Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

I congratulate the Acting Chairman on the superb job he is doing in the Chair. It is important to keep Deputies on track.

The issue of whether we should seek retroactive recapitalisation of our banks is related to whether we are prepared to demand that Europe play its part by retrospectively lifting some of the crippling burden of debt that has been imposed on Irish citizens and shouldering it itself. The moral, political and economic case for Europe bearing its share of this intolerable burden is unanswerable. The entire burden of a crisis that Europe played a key part in creating was imposed on Irish citizens. Ordinary working people, the unemployed, school children, the disabled and pensioners took the hit for a crisis which was not of their making but was, to a large extent, engineered in Europe with the active collaboration of the Irish Government. The least we can do, even at this late stage, is to ask that Europe do what it should have done when the crisis broke by taking its share of the burden arising from a crisis it created. However, an examination of the Bill makes clear that there is no chance - none, zero, zilch - of this happening.

I suspect the reason the Government is reticent about making an application for retroactive recapitalisation is that it knows it would have no chance of success, and anything we might get would be derisory compared to the suffering and pain that has been imposed on citizens. We know that is the case because the fund provides only €60 billion for recapitalisation of any kind, not to speak of retroactive recapitalisation, for the whole of Europe. Ireland provided €64 billion to Irish banks, but there is no chance the European authorities will give us the entire €60 billion available for retroactive recapitalisation in the fund.

A reading of the conditions that must be met to access the fund shows that one must jump through so many different hoops that there is virtually no chance of accessing it. The Bill does not spell out in any detail what will be the criteria for accessing the recapitalisation component of the fund, other than that applications will be considered on a case-by-case basis. We must assume, therefore, that the criteria will be the same as those that will apply for general applications for recapitalisation support made by a member state of the European Union going forward. I apologise for using the awful expression "going forward"; it just slipped out.

We welcome one aspect of the so-called waterfall of criteria and conditions, namely, the bail-in that will apply to bondholders. The major problem this creates for Ireland is that the State is the bondholder in our case because we had to bail out the banks. If the first call must be on the bondholders, that call would be made on us to a large extent. As a result, we would be required to show we were willing to be bailed in before we could even apply for funding. The second stage also requires that we would have to be bailed in, as it were, because this stage requires that the State show it has exhausted all of its resources, if one likes, to bail out a bank that has got into financial difficulty before it can apply for access to the funds. As such, the first hurdle requires citizens to pay and the second hurdle also involves citizens paying. Once we have completed the first two hurdles, we must prove that the entire European economy is in danger. As a result, it will be nigh on impossible to access this fund, which has very little money in it in any case. The chances of accessing funds for retroactive recapitalisation are, I suspect, zero to zilch, and if we secure any funding it will be negligible. If that were not the case, a much greater amount would have been allocated for retroactive recapitalisation and much more detail would have been provided on how the retroactive component of the fund will function.

The least the Government can do is apply for retroactive recapitalisation. Let us test the system and find out the response. I do not see any reason for not making an application. Since the so-called statement of two years ago, we have heard that the European Stability Mechanism will be a game changer and so on. I believe the statement was a political sop given to the Government and there was no serious intention to give Ireland what we were seeking. Let us ask for retroactive recapitalisation, and if the European authorities do not give us a reasonable deal and assume some of the burden, let us simply tell them they will not get their debt interest. The Minister has stated many times that we could not possibly take that position because we are borrowing to stand still and our expenditure is greater than our revenue. That excuse no longer holds because we now have a primary surplus and are taking in more revenue than we are spending on public services. The major drain on the economy is the €8 billion per annum we must pay in debt interest.

I hate the idea that a society is run on the basis of balance sheets, because they are always about numbers rather than the people represented by the numbers. Let us recall what is on the other side of the balance sheet, with the €8 billion in interest that we will pay out to these guys next year. Our interest payments on the national debt will be roughly equivalent to the budget for education in 2015. I have just come from a picket in front of Leinster House by construction workers who are building a school on behalf of the State. Having understood they would be paid the legal rates for doing their job, they discovered after five weeks' work that they were being paid €5 per hour and the builder was essentially abusing the system of self-employment.

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