Catherine Murphy (Kildare North, Independent) | Oireachtas source

This motion refers to the call for a debt conference. It is often said that the most dangerous people are those who have nothing to lose. Too many people across Europe have been put in a position where they feel they have nothing to lose, not just because of the economic crash but how it has been responded to by powerful individuals and institutions who design outcomes in their own interest - outcomes for the few at the expense of the many. We should not be surprised at the reaction to this: mass demonstrations, a feeling of hopelessness and the political revolt at the ballot box. Huge levels of creative energy and ability are being lost through unemployment, underemployment and emigration right across Europe. Public services are being diminished, abnormal levels of personal indebtedness are limiting the quality of so many lives and ordinary citizens' pockets are being picked to pay back massive debts they did not incur in the first place.

The demand by the Greek people for a debt conference should and must be taken seriously, not least because of its democratic legitimacy, but also because it is essential for the future of Europe. It should be seen and supported by Ireland as a helpful and hopeful initiative.

As President Michael D. Higgins put it when addressing the European Parliament in 2013:

Parliaments matter; parliaments must continue to matter. Centuries of effort have been invested by European citizens in securing the vote. It is to parliament that citizens look for accountability, for strategic alternatives. If national parliaments, if the European Parliament, were to lose the capacity to deliver accountability where else might it be found?

Jürgen Habermas, widely regarded as one of the world's leading intellectuals, addressed the issue of democracy and solidarity in the context of the European crisis in April 2013 in a wide ranging paper. I do not have time to go into it in detail, but he states:

The European Union owes its existence to the efforts of political elites who could count on the passive consent of their more or less indifferent populations as long as the peoples could regard the Union as also being in their economic interests all things considered.

He goes on to say:

What unite the European citizens today are the Eurosceptical mindsets that have become more pronounced in all of the member countries during the crisis... The actual course of the crisis management is pushed and implemented in the first place by the large camp of pragmatic politicians who pursue an incrementalist agenda but lack a comprehensive perspective. They are oriented towards “More Europe” because they want to avoid the far more dramatic and presumably costly alternative of abandoning the euro.

The reason for the result of the Greek election cannot be disputed. With 175% debt-to-GDP ratio, Greece's debt mountain is the highest in the eurozone. It is usually accepted that national debt is unsustainable when it goes above a 120% debt-to-GDP ratio.

In an open letter addressed to German citizens, the new Greek Prime Minister says:

Germany, and in particular the hard-working German workers, have nothing to fear from a Syriza victory. The opposite holds. Our task is not to confront our partners. It is not to secure larger loans or, equivalently, the right to higher deficits. Our target is, rather, the country's stabilisation, balanced budgets and, of course, the end of the grand squeeze of the weaker Greek taxpayers in the context of a loan agreement that is simply unenforceable. We are committed to end "extend and pretend" logic not against German citizens but with a view to the mutual advantages for all Europeans. Our task is to bring about a new European deal within which our people can breathe, create and live in dignity.

It might come as a surprise to many Europeans that many Irish citizens identify with those hopes and expectations. It is not a narrative that has been articulated by our leaders. The message instead has been about the Irish miracle, with decreasing unemployment rates, good rates of growth and healthy export figures. The other side of the story is never part of the message. The level of emigration is a running sore. The real rates of unemployment, when JobBridge, zero hours contracts and underemployment are considered is much higher than the stated figures. The huge housing and hospital crises are a day-to-day reality. The levels of disposable income after all taxes, direct and indirect, are considered, with poor corresponding public services, are never spoken about at European level. We were reminded by Government last week that Ireland contributed €350 million to Greece's €240 billion bailout, which Syriza wants to renegotiate as part of its election promise to put an end to austerity. Much of the rest of that vast bailout came from other sovereigns. The €350 million is a very significant amount of money, which could be used productively addressing some of the issues I have just referred to. What I find objectionable is that this is put forward as a reason not to support a European debt conference. Just before Christmas - there was not a blink at this - the Governor of the Irish Central Bank extinguished, destroyed or burnt - whatever terminology one wants to use - €500 million on 23 December in the first part of the €28.46 billion that is now part of our sovereign debt and was formerly the private debts of Anglo Irish Bank and Irish Nationwide Building Society. The schedule for extinguishing the balance will be €500 million in 2015, 2016, 2017 and 2018. That will rise to €1 billion in 2019, 2020, 2021, 2022 and 2023. It will double again to €2 billion in 2024 and will continue to be paid at that rate until all the bonds are extinguished. The €350 million pales into insignificance when compared to the Anglo bonds.

Some 41% of the entire European Banking collapse was shouldered by Ireland, a country that makes up just 1% of the European population. There was significant pressure from the European institutions not to let a European bank fail, but there was no solidarity when it came to picking up the tab. All we got was a pat on the head. It is interesting that Fintan O'Toole wrote in an article today:

It comes down to this question: how much does it cost to service the debt? Who, in other words, gets the best deal from its international lenders, good Ireland or bad Greece? There's no contest. Last year, Greece paid €8 billion to service debts of €315 billion. Last year, too, Ireland paid €7.5 billion to service debts of €214 billion. So it cost us almost as much to service €100 billion less.

Ireland should be seeking a write-off of these debts in the context of the quantitative easing initiative the ECB has just embarked on.

The Spanish election is due later in the year, and with unemployment running at around 25%, much of it youth unemployment, it is hardly surprising that the anti-austerity Podemos looks like emulating the Syriza victory in Greece. A quarter of the population feels they have nothing to lose. It is not just those in indebted countries who are seeking other approaches. German debt campaigner Jürgen Kaiser concludes in his June 2013 comparative analysis of today's crisis and the post-war London Debt Agreement that "few sovereign debt restructurings have so clearly marked the transition from a state of critical indebtedness to a situation where debt is no longer an obstacle to economic and social development." Key elements of that agreement were that creditors and debtors negotiated as equals; it was comprehensive in the sense that it included almost all public and private pre- and post-war German debts; and debt service was to be financed exclusively from current income, without taking recourse to reserves or assuming new debts order to pay off the existing obligations.

Disputes about the interpretation of the agreement were to be solved, as a matter of principle, through consultation or an arbitration process, rather than unilateral decisions by creditors.

Germany's outstanding debts from the 1920s and 1930s, which were largely devolved to the new West German Government, were estimated to equate to 300% of the country's GDP in 1938. Uniquely in western Europe in this period, Germany obtained the benefit of generous debt forgiveness as more than half of its foreign debt was written off and easier repayment terms were agreed for the balance. Some of this debt was repaid only recently. What occurred in 1953, through the London debt agreement, was an extraordinary act of solidarity in much more difficult circumstances than those that obtain today. It was an act that laid the path to the construction of the European Union and enabled the reunification of Germany. The massive write-down of debt did not inhibit Germany from becoming the powerhouse of Europe.

In 2012, the Taoiseach famously stated:

We will not have the name "defaulter" written on our foreheads... We have never looked for a debt write-down.

This Government should reflect on this statement. We need to become allies rather than adversaries of the Greeks in their call for a debt conference.

In his 2013 lecture, Professor Jürgen Habermas, who is German, concluded:

If one wants to preserve the monetary union, it is no longer enough, given the structural imbalances between the national economies, to provide loans to over-indebted states so that each should improve its competitiveness by its own efforts. What is required is solidarity instead, a co-operative effort from a shared political perspective to promote growth and competitiveness in the eurozone as a whole.

Such an effort would require Germany and several other countries to accept short and medium-term negative redistribution effects in its own longer term self-interest.

Just last week, the Governor of the Bank of England, Mark Carney, attacked the strategy of austerity in the eurozone, pointing to its unemployment rate of 11.5%, which is more than double that of the United Kingdom. At the same time, the eurozone's fiscal deficit is only half the size of that of the UK. Mr. Carney also warned that persistent economic weakness damages the extent to which economies can recover. Debate on this issue needs to broaden beyond the Oireachtas to include citizens, civil society groups, professionals and a wide range of academics. We all know Governments come and go and we all have an interest in this critical issue.

To return to Professor Habermas, he argues that the German Government holds the key to the fate of the European Union and questions not only whether Germany is in a position to take the initiative but also whether it should have an interest in doing so. Writing in The Guardian on 31 January, the former German Foreign Minister, Joschka Fischer, wrote:

Not long ago, German politicians confidently declared that the euro crisis was over; Germany and the European Union, they believed, had weathered the storm. Today, we know that this was just another mistake in the continuing crisis... Merkel is underestimating the options at her disposal. She could do much more, if only she trusted herself.

We need to encourage the German Chancellor to trust herself.

If we look to our future, we can argue back and forth about whether our private and public debts are sustainable. The Government, in its amendment, declares that they are sustainable. They are only sustainable if we accept poor public services relative to the taxes that are paid or a high proportion of citizens, including children, continuing to live in poverty. They are only sustainable if we accept that they limit our ability to deliver fiscal expansion in key areas such as establishing a 21st century water infrastructure or providing a housing programme that tackles the housing crisis in a manner that normalises the housing market and moves away from the boom and bust construction profile that we have had over the years. Delivering broadband to every home and business in the country requires actual delivery, rather than announcements. We must invest in the very thing that will sustain us into the future, namely, our people, by spending on education, from preschool to university level. Not only must we create the conditions that will allow the country to thrive, we must stop and reverse emigration if we are to reduce the ratio of dependency in the population, to provide quality public services and maintain reasonable levels of disposable income.

Speaking on the current crisis, former European Commission President, Jacques Delors, stated, "Europe does not just need firefighters; it needs architects too." We need to do something radically different because we have reached a critical point. There is a new dynamic at work in Europe, one which is driven by citizens and of which we will see more. We cannot afford to lose momentum. This opportunity that must be seized. The proposal for a European debt conference is a hopeful sign and one that needs to become a hopeful reality.

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