Joan Collins (Dublin South Central, People Before Profit Alliance) | Oireachtas source

As Deputies will be aware, there was an extremely important judgment this morning in the High Court. This judgment was made in regard to the case in which I, as an elected Member of Dáil Éireann, challenged the constitutionality of the promissory note arrangement made by the late former Minister for Finance in December 2010. The basis of the challenge was that some €30 billion in public funds was appropriated without a vote in Dáil Éireann. I believe the judgment of the three judges today was a monumental decision and has huge implications as to the rights and power, or lack thereof, of the elected Members of Dáil Éireann.

In light of that, I urge all Deputies to consider carefully this judgment. If the full 68 pages are too much, I refer the Deputies to paragraph 143 of the judgment and refer them back to paragraph 10. I want to read into the record those two paragraphs. Paragraph 143 states:

The Court accepts as the definition of appropriation for the purposes of Article 11 [of the Constitution] that proposed by Alexander Hamilton in respect of the parallel provisions of the US Constitution, namely that the appropriation must be for “an object, to an extent, and out of a fund, which the laws have prescribed.” Applying that test to the present case, it can be said that the objects of the appropriation under the 2008 Act are clear and satisfy the requirements of Article 17.2 [of the Constitution]. Section 6(12) of the 2008 Act further provides that the payment comes from the Central Fund in the manner envisaged by Article 11. The extent of the payments are also clear. While, of course, the Oireachtas did not know precisely the sums which were at stake when enacting the 2008 Act, it laid down principles and policies in s. 2 and s. 6 of the 2008 Act which circumscribe the extent of the Minister’s discretion to provide financial support.

Paragraph 10(1) states:

The Minister has, in the public interest, the functions provided for under this Act because, after consulting the Governor and the regulatory authority, the Minister is of the opinion that-(a) there is a serious threat to the stability of credit institutions in the State generally, or would be such a threat if those functions were not performed,

(b) the performance of those functions is necessary, in the public interest, for maintaining the stability of the financial system in the State, and

(c) the performance of those functions is necessary to remedy a serious disturbance in the economy of the State.

This is to say that the money appropriated, some €30 billion, was for a purpose and it came from the appropriate fund. This means that in quite a wide range of circumstances, without any upward limit, a power to spend public moneys has transferred from the Dáil to the Minister for Finance. In my opinion, this has to be reversed. This gives the Minister for Finance - in the past, in the present and into the future - the power to appropriate public funds without limit and without any reference to, or a vote in, the Dáil, provided it is for the purpose of bailing out banks.

I want to come back to the issue of the promissory note. An important question in this debate is why there was a promissory note. If the Government, or in this case the Central Bank, wanted to put money into Anglo and Irish Nationwide, why did they not do so? The answer to this question is very important to this debate. The Central Bank could not extend emergency liquidity assistance to Anglo or Nationwide because the problem was not one of liquidity but of insolvency, and this would have contravened ECB regulations. The Government, the Central Bank and, very importantly, the ECB knew they were dealing with insolvent, non-rescuable banks, which is why the financial manoeuvre of the promissory note was resorted to. The Government gave two busted banks an IOU which they could put on their books as an asset, making them technically solvent. The Central Bank was, therefore, free to extend the emergency liquidity assistance to them to the tune of €20 billion.

The other question which is very pertinent to this discussion is why the ECB, the Central Bank and the then Government engaged in this manoeuvre. Was it a mistaken, ill-judged attempt to rescue two failed banks? No. This was done to satisfy the demands of the ECB that the bondholders of Anglo and Nationwide be paid, and paid in full. The reason for that was to protect the European banking system. The ECB was in it up to its neck and it should be under enormous pressure. It has very serious questions to answer regarding its role in these events but it is not doing so because this Government has failed - it has failed spectacularly to ask those questions.

What this motion proposes is what this Government should have been doing over the past two years if it was to fulfil the promises made in the 2011 general election. It involves exposing the role of the European Central Bank in transferring a huge and disproportionate part of the cost of saving the EU banking system on to the backs of the Irish people. The Government should be putting forward clear and, in the circumstances, reasonable demands for the removal of the burden.

The transfer of the promissory note into bonds held by the Central Bank is neither here nor there. Every year for the next 40 years, €2 billion will be taken out of our economy and destroyed. That €2 billion cannot be used to solve problems in our health service, provide jobs, build homes, develop our education system or provide SNAs in our schools. It will not be used to provide an extra bed in a hospital.

I moved this motion on behalf of the Technical Group with the support of other Deputies in the Dáil and commend the "Ballyhea Says No" campaign for its relentless campaign on this issue over the past two years. I salute it, its actions in Ballyhea every Sunday and its actions in going to Europe to ask questions that this Government should have been asking over the past years, namely, to write down this debt that is not our debt.

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