Peter Mathews (Dublin South, Independent) | Oireachtas source

I thank Deputy Kirk and the Fianna Fáil Members for this brief two minutes speaking time. This is a very important and relevant motion. Credit is creative because credit actually gives the energy to business to do what it does, which is to produce goods and services. Debt, by contrast, is usually dead weight and depressing. What has happened in this economy is that we have legacy debt. As I have explained on a few occasions and tried to make the point come home to the Minister for Finance, the dead weight of debt over households, SMEs and other businesses and the Government debt, combined, puts Ireland at the top of a very challenging table. That is what is depressing things.

I worked with ICC Bank for 20 years. It was the development bank which gave money to SMEs under various types of credit such as fixed asset credit and working capital credit and all the rest. The board of the bank did the engineering of that balance sheet correctly. The loans to deposits were correct. When the bank was taken over by Bank of Scotland (Ireland), all those rules of prudential banking were thrown out, as happened in the main banks in this country. As the previous speaker said, they are trying to correct their balance sheets. They are trying to walk through a swamp but the swamp has to be drained and there has to be creditor compression. That means that the legacy creditors, including the eurozone and the euro system, have to do some restructuring and write-down, otherwise the new credit requirements will be snuffed out and smothered.

There is lots more to say but I do not have time. When the foreign banks are exiting that does not bode well. If everything had turned the corner they would be staying here because their historical losses are historical. It begs a question. I say to the Government, to the Taoiseach and to the Minister for Finance, that when they go to Brussels to speak to people like Draghi, they should tear up the long-dated bonds that replaced the promissory notes because that will concentrate their minds. It would be a justified tearing up. It is not doing something wrong; it is morally, financially and in every way justified. Otherwise, as Stiglitz rightly said, because the bankers caused it, we will have ten years of stagnation.

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