Éamon Ó Cuív (Galway West, Fianna Fail) | Oireachtas source

I am pleased to have an opportunity to speak on the motion. I congratulate the proposers of the motion on giving us the opportunity to debate it. One of the interesting statements this evening was the admission by the Minister for Finance, Deputy Noonan, that the bank debt costs us €800 million of the €8 billion interest we paid last year. There has been a gross exaggeration of the cost of the bank debt relative to the budget deficit. This does not make the bank debt fair. It was always the intention that, when we reached calmer waters, we would seek to redress the unfairness of how we were saddled with the bank debt. I was a member of the then Government, and we faced two crises, one in 2008 and a very acute one in 2010. In 2008, we implemented the bank guarantee to prevent a run on the banks and avoid a situation in which the banks would not have been able to refund depositors. Be it right or wrong, at the time it was felt that to try to separate the different types of investments in banks would precipitate the very crisis we were trying to avoid. There were large deposits in Irish banks, including €50 billion in Anglo Irish Bank, approximately 40% of which comprised Irish deposits.

In 2010, due to international crises, bond prices increased across Europe, including Ireland. Money started flowing out of the Irish banks and we had to rely on temporary liquidity. The prudent thing was to try to stabilise the situation and avoid a crisis. Does anybody believe low interest rates across Europe, including in Greece, are the function of each individual economy? Are they, rather, a function of the stability of the European mechanism and the euro? When people were taking the punts with their money, it was a risk. I have never thought it was fair for a person who lends money to a second party, who then lends it to a third party, to expect to get it all back. I do not refer to ordinary depositors who act in good faith and whom we should protect as a national and European community. I refer to the bankers who loaned the money in the banking system. At the time, Europe insisted that the first party be paid back. There should have been burden sharing.

Like Deputy Michael McGrath, who put it very eloquently, at the time of the fiscal compact, I thought the Taoiseach was getting a deal on it and that there would be recognition that the Irish people should not have had to shoulder the burden because many parties were involved. Nothing happened, and the Greek Government had more influence on any extension of the debt, arrangements or reductions in interest than the Irish Government. Without supporting Greece, the Irish Government piggybacked on the eyeballing the Greek Government did. I applaud the motion. Any significant writedown or other financial mechanism - I am not fussy about the mechanism as long as it reduces the burden on the Irish people – which may be arrived at to deal with the Greek situation should not penalise Ireland for taking hard decisions. We should, therefore, support the peripheral countries such as Portugal, Ireland, Italy, Greece, Spain and Cyprus in saying the way the centre treated the periphery was unfair on two counts: the uncontrolled flow of capital out during the good times and the demand for all the money back in the bad times.

I was astounded when I read the Government’s amendment to the motion, which seems to state we are above all this, we do not want our fair deal anymore, we can paddle our own canoe and will not stand with the other peripheral economies, particularly Greece in its time of need. It seems to suggest we are not going to demand the fair play the Taoiseach promised us in 2012. It is difficult to understand the rationale behind it because no other country in the European Union would be so soft about its interests. The German Chancellor, Angela Merkel, is clear about defending her country's interests. Meanwhile, the Irish Government seems to suffer from an eternal need to be the good guy in the class, not to kick up any trouble or demand anything in any negotiation. It is not good enough. We should call for the debt conference and stand shoulder to shoulder to say the way the crisis was dealt with from the beginning was not equitable.

It was easy for those outside the system to come up with handy answers and say let Anglo Irish Bank go bust, but no one told us what to do about all of the depositors. Should we have let depositors with deposits worth €20 billion go bust? In the nationalisation the only ones who did not get their money back were the investors in the bank. We certainly were not bailing them out, or any other bank.

The Minister needs a backbone. He needs to go to Brussels to say there is unfinished busines, that the Irish people are very annoyed that they took the full hit and are now being punished by the Commission's logic in getting their house in order and that he and the Irish people want to share in any new deal done for Greece.

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