proposal was roundly rejected by the Cypriot Parliament. Despite reassurances that Cyprus is a unique case, the message that people will have received from the developments of recent days is that bank deposits are no long sacrosanct in the eurozone. A Rubicon has been crossed and a dangerous precedent set.

Given our repeated insistence that corporation tax is a matter for each member state, it is difficult to believe that under Ireland's Presidency the Government agreed to insert a condition in the Cypriot bailout requiring Cyprus to increase its corporation tax rate from 10% to 12.5%. If the European Union under our Presidency does not demonstrate it has the capacity to deal with the crisis in Cyprus without that country having to look east and turn to Russia for assistance, the entire eurozone will have been weakened. Will the Minister give an absolute assurance that there are no circumstances, including if it were to transpire that our banks needed additional recapitalisation, in which our citizens will have their private savings targeted in the manner in which Cypriots have had their savings targeted in recent days?

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