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

I wish to speak in support of Deputy Pearse Doherty's amendment. On Committee Stage, we engaged in a lengthy discussion on this issue. Realistically, I am of the view that the prospect of achieving a retroactive deal on bank debt is becoming less and less likely. That is an observation which the Minister may dispute. His position seems to be that he is going to hold in reserve the prospect of seeking such a deal, that he will leave a number of balls hanging in the air, that he will possibly sell a stake in AIB - which sends out a certain signal - and that he may eventually submit an application. The window for making applications opens on 4 November, which is less than three weeks away. Shortly thereafter, the Minister should apply for a deal on bank debt on behalf of the State. Ireland still has a colossal national debt of over €200 billion, a substantial portion of which relates to rescuing the banking system. We ultimately benefited from the latter in terms of avoiding the catastrophic consequences of allowing the banks to fail but it must be noted that Europe also benefited. A number of banks throughout Europe were saved as a result of the action we took. Our position is that the Minister should apply for a deal on bank debt and that the should do so as soon as possible after 4 November. Ultimately, Ireland deserves recognition that it stepped up to the mark, took one for the team and saved not only its own banking system but also that of Europe.

On Committee Stage, I pointed out that the overall funding available from the ESM will be just €60 billion. That amount is to meet new capital shortfalls in banks throughout Europe and also, potentially, to deal with the issue of retroactive recapitalisation. The quantum of money available has led me to conclude that it is becoming increasingly that the Minister will be able to obtain a deal. However, he must at least apply for such a deal and put it up to his European partners to fulfil the commitments made in 2012 and honour the words contained in the relevant agreement with regard to separating banking debt from the sovereign. He must impress upon them the need to deliver on the commitment made in respect of Ireland, which was heralded here, by the Taoiseach, the then Tánaiste and others, as a game-changer and as representing a seismic shift. As I stated a number of weeks ago, the real game-changer arrived approximately one month after the agreement reached at the 2012 summit when Mario Draghi stated that the ECB would do whatever was necessary to save the euro. That is what stabilised the markets and what, ultimately, has been most beneficial to Ireland.

The matter of a deal on bank debt has been left unresolved. The Minister will argue that the issue relating to the former Anglo Irish Bank and the IBRC has been dealt with by means of the deal on the promissory notes. However, an amount of €30 billion remains in play. I refer to the money that was invested in AIB, Bank of Ireland and Permanent TSB. Let us be honest and state that we are not going to get all of this back. The Government has already got money back from the income on guarantee fees and selling some of its stake in Bank of Ireland. Let us obtain the best deal possible. This will not happen if we fail to make an application. The Government must apply on behalf of the Irish State as soon as possible in order that we might have clarity on where we stand in respect of the banking system. I have stated on many occasions that we require a clear strategy on banking. We do not have such a strategy. For example, we do not have a strategy in respect of competition in the banking sector. At present, there is a virtual duopoly in place with AIB and Bank of Ireland and this is not healthy for the economy. This matter must be dealt with and the sooner we obtain finality and clarity in respect of the issue of a deal on bank debt, the better.

The Minister's position is to leave the option of applying open since events in Europe may evolve and we never know what will happen and then we can strike and we might be able to benefit from other events. That is what occurred in respect of the interest rates on the bailout money, for example. However, the issue is more urgent. We need absolute clarity and certainly. My party and those of us on this side of the House advocate an early application for a deal on bank debt.

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