Peter Mathews (Dublin South, Independent) | Oireachtas source

I also welcome the Minister of State and wish him well in his new role. Having said that, I am hugely disappointed at the position that other Members and myself have been put into - there are too many of us now in this House - as a result of the choreography of passing legislation and voting. Here we are, making statements post the European Council meeting but the arrangements for statements prior to the Council meeting precluded me from engaging in any meaningful conversation with anybody before they went to that meeting. I think that is pathetic. The letter that was a precursor to the Council of Ministers meeting, signed by the Taoiseach, was also pathetic and an embarrassment.

I wish to raise a number of issues. First, was any amount of debt for write down, whether that was bank debt in the two remaining pillar banks or Government debt held by the Central Bank, discussed or requested at the meeting? The answer to that is either "Yes" or "No" but my guess is that the answer is "No". I ask that question because the remaining Irish banks are zombie banks. The foreign banks are getting out of this country. If they saw green shoots in the economy, they would stay. Is that not the case? They are not staying because they want to clean up the detritus and the destruction on their balance sheets and just get out. They now want to concentrate on smaller units of banking in their own host countries.

When I hear terms like "asset quality review" across European banks, I hear nothing more than obfuscation and fog. The assets that are held in a lot of European banks are Government bonds. They are the assets and those bonds, depending on their attractiveness or doubtfulness, go up and down in value. Yields go up and down, depending on the speculative cash that follows assets, whether they are bonds, assets or equities. At the moment, hedge funds are investing in equities, which is why there has been an increase of almost 25% in equity prices on the markets. The funds got out of bonds and went into equities.

The bank capital across Europe is highly fragile but this fact is being hidden behind a fig leaf of long discussions and so on. AIG is suing the banks in the United States because of the sub-prime loans they created. The sub-prime loans were the source and core of the problem in the United States but that is not the case in Europe. The problems in Europe relate to all sorts of other assets and off-balance sheet exposures that we do not even fully understand yet.

The most important task for members of Government and the Civil Service to undertake now is to read the book by Joseph Stiglitz, The Price of Inequality, which is now available in paperback.

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