Wednesday, 6 April 2011
Bank Bailout and EU-IMF Arrangement: Motion (Resumed)
recognises that:— the bank bailout and the EU-IMF loan package arrangement imposes a hugely onerous debt burden on Ireland which will have profound consequences on the Irish economy and Irish society for years to come;— there is widespread and justified outrage felt among very wide layers of Irish society that ordinary citizens, and most particularly those on low and middle incomes and the vulnerable in our society, are being forced to pay for the speculation and gambling of bankers, bondholders and developers by way of swingeing cutbacks and austerity;— a wide body of civic, political and expert opinion, both nationally and internationally, believes that the debt burden arising from the bank bailout, the EU-IMF package, and the conditions attached to the package in the memorandum of understanding, are economically unsustainable or potentially will become so, and will damage rather than enhance our country's prospects for future economic growth;— EU treaties signed by this country, with arguably far less grave or immediate effects for our economy and society than the EU-IMF package, have been put to referendum;— faced with a similar crisis to that in this country, the people of Iceland demanded and won the right to a referendum on a proposed IMF loan package;— recent developments in Portugal confirm that the financial and economic crisis now facing Ireland is very much a Europe-wide problem and that wide layers of society in other European countries are questioning the current EU approach to dealing with the banking and financial crisis;— the Pact for the Euro agreed at the recently held EU Council summit and the strengthening of EU powers for monitoring the economic and fiscal policies of member states, particularly those involved in the European Stability Mechanism (ESM) and the proposed European Financial Stability Mechanism (EFSM), have potentially profound effects on the ability of EU member states and their citizens to decide their own economic policies; and— there is an overwhelming democratic case for putting the continued bank bail-out and an agreement with such profound implications for the economic and social future of our country to a referendum of the people; and resolves to call a national referendum providing the Irish people the opportunity to accept or reject the bank bailout and the EU-IMF loan package arrangement.
The Fine Gael-Labour coalition Government sought and received a mandate from the people on 25 February last. That mandate was based on a whole series of electoral promises. It was meant to be a mandate based on commitment and backbone. They said it was a mandate to renegotiate the EU-IMF deal, and impose burden-sharing on gamblers and speculators, as well as reducing the crippling interest rate on money borrowed. However, that mandate has been spectacularly breached by the Government's successive and startling U-turns.
The results of the recent election were a clear indication that the people had rejected the failed policies of the former Fianna Fáil-Green Party coalition and were demanding change. The time is long past for this new Government to grow the backbone it promised. Acceding to the call in this motion for a referendum on the EU-IMF deal is surely one of the best ways to do so.
The amendment to this motion seeks to welcome the Government's restatement of its commitment to protect those whose funds are guaranteed by the State, but senior bondholders are in no way supporting the State. Nor does protecting and sheltering them support our economy. In fact, senior bondholders are leeches on the economy. Continuing to pay them will only serve to guarantee them a licence to suck the very lifeblood from this economy. The Irish people did not take pay and public service cuts or tax increases so that private investors could be rewarded.
The Government's attempts at restructuring the banking sector are weak to the point of being anaemic. There was no ECB deal, no senior bondholder deal and no interest rate deal. The opportunity to impose haircuts on bondholders arrived with last Thursday's stress tests, when losses and equity requirements were crystallized on the balance sheets. Our Government failed to grasp the nettle, however. It held on to the forlorn hope that by maintaining credits intact, creditors would rush back in with new money. The Government does not appear to have investigated the history of debt crises, which in fact is quite simple. Whenever one has a big cloud of debt, no new creditor will come back in any substantial way. Nevertheless, the Government clings to the hope that the latest bailout will create capital reserves so high that financial markets will begin to lend to it again, thus weaning our banks away from the ECB and getting the lifeblood flowing back into our economy.
Will capital comfort be enough to bring depositors and bond investors back? The fact that "we will have very well capitalised banks", to coin a phrase, is far outweighed by their loss of credibility. Simply diagnosing potential damage to the banks' balance sheets will not automatically reduce uncertainty. Similarly, the banks' super-capitalisation will eventually be eaten away by the alarming increase in home-owner mortgage defaults.
It is a fiction to suggest the effects of these bailouts will be either a properly functioning banking system or one that will make a positive contribution to economic growth, but our bailouts were never designed for either purpose. Quite simply, they were designed to make whole those investors who would otherwise have been forced to partake of the rotten fruits of their reckless gambles.
Last week the Minister for Finance, Deputy Noonan, unveiled his new plans for bank restructuring. He revealed that Ireland would have two domestic, universal, full-service banks as the core pillars of the banking system. Bank of Ireland will make up the first pillar, while a merger of AIB and EBS will make up the second. We were also told that the core businesses of these new banks, into which we have pumped and are still pumping vast sums of money, will be focused on serving the needs of retail, commercial and corporate customers residing in Ireland. We are told that this new, restructured banking system is to lend in excess of €30 billion to the economy in the next three years, and credit will supposedly be flowing once more, just like the champagne in the Galway tent a few years ago. With €70 billion of Irish taxpayers' money invested, we can only hope this credit materialises.
We have heard so much lately about stress tests and bank restructuring that the debt burden on the State and on ordinary people has almost been downgraded. At the EU's insistence, peripheral countries are being forced to slash their budget deficits regardless of detrimental consequences for growth. As austerity drags down output, their enormous debts, expected to peak at 160% of GDP for Greece, 125% for Ireland and 100% for Portugal, look ever more unpayable. Bond yields remain stubbornly high, creating a depressing downward spiral of debt that inevitably chokes off growth.
Members of the current Government voted against the calamitous EU-IMF bailout only four months ago, so what has changed so radically to make them renege on their recent promises?
Does the Tánaiste and Minister for Foreign Affairs, Deputy Eamon Gilmore, remember telling the people of this State the following?:
Labour's view is clear. This is a bad deal for Ireland. Because it is a bad deal for Ireland, we will vote against it here and, in the forthcoming election, we will seek a mandate to renegotiate it... Why are European banks being protected from losses in respect of senior bonds, while the Irish taxpayer is carrying the can? Europe made its contribution to the problem and must also make a contribution to the solution. It must do so because until there is a solution to the Irish crisis, there will be no overall solution to the euro crisis.
In support of the motion seeking a referendum on the bailout, I finish by quoting the words of the current Minister for Finance, Deputy Michael Noonan, who, when in Opposition, said of senior bondholders:
The Irish Government and the taxpayer has no liability whatsoever for these debts, but the bailout deal is now forcing them to accept liability because it puts this imposition on them. In the budget, the Minister for Finance reduced social welfare payments, punished the blind, disabled, widows, carers and the unemployed and he taxed the poorest at work, and for what? It was so that the taxpayer can take on liability for debts the country never incurred and arose from private arrangements between private institutions. What a disaster and an obscenity. How can the Government stand over it? How can our European colleagues stand over it?
With those words, the Minister for Finance put more succinctly than anyone else the case for a referendum on this deal.
The contribution from Deputy McDonald is notable in three ways. The first is in regard to what I thought was a somewhat sneering hope that everything the State is clinging to will collapse into chaos so we can then use that as some way of winning an argument. The security and stability of the State is in question - we know that as well as the Deputy. We understand that we have a responsibility to keep our banking system intact and to find a way to regain the sovereignty of the State.
The second way in which the contribution was notable was that at no time during its eight to ten minutes did I hear a single statement regarding what Sinn Féin would do differently. Nowhere did I hear the course of action it would undertake if it ever found itself in a position of authority.
That is a fact. In the eight to ten minute contribution, which I was happy to listen to, nowhere did I hear what Sinn Féin would do differently. As somebody from a party that had the misfortune to spend so long in Opposition, I can tell Sinn Féin that this kind of rhetoric will get it so far but it will not get it to where it needs to be, which is in a position to come up with a credible plan that people want to listen to and believe.
The third notable feature of the contribution concerns the fact, which I acknowledge, that Sinn Féin has made an extraordinarily positive contribution to the State in terms of what it has done in the North and the peace it has played such a powerful role in bringing about. It did that through years of patient, positive, incremental negotiation. However, it is now looking at a Government that is trying to undo three years of the most disastrous banking policy in modern European if not global history, yet Deputy McDonald is disappointed it cannot be done in three and a half weeks, forgetting all of the positive lessons her own party demonstrates. That is the challenge.
To return to my second theme, the question is what would be done differently, which is an issue of deep concern to me and members of the Government. I thought it noteworthy that Deputy McDonald described bondholders as "leeches". Actually, it is bondholders - private investors who buy Government debt - who provide the money that keeps our schools and hospitals open, whether they be in investment funds or pension trusts. A recent study from University College, Cork stated that half of those funds were held by Irish citizens. Are we calling those people leeches?
I wish it was the case we were in a situation where these so-called leeches, a term I reject, were in a position that they wanted to lend money to Ireland. The tragedy of what the Government has inherited is that the international markets would prefer to lend money to Thailand or the Bahamas than to the Republic of Ireland. That is the plight the Government must undo and what we will undo during our term of office.
The reality is that this is a path which will take time as well as clear and hard choices. In the programme that has been announced and in the work that has already been done, we have seen the clear intent and ability of the Government to do this. This Government differs from the last in that it knows the current plan on offer is not working for the State, for its ability to return to the financial markets or for the banks. It also differs from the previous Government in that it knows, given the state of affairs we have inherited, that we cannot get money from anybody else. Therefore, what we have, we must work with and improve, which is what the Government is committed to doing.
What we have already done, and outlined to the House, concerns the subordinated debt that is held by Anglo Irish Bank and Irish Nationwide. The Government has made clear its commitment to work in that regard. We need to find a way of making burden-sharing happen but it needs to happen in a multilateral context. There is €35 billion of senior banking debt, to which Deputy Pearse Doherty referred earlier. Out of that, some €16 billion to €18 billion is unsecured and unguaranteed, and this is where any state would have a chance of making a gain. If we were to attain a haircut in line with what has been achieved in previous situations, there would be a gain of €8 billion. The equation this Government must weigh up is in regard to a once-off saving of €8 billion versus the €70 billion of funding at 1% that is coming in to keep our banks open.
The Government represents ordinary people - those going to schools and hospitals, who need their banks kept open. We know it will take longer than three weeks to make progress on that but we have made a good start.
I support the amendment to the motion. The situation we find ourselves in as a country is unforeseen, and it is the fact it is unforeseen that is one of the biggest problems I have. What does "unforeseen" mean? Does it mean nobody was paying attention and that there were no watchdogs or caretakers in recent years? The dictionary definition of "unforeseen" is unexpected, not predicted, surprising, sudden or accidental. However, this was no accident, and the signs were there if the last Government was looking for them.
However Ireland came to be in such a state, this Government has to deal with the legacy and we must face the resolution together as a country. In an ideal world where there were no risks or consequences, the idea of the proposed referendum might be a good one. Then again, if we lived in ideal world, we probably would not be in the situation we are in today. A motion such as this only serves one purpose, namely, to give the people of Ireland a false sense of hope, which to my mind is a cruel and unusual punishment.
We are but a few weeks after a general election where the Irish people gave the Government the mandate to sort out the economic situation, which is what we are doing. We are committed to a programme of financial support for Ireland but one must remember that the EU-IMF deal is negotiable and, therefore, it can be amended to accommodate the new programme for Government, provided the aggregate fiscal adjustments are respected.
Hypothetically, if this referendum was to take place and the result was to reject the bailout deal, what then? What is the Technical Group's plan after that? Is there a plan? If there is one, I have not heard it, other than in regard to the plan to raise corporation tax, the one tested initiative that brings tens of thousands of foreign investment created jobs to this country to support Irish families. If that is what is on offer, I could not agree to it, and it seems the best on offer here is to jeopardise those jobs.
The reason there has been general acceptance of the EU-IMF deal thus far is because there is no other feasible or workable alternative. From where does the Technical Group propose we get our future funding? While there have been many criticisms of the renegotiation process and many ideas on what we should do immediately, no long-term plans have been proposed. With the EU-IMF deal, we have a plan. It may not be as good as we hoped but it is a workable plan that will see results.
In the history of the State there has never been an ordinary referendum, which is the type of referendum proposed in this motion. While there have been referendums on Lisbon, Nice, divorce and so on, these all went to change elements of the Constitution, the very foundation of our State, whereas this proposal would not.
We said throughout the general election campaign that there would be greater transparency when it came to all matters of Government and we have been truthful with the Irish people. I reject the comments Deputy Adams made yesterday that Fine Gael has done a complete U-turn on its five-point plan. The Government has been working steadily for the people of this country since it was elected and it will continue to do so. Now is not the time for a referendum; now is the time to boost the confidence of Irish businesses and gain European and international trust in doing business in our country. We need to prove Ireland is a stable country in which to set up business.
We have no choice but to honour the commitments made by the previous Government to protect those whose funds are guaranteed by the State in order to move Ireland's growth and development onwards. Since the announcement of the stress test results and the Government's restructuring plans for the banking sector, we have seen a rise in Bank of Ireland shares. This type of confidence has not been seen in Irish banking shares for a very long time. The banking system is a key enabler of economic activity and a return of this type of confidence will assist the Government's jobs strategy success. We will continue on a path towards recovery. We will make the jobs fund a major priority to support employment and encourage sustainable enterprise. In this way we will reach the targets under the EU-IMF programme, thus reducing the pain felt by individual families throughout Ireland. That is our priority. I trust the Government to fulfil the promises my party made during the election campaign. I commend the amendment to the motion to the House.
As this is my first opportunity to speak in the House, I take the opportunity to express my gratitude to the electors of County Clare who have bestowed upon me such an honour. I do so cognisant of those who have represented County Clare before me, both within the Labour Party and without, since the foundation of the State and before.
This is not the time to hold a referendum, as proposed in the motion. It is tempting to imagine that in one heroic act we could fly clear of the entrapment that is the hugely onerous debt burden which the blanket bank guarantee and the resultant bailout deal have imposed on the State. However, the blanket bank guarantee, which it must be stressed was exactly such a unilateral action as that proposed in the Technical Group's motion, was not the act of a despotic foreign political institution, rather it was the act of the democratically elected Government of this sovereign state. The Government which I support is now tasked with dealing with the resultant fiscal and economic crisis in conjunction with our European partners. I support the proposed amendment to the motion.
Were a referendum to be held and were the people to reject the bank bailout, which I do not accept they would, it would change nothing. The difference between what the State takes in and what we spend on day-to-day expenditure items is €21 billion. We cannot as yet raise these funds in the markets, although the indicators are good for the future. As such, how do the proposers of the motion suggest we continue to pay gardaí, teachers and nurses? How do they propose that we raise the funds to maintain the weakest in our society in the dignity their humanity demands? They cannot say. As the banking system is reliant on short-term funding to the tune of €120 billion from the ECB to continue to function, how do they propose to ensure ATMs across the State will continue to function? They cannot answer. The reality of what is envisaged in the motion is a morning when ATMs will not function and social welfare hatches remain closed, a morning when chaos will reign and the weakest and most vulnerable become collateral damage in the proposers' ideological parlour game. The reality is that the State's debts will persist unless and until they are dealt with multilaterally. It is for this reason that the Tánaiste announced a diplomatic offensive last week . To the members of the Technical Group who proposed the motion I say they will have a referendum, one which will profoundly impact on the course not only of the State but of the entire European Union. However, such a referendum will take place only when there is something meaningful to refer to the people.
The current European bailout mechanisms are built on makeshift legal foundations. The Irish bailout deal, which we all found repugnant but which those of us on this side of the House regard as unavoidable for the present in the circumstances of our inheritance from 14 years of misgovernment by Fianna Fáil, requires taxpayers to pay interest and capital on a huge loan to enable us to fund the State. This loan comes from European taxpayers who will carry the can if we default.
A domestic legal challenge to German participation in the European Financial Stability Mechanism and the European Financial Stability Fund was brought on the basis that the bailout mechanism had no legal basis in the EU treaties and, in fac, contravened treaty provisions. The Treaty on the Functioning of the European Union excludes the Community and any member state from liability for and assumption of the commitments of bodies governed by public law or public undertakings of another member state. The only basis for the current mechanism is that financial assistance may be granted, under certain conditions, to a member state in difficulties or seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control. A decision has yet to be handed down on that challenge.
Concern that the German Federal Constitutional Court could rule against German participation in the bailout mechanisms in the absence of some guarantee against future moral hazard led to Chancellor Merkel's demand at the EU summit at the end of October last year that future bailout mechanisms, to replace the current one, force bondholders to accept an extension of debt maturities, suspension of interest payments and even a write-down of that debt. On 11 November last she reiterated her call for private investors to share the burden of adjustments in bailouts, piling pressure on Ireland as investors sold Irish bonds on fears of default. The French Finance Minister, Christine Lagarde, supported Chancellor Merkel's position, saying investors must share the cost of sovereign debt restructurings. By then Ireland's already precarious fate had been sealed, leading to the announcement of a loan of €85 billion on 21 November.
It has been suggested in European quarters that the permanent bailout mechanism and its form, in particular whether it incorporates burden sharing, may require only minor changes to the European Union treaties, which could be approved through an expedited process that would avoid a full constitutional convention. It is undeniable that a bailout mechanism widens the scope of Union powers beyond the general framework created by the provisions of the treaties as a whole and, in particular, those that define the tasks and the activities of the Union. Therefore, it will require a constitutional convention and subsequent ratification by each member state according to its national legal framework, which in Ireland means a referendum. The form of the permanent bailout mechanism will determine whether the taxpayers of member states - whether this state or another - will be required to guarantee the gambling debts of renegade banks, with taxpayers throughout the European Union the ultimate guarantors of these debts.
We must ensure such a profound change to the European Union mechanism is not made. I am confident we will find ready allies in this task across the European Union. That is the diplomatic battle with which the State must now engage and we must prevail. To do so we must demonstrate that this is the sovereign, independent state, the accession of which to the European Union was negotiated by a previous representative of County Clare in this House, not merely a bunch of bed-sit revolutionaries as the proposers of the motion would have us portrayed. I remind Members that it was another representative of County Clare, Daniel O'Connell, MP, who said "all ameliorations and improvements in political institutions can be obtained by persevering in a perfectly peaceable and legal course."
I congratulate the Leas-Cheann Comhairle on his appointment. It is a great honour for him. I am glad he is not in my constituency but at a safe remove in the next one.
I am pleased that the rostering seems to be scheduling to me to speak after Deputy McDonald on every occasion. In referring to the banking restructuring plan as outlined by the Government last week she again stated that it was the Government's proposal that €24 billion of taxpayers' money be put into the banking system. That is not the case. What happened last week was that it was indicated how much capital was required by the existing system. The external experts who have examined it have concluded that €24 billion is required, in an adverse scenario, in order to bring certainty and stability to the banking institutions and generate investor confidence. The Government has committed to burden sharing within that figure of €24 billion, that other sources of income from the sale of assets will be sought and that there are ongoing negotiations with the European Union on these issues.
It is necessary in this debate to go back to the introduction of the blanket bank guarantee which was supported by every party in this House at the time, with the exception of the Labour Party. As has been stated, this bound the State's finances at the hip to those of the banks and has left us in a position in which Ireland's sovereign debt is linked to private debt and developers' gambling debts. All Members are familiar with what the country is stuck. However, when the State signed the EU-IMF deal last November or December, it placed a straitjacket on the actions open to future Governments and future Members of this Parliament. The deal not only was signed by a sovereign government, but was ratified by a sovereign parliament in a subsequent Dáil vote, which means that we have entered into a legally binding contract. Unfortunately for Ireland, at that time it was unable to fund itself otherwise. Ireland no longer has credibility in the international markets as people do not believe that we can repay and, consequently, our only source of income is from the EU and IMF.
This motion seeks a referendum on the deal and while it is not for me to dictate the wording used, I would have preferred reference to points of improvement or change or on negotiating positions, rather than simply to a referendum request, which gives rise to a number of issues. First, a referendum would give rise to questions on whether it would be legally binding and were we to so do, whether we could be dragged through the international and European courts for reneging on a deal to which we have signed up in good faith and from which we are benefiting and receiving funds. As to whether it would be possible to breach the deal on foot of the Parliament and the Government having signed up to it, I am unsure whether a subsequent referendum would have the legal standing to stand up to such a challenge.
Another point reverts to the role of the Parliament. Three parties in this Dáil, namely, Fianna Fáil, Fine Gael and Labour, conducted the election on the basis of the EU-IMF deal in one shape or other. In the case of the Labour Party, it was to seek a mandate from the people to renegotiate the deal. I understand the position was similar in the case of the Fine Gael Party and that the Fianna Fáil Party stood over it without any changes. As for referendums, I refer to the previous European referendums and question whether the scope for debate on such matters would be better channelled through the parliamentary process, in which they could be given due consideration and discussion and could go through committees and so on. Alternatively, I question in many respects whether this issue is capable of being debated in the kind of media environment in which we find ourselves, in which snippets and three-minute shots across the airwaves are the manner in which national debates take place. However, that is an issue for another day.
While I do not suggest that the debate in this House over the past two weeks has been wrong, because it is right for this House to debate banking strategy, I believe Members are taking their eyes a little off the other major and important issue that must be discussed, namely, the economy. In many ways, the economy is a very different matter from the banks. Were the deficit we face of €20 billion per year to continue without being addressed over the next four to five years, it would quickly amount to borrowings of €100 billion, which would be a far greater amount than that which thus far has been pledged towards the banking system. This is the subject on which Members must place their real emphasis in the next number of years. The Government has many ambitious plans and I acknowledge that the jobs budget will be introduced within the next month or two to start that ball rolling.
While there certainly is need for renegotiation of the deal, it was evident that this is coming at the conclusion of the last European Council when it was asked and agreed to that the issue for Ireland would be postponed until the end of June. No money has gone into the banks thus far, the amount of capital allocations is also for decision at the end of June and negotiations in the meantime are under way. To put up people's hands or to state we have surrendered, that it is all over and that the current Government is the same as its predecessor before any negotiations have concluded, is both to hamper the Government's negotiating efforts and to portray a fiction and something that is not exactly accurate. I will conclude on that point and again congratulate the Leas-Cheann Comhairle on his new position.
This motion calls for the bank bailout deal with the IMF-EU to be put to the people. It is as simple as that. The bailout that has been debated in this House over the past few days is in the form of a further capitalisation of the zombie banks. I refer to Deputy Nolan's contribution, in which he stated that it was not €24 billion of taxpayers' money that was going into the zombie banks. However, it is taxpayers' money, as it is coming from the National Pensions Reserve Fund, to which taxpayers have contributed over recent years. Moreover, it is coming from €7 billion that the former Minister, Deputy Brian Lenihan, placed on deposit with the banks when he refused to undertake the recapitalisation before the election and which also came from the National Pensions Reserve Fund. Furthermore, the money that will make up the difference and which may have to be borrowed becomes taxpayers' money when the taxpayers borrow it. It becomes taxpayers' money that must be repaid at 5.8% interest to the EU and the IMF.
The Government hopes this will be the final recapitalisation needed for the banks and last night, Deputy Mitchell mentioned that she had hope for this recapitalisation. Hope is all that one is left with because while one lives in hope and that this will be the end, I do not believe this will be the case. Earlier today, the Minister for Finance stated that the recapitalisation was a huge success because Bank of Ireland shares have jumped in the markets on foot of the news. The share price has jumped because the speculators know the Government will do everything in its power to protect them and their investment and that they can make short-term gains on the same markets that have frozen Ireland out from sovereign borrowing.
Last week, Members debated the universal social charge and everyone is aware of the harm it has done to working people. The next three years will see more austerity with €3 billion to be taken out of the real economy each year to meet the terms of the bailout deal. This will be to bail out French, German and English banks that fuelled the madness of the last ten years while the Fianna Fáil Party cheered it on from the sidelines and added fuel to the fire with its reckless policies. These policies in respect of the bailout now are being continued by the Government. The latter has taken Fianna Fáil's clothes, which I must say fit them well. The austerity Ireland is facing will see small farmers, the unemployed, pensioners, low and middle-income earners, as well as children and the sick, being punished by the Government. The effects of this austerity package will be the closure of small schools and hospital wards and the removal of income supports for farmers, working families and the unemployed. This will lead to further stagnation of the domestic economy. This week has revealed a fall in VAT and income tax receipts and the increase to €1.4 billion in the first quarter of this year of interest payments on the national debt. This spiral of reduced tax receipts and further austerity will push Ireland further over the precipice into the restructuring the Government states it cannot countenance.
However, an alternative has never really been discussed. A referendum would allow such a discussion to take place, which might see the development of surprising alternatives. Such a discussion could put the people first and not the banks and spectators. Although the Minister of State, Deputy Brian Hayes, last night stated that he sought an honest debate on this issue, he did not bother to address a substantive issue in the motion, namely, calling for the Irish people to have their democratic rights confirmed and the question put to them on the EU-IMF bailout. Instead, he moved an amendment that bears no resemblance to the motion. I must ask the Ceann Comhairle for a ruling in respect of Standing Order 53, which states "Every amendment must be relevant to the motion to which it is proposed". I believe this amendment has no relevance to the motion that was placed on the Order Paper by the Technical Group.
One has been treated to speaker after speaker on the Government side waffling on about the bank bailout itself, while clapping themselves on the back with regard to how they now have sorted it all out. While time surely will tell, of greater interest is the Government's reluctance to debate the issue of the merits or otherwise of putting a question to the people and letting them decide in a truly democratic way what they wish to do about a bailout, thereby gaining a definite mandate from the people to negotiate a new way that puts ordinary working people and families at the heart of the solution, not the banks and the class that have put us into the hands of the IMF and the EU.
Speaking on RTE's "The Late Debate" last night, Deputy Keaveney gave the game away when he stated the reason the Government would not hold a referendum was that it knew the answer, namely, that people would reject the bailout out of hand. It strikes me that, although the Government has a significant majority, it must table an amended motion that praises itself and the steps it has taken to resolve the issue.
I will just use 30 seconds more. The amendment tells me the Government knows it is wrong, does not have confidence in its actions and is afraid of its people. After only a month in office, it has relinquished its mandate and rejected the people who voted it in by taking on Fianna Fáil's clothes.
Like the organisation I represent, the Workers and Unemployed Action Group South Tipperary, I am committed to an alternative Ireland that unites working people, whether public or private sector or Irish or migrant, with the unemployed, social welfare recipients, pensioners and students in a struggle to change society. I favour an end to the bailout of banks and developers and a refusal to pay the debts of private banks to international speculators and finance houses. I am appalled that the people have been led into subordination to Britain, Germany and France and to their bankers and speculators through the EU-IMF deal. I am appalled at the consequential loss of sovereignty and independence. I am also appalled at the payment of a new cíos dubh, a new rack rent, to international speculators and bankers.
Allowing private banks to borrow €90 billion abroad between 2003 and 2007 was an act of treachery by the former Government and the Irish establishment generally. The blanket guarantee of all bank debts by the former Government was the greatest act of national treachery since the Act of Union.
The guarantee to large investors and bondholders must be revoked and small individual investors in credit unions must be compensated. There must be a default on repayments to international finance houses. The payment of the cíos dubh - €5 billion this year and €9 billion by 2014 as a minimum - is unsustainable and will devastate families, the economy and the country if it continues. However, the default is not a magic bullet that will solve people's problems. Any decision to default must include a clear statement of alternative policies. The electorate would be entitled to such clear information in any referendum.
The super rich, including tax exiles, must be made to show a little patriotism. Other than Luxembourg, Ireland has the highest income per head in Europe, but it has one of the worst distributions of wealth in the world. The problem is that most of the wealth is in the hands of a tiny super rich minority. The top 6% of super rich people still have €250 billion in assets, approximately €85 billion of which was irresponsibly borrowed abroad by banks and lashed out, effectively unsecured, to developers and others. An emergency, one-off 20% levy on these assets would recover €50 billion and the super rich would still be super rich.
There is a national economic and social emergency. The economic crisis is resulting in an unprecedented onslaught on living standards, spiralling mass unemployment and a dramatic rise in poverty. Meanwhile, billions of euro are being taken from working people and given to bankers, developers and international speculators. I reject the so-called solutions to the economic crisis based on slashing public expenditure, welfare payments and workers' pay and pensions. No just or sustainable solution can be based solely on the market. Instead, I favour democratic and public control over resources so social need is prioritised over profit.
There are only two solutions to the national economic and social emergency facing the country. I favour defaulting and, importantly, making the super rich pay their fair share, which they were not made to do under the previous Government and are not being made to do under this Government. There must also be a derogation from any regulation protecting those taking money out of the country. To a large extent, the rich have fled the country with billions of euro since last June. The second solution is an extreme right-wing solution, that is, to default and make the poor and middle income earners pay while the super rich and tax exiles escape with the loot.
I will be voting against the Government amendment, which encapsulates a continuation of the disastrous Fianna Fáil-Green Party policy. It is a mistake to become allied with extreme right-wing forces. It creates confusion and impedes the political reorganisation of the people, who alone can impose a solution in their interest.
The one big question I keep asking myself is what are we not being told. As citizens of this State, we have an entitlement to know what is being done on our behalf. On Monday, the television news highlighted the Exchequer returns, showing a deficit of €7 billion for this quarter, €3 billion of which was accounted for by a transfer to Anglo Irish Bank and Irish Nationwide Building Society, INBS, the first of ten instalments due to be transferred in March of each year. We also saw the impact of the €6 billion adjustment on the pockets of citizens following the December budget. The universal social charge, USC, and adjustments in income taxes have put a large hole in the pockets of ordinary people, yet this was only the first instalment of a set of austerity measures set to continue until 2015 intended to deal with just the gap in day-to-day funding.
We are beginning to see the impact on services. For example, it appears from anecdotal evidence that those making claims for carer's allowance are routinely being turned down. A large backlog of appeals is building up, the outcomes of which it will be impossible to capture data on for some months. In the same news package, we were told that our hospitals will begin enforcing ward closures. Children with special needs, including those with profound disabilities in, for example, St. Raphael's special school in Celbridge, are already paying the price.
The impact follows a €6 billion adjustment, but the known liability of the banks is €70 billion, some 11.5 times the adjustment sum and still counting. In addition to supporting a growing army of unemployed people, almost half of whom are unfortunately long-term unemployed, we will have a significant interest liability in 2012. Is it credible that a small country of just 4.5 million people can sustain even the interest charges on this debt, never mind repaying the principal? Those who claim it is just about manageable should knock on a few doors and tell that to the people on whose behalf they are making the claim, people who are struggling to repay their mortgages and pay their bills.
The main reason I am seeking the referendum on the issue of bailing out the banks is my belief that the citizens have an entitlement to know the liability they are taking on. They are also entitled to know the impact the debt will have. The issue of debt sustainability has prompted commentators, both in Ireland and within the political and financial worlds, to state in recent days that the debt cannot be repaid in full. Many commentators, who are not left-wingers just in case the House believes I am being selective, have predicted that this injection of cash will push us towards the inevitable sovereign default. According to Mr. Jim Power, for example, we currently have a national debt of €94.5 billion and it is likely we will have to borrow another €50 billion to keep the country running. This brings our national debt to €145 billion and if the €70 billion to bail out banks is superimposed, our sovereign debt comes to €220 billion. According to Mr. Power, it is not possible for the Irish economy to carry that amount of debt. That is a fact which primary school pupils could work out, which is why I cannot understand the reason this Government is embarking down this disastrous road. It is a continuation of the last Government's actions. I am reminded of defining madness as somebody repeating an act again and again while expecting a different result.
The general election was not a referendum on the handling of the bank debt despite comments to this effect from several people. The Minister for Transport, Deputy Varadkar, stated that not one more cent would be given to banks and there were also promises on how senior bondholders would be treated; it was either Labour's way or Frankfurt's way. People were told one thing during the election but we are seeing something entirely different now.
We have been told that if we are good Europeans and honour bank debt, by 2013 we will have saved the euro. However, we will have made a pauper of the nation just as we find the European Union insisting that burden sharing be a requirement. That will only happen in the future and we will have copper-fastened bank debt to sovereign debt in an act that will not be reversible. The question has been asked of where we will get money to pay gardaí, teachers, nurses, pensioners, carers and those on disability if we default. The same question must be asked of those who are putting us on a path where default on bank debt is possible but where sovereign debt default will be inevitable. The question will be asked, although perhaps not today.
The Minister for Finance is a smart man and there are plenty of smart people on the Government side. The question I ask repeatedly regards what we are not being told.
Ba mhaith liom comhghairdeas a dhéanamh leis an Leas-Cheann Comhairle. The deals done with the banks, EU and IMF are every day undermining our chances of economic recovery. It appears that Ireland's EU partners intend to stand back and watch Ireland get pulled into an unsustainable debt while bondholders, especially senior bondholders, are protected. The inevitable consequence will see Ireland being forced to default and in the process damaging the entire EU and undermining the euro. This is a real possibility despite us taking action to do the opposite, or so we are told.
A recent election and new Government is of little consequence, as Ireland is now effectively being run by the EU and IMF. Economists and bankers in Washington, Brussels and Frankfurt have a prime interest of ensuring the ECB and holders of Irish bank bonds are fully repaid, in effect, by Irish taxpayers and ordinary households. Figures have been trotted out by different speakers in the debate tonight and last night detailing how much each family will be expected to pay.
The Irish people must be allowed to exercise their sovereignty in a matter that will tie up society and our economy for generations to come. The Icelandic people exercised a workable democracy with their bailout and there is no reason the Irish people cannot be provided with the same opportunity. Different commentators have outlined what happened in Iceland; what the British and the Danes said could not happen came about and when people got the chance, they overwhelmingly rejected austerity measures. The bankers and lenders, mainly from Britain, had to sit up and listen. There is always room for another position, as we know from any walk of life.
Fine Gael and Labour received an overwhelming mandate in the recent general election and their members are now telling us that was essentially the referendum for which we are now calling. I voted against this so-called bailout - or "clean-out" as I called it at the time - and against my own party when the process was approved. We can remember what some of the Fine Gael and Labour speakers said at the time. Labour promised to burn senior bondholders and told the public its policies would be very different. All that is different now is that the Opposition has moved to the Government benches and what is left of Fianna Fáil has moved to the Opposition benches with the other Deputies. Such actions have let down the public and have led to a further undermining of confidence in democracy.
Deputy Gilmore, who is now Tánaiste, indicated when he voted against the bailout in the Chamber that when part of the Government his party would reverse the process. The Minister for Finance, Deputy Noonan, described the bailout as a disaster and obscenity when in Opposition but how quickly he and others have forgotten their words of condemnation. I know they are faced with difficulties and I voted for the election of Deputy Kenny as Taoiseach and the appointment of Ministers. I wish them well but I have made it known that I will vote against them where their proposals are not in the national interest or living up to election promises. That is what I will do tonight in calling for this referendum.
There is already a lack of business in shops, restaurants, shopping arcades and farms in the country. Business is not happening because of a lack of credit, which is a real factor of austerity measures and cutbacks in recent budgets. To foist this on ordinary taxpayers is totally unacceptable and unworkable, it will only get us into a deeper hole. It is unthinkable that a change in the Government and the seating arrangements in the Dáil can happen and yet we proceed with the status quo. I know the public did not vote for this with the large numbers who turned out in the election.
I call on the Government to pay heed to the motion and listen to the honest propositions being put forward. The next election always starts the day after the last one so the Government will have to face the public and explain the change in the position held so vehemently in radio and chat shows and across various media throughout the election campaign and months before. Opposition parties castigated the previous Government, including Deputy Lenihan, and voted against the bailout but now they seem to think they can revert to the policy.
Such a transfer of public money to cover private losses has never taken place anywhere in the world. I cannot understand why it is happening here. I am demanding that we face up to the ECB and Chancellor Merkel. We must tell them we cannot continue with the process and it is not in our interest. It is not in their interest either as this will only get us deeper in a mire. We will have to default, a word which is an anathema to me, as it has been all my life, when I have been in business for 30-odd years. These people are supposed to be our colleagues in Europe and through different treaties we have achieved different rights and commitments. These must be followed up as there will be other European treaties in future. The people will reject these because with friends like these, who needs enemies?
Deputy Regina Doherty argued that Fine Gael had not done a U-turn on the five-point plan. There should be credit where it is due and part of the plan relates how Fine Gael was the first party to argue that it was unfair for the Irish people to shoulder all the losses of our banks, and that it was right that investors who lent recklessly to the banks should share the pain. Perhaps I do not understand the term correctly but it seems like a U-turn.
It is hard to credit that Fine Gael and Labour believe they have a mandate from the people for their version of the bank bailout, which is identical to that of Fianna Fáil.
From the start of the debate we heard from many Members of both parties that burden sharing was vital and really important. Deputy Nolan told us we were jumping the gun, that there might yet be burden sharing. Last Friday, when the Minister for Finance, Deputy Noonan, was asked on RTE radio whether burden sharing had been asked for he stated his team had asked the ECB for it but the bank said it was not a runner. I take it, therefore, that right now it is not a runner.
We were told the deal Fianna Fáil came up with was not workable. The Tánaiste, Deputy Gilmore, insisted it was not workable. From their words we know most top economists believe it is not practical. God knows, we have a good idea it is not fair. Professor Honohan, the Governor of the Central Bank, has been very open in telling us that on the issue of fairness the deal does not rate very highly. It is hard to credit that the most vulnerable in our society will be hung out to dry in order to satisfy the problems of the financial institutions.
The banks had their stress tests. Perhaps the State needs them now because a number of people on the other side of the House told us the State is bankrupt. If it was not bankrupt before now there is a great chance that putting the bank debt with the sovereign debt will put us into the area of insolvency. A private company is deemed to be insolvent when its liabilities are greater than its assets. This debt certainly puts us into that place. If a private company went to the bank that bank would look at the company's potential for future profits and would say that if the company's future profits could cover the current losses perhaps it might do business. However, one would have to be very optimistic to see us paying the bills. Any private company that continues to borrow money when it is insolvent is regarded as trading recklessly. In my opinion, this Government is now trading recklessly.
It has been argued that this motion does not merit a referendum. Article 27 of the Constitution states that an amendment of the Constitution is applicable when a Bill "contains a proposal of such national importance that the will of the people thereon ought to be ascertained". I believe most people in this country would agree this is an issue of massive national importance. This Government has spoken a great deal about having a new approach to politics and more openness. It is prepared to engage the people. It speaks about looking at the Constitution and engaging with the people on it, which is very good. There is also a need to look at local government and engage and bring the citizen back into local government.
If this Government is serious about engaging the citizens of Ireland in a democratic process and about giving them a say in how they are governed it should have the courage for a referendum on this issue.
Although the Government opposes the motion put forward by the 13 members of the Technical Group, I can understand why they seek a referendum on the bank bailout and the EU-IMF programme. There is no doubt that the bailout will impose a heavy debt burden on Ireland for many years to come. Neither is there any doubt that compliance with the programme involves implementing many difficult fiscal measures which will affect nearly everyone in the State.
I also understand why there is anger throughout the country at having to pay the bill for the reckless and thoroughly incompetent behaviour of some of the most highly paid and self regarding individuals on this island. These are people who demonstrated little or no evidence of having understood the responsibilities with which they were entrusted or the consequences of their actions for their shareholders, their companies and the economy, or for society as a whole. In this context, society is not a neutral abstraction - it is made up of our families, our friends, our neighbours and all those other hundreds of thousands of men, women and young people who have to cope each day with the reality of straitened incomes, large mortgages and uncertain job prospects.
Before I respond to the issue of the proposed referendum it is relevant to comment on developments since my announcement last week in response to the bank stress tests. The reaction at home and abroad to this announcement has been favourable and shows that confidence in our banks and in the economy has begun to re-emerge. Standard and Poor's has removed Ireland from the CreditWatch monitoring system, noting "the outlook is now stable ". They believe the Irish economy has stronger growth prospects than others due to Ireland's "openness, its flexibility, and its competitiveness". The investment bank Morgan Stanley states that Ireland is still facing major challenges - as indeed it is - but went on to say:"The stabilization of the Irish banking system that we expect the stress test to facilitate should allow the economic turnaround already underway to boost investor confidence in Ireland's medium-term debt sustainability."
This underlines the need for certainty and stability. Confidence is fragile. The inevitable uncertainty that would be generated by the announcement by this Government of a referendum on the bailout and the EU-IMF programme could have serious consequences for this emerging confidence, regardless of the outcome of the referendum. To be specific, if the Government were to agree to a referendum this would be interpreted as a weakening of its resolve regarding its commitments to the bank bailout and the EU-IMF programme. Even if the result of the referendum were a strong "Yes" in favour of the Government's policy, much damage would have been done in the meantime. If the answer were "No", we would be faced with the immediate crisis of trying to find new sources of funds to prevent our public services from collapsing. We cannot afford any ambiguity regarding our commitments on the bailout or the EU-IMF programme.
The Government already has a strong mandate from the Irish electorate to sort out the banking crisis and the economy. In our programme for Government we support the objectives of the EU-IMF programme, namely, restructuring and recapitalising the banking system, achieving fiscal stability and returning the economy to growth. We also state our objectives of restoring confidence, growth, job creation and the State's access to affordable credit from private lenders.
Many points were made in the debate on this motion but I have time to respond to only a few of them. Deputy Ó Cuív made a thoughtful contribution to the debate and made many interesting comments. I particularly agree with his statement: "the notion that one hurts nobody but bankers by allowing banks to collapse is naive in the extreme ". It is also worth repeating his point about burning bondholders, namely, there is no way of discriminating between the money from those who have made big investments and the money from small people which is invested in life insurance policies and pension funds. Neither is there a way to distinguish the investment in senior unguaranteed bonds made by several members of the Irish League of Credit Unions. I do not believe there is any Member on the other side of the House who would like to burn the bonds in his or her local credit union.
Deputies Keaveney and Dowds asked questions regarding the Central Bank's estimate that SME and mortgage credit of between €11 billion and €16.5 billion of gross new lending will be required over the next three years. Deputy Keaveney asked how we will ensure that these moneys will be circulated into the local and national economies to encourage risktakers in the SME sector to get involved in job creation. Deputy Dowds asked the Government to demonstrate how the money being pumped into the banks will be made available for lending to small to medium-sized businesses. I hope that my speech to the Dáil earlier today during statements on bank reorganisation provided an adequate response to these important questions.
In that speech I pointed out that credit was essential to the economy and that it was critical to have a new approach to system design to provide the necessary credit to spearhead economic recovery. I also pointed out the importance of reasonably-priced loans for investment in SMEs and for house-buyers. Until now our under-capitalised banks have been under pressure to delever assets to repay the funding due to the ECB and the Central Bank and were forced to avoid new lending. Now this problem has been solved, more than €30 billion of new lending will become available between now and 2013. I am determined to ensure this money will be used for investment, as well as for consumer spending, so that confidence can be restored to the economy which will, in turn, lead to increased employment and even further investment, consumer spending and confidence. Accordingly, I have decided that the banking policy division of the Department of Finance will work with the Central Bank to monitor lending closely to ensure that it will be offered where it will do the most good for the economy as a whole.
I repeat the point I made earlier. If we were to delever the main banks down to the equilibrium point that would be required for prudent deleveraging, there would not be headroom for further lending; we are delevering below that point so there is headroom for further lending. As well as that, we are looking at the quantum, which was excessive, that was lent by Irish banks to the building and development sector. As that works its way through the system, we will ensure the funds that were allocated to speculative building and development will be reallocated to important growth areas of the economy and to social ends. In other words, SMEs that can create jobs will get the credit lines they need and young couples who want to form families will again have access to mortgages. It is deplorable that we would arrive at a point where according to the latest figures available to me, only 87 new houses were registered in Dublin last month. It is socially corrosive if young couples cannot purchase homes and form families. The reason for that is the declining market that seems to have no bottom and in which no mortgages are available. When there is no market, people do not buy.
We must establish the credit lines again and I assure the House this will be driven by the Central Bank and the Department of Finance. The big mistake made by my predecessor was that while he made many statements and proposed many good policies, he did not have an implementation unit to drive implementation. He was then accused of making promises he did not fulfil. That will not happen on this occasion.
I thank the Minister for taking this motion seriously and acknowledging that it was tabled in a serious fashion. Some of us resent the dismissive nature of some of the Fine Gael Members' attitudes to this motion, which they described as populist. That was not the intention; our intention in putting this motion down is to produce an alternative policy.
There is an alternative policy. The Government has found itself in a difficult place but it has accepted the situation, which was admittedly delivered to them by the last Government, far too readily. If it held a referendum, it would not just be a one-off pandering to public opinion, it would give the Government the strength to go back to those to whom we owe the money and say the Irish people have given a mandate to renegotiate the deal.
The Minister said that if the Government was to agree to a referendum it would be interpreted as a weakening of its resolve regarding its commitment to the bank bailout and EU-IMF programme. That is exactly what we want; we want a weakening of the Government's resolve in its attitude to the EU and IMF programme. We want the Government to say it must be changed. The Minister's interpretation of a weakening is our interpretation of strength.
He went on to say that if the answer was "No", we would be faced with an immediate crisis of trying to find new sources of funds, which is fair enough. He told the House that we cannot afford any ambiguity regarding our commitments on the bailout or the EU-IMF programme. We want that ambiguity. We want the Minister for Finance to be able to say the Irish people have said "No" and that the Government is trapped in a position where renegotiation of the deal is demanded by the people.
It is difficult to draw parallels because of the appalling situation in which Ireland finds itself economically. There was, however, a referendum on an IMF deal and financial crisis in Iceland. I concede it is not a direct parallel, but it is a parallel in that there was a deal between the British, Dutch and Icelandic Governments. When there was a default by the Icelandic banks to British depositors, the British and Icelandic Governments negotiated a new deal after a referendum where the Icelandic people said "No" to the deal the Icelandic Government had negotiated. The Government then went back and renegotiated to the extent that the interest rate on the loans was reduced by 40%, falling from 5.5% to 3.2%. That was only as a result of a referendum which the President of Iceland forced against the Icelandic Parliament's wishes. I am asking the Minister to ask the people for the mandate to go back and negotiate again.
There is a paternalistic attitude on the part of Government when it says it has been given a mandate by being elected to do whatever it likes. The Government does not have that mandate if it said the opposite a few weeks ago. The Government has the mandate to govern, and the right to do a U-turn, there is nothing we can do to stop that, but it does not have a mandate to do the opposite of what it said it would do.
I am coming to an end now. This has resonances of what happened in France during one of the referenda on Lisbon, when the former French President, Valéry Giscard d'Estaigne, said the matter was too important to be left to the French people. Referenda are not a threat to governments; they strengthen their position in appalling situations like the one we are in at the moment. We are in a corner so we must look to the people to give us the strength to go forward and renegotiate the deal. Let us not be frightened of them giving the result we do not want. Let us look to them to give us the muscle to say "No" to the deal and to renegotiate it downwards.
Listening to the debate last night and tonight, if an observer closed his eyes and listened to the Government benches, he would think he was back four months listening to Fianna Fáil backbenchers agreeing again to the financing of the banks and another bailout.
When the Government was elected, it was at pains to say the people had voted for change, for a new way of doing things and for policies that would benefit Ireland, not Europe, Germany or Holland. Everyone in the country, including every economist, has a vision or an idea of what this bank bailout is about and has an opinion on it. Is the Minister seriously suggesting to me that the people wish to give the banks another cent? Is he delusional? Is he listening to the people? It is astonishing to suggest that we can give them another €24 billion.
One of the Deputies across the Chamber suggested the Government has the mandate to do this, but the Government has no mandate to do this because those in the Government stated time and again when they were in Opposition, sitting over here, when they spoke on RTE television or radio or on local radio stations, that they would not give the banks one more cent. This is what they said when they were in Opposition and there are multiple quotes to this effect in newspapers such as The Irish Times or The Irish Daily Mail. They stated they would not do it but now they are doing it.
There are hundreds of thousands of people on the dole queues, there are workers this Thursday or Friday who will take home a miserable wage and live a miserable existence because they have no quality of life and there are families, including thousands of children, who have been forced to emigrate from this country. Yesterday in this building I met representatives of Unite who, perhaps, will be fighting to preserve the jobs of thousands of bank workers who may lose their jobs in the coming years because of arrogance, avarice, greed and the compulsive gambling of our money and the Government's money. Are we to suggest to the people that we are sorry but that we must help these people out again? These are the people who continued to mislead the country. They told us lies. Some of these executives still drive around in 2011 Mercedes cars while they discuss chopping workers and throwing them onto the dole heap. Are these the people we are to support?
What happened to all the election promises? Some four months ago, the Minister was quoted as calling the EU-IMF deal a downright obscenity. It is regretful for me to have to take on the Labour Party because I genuinely believe it stands for justice and fair play and I have no hesitation in saying as much. However, the Minister stated on RTE Radio 1 that they would not give one more cent to the banks.
What is this referendum about? It is a single vote on an issue that affects everyone in the country. It will truly represent the wishes of the people. Either it will give the Government the authority and approval to continue the same policy that the Labour Party and the Fine Gael Party described as a national sell-out or it will force the Government to look for other options. A resounding "No" would send the message to Europe that we cannot afford and will not accept a bailout. At least we could use it as a tool for the Government to negotiate a significant drop in the interest rate.
The people deserve a Government that will act in their interests rather than in the interests of other Governments and European overlords, what it is doing at present. A referendum would settle this matter once and for all and the people deserve as much. Were one to ask any Joe Soap in the country what he wants, he would say as much. They do not want any more money given to the banks.
I have listened to the arguments of the Government in opposing our call for a referendum and the argument seems to run thus: in January and February of this year we believed that bailing out the banks at the expense of ordinary people was, in the words of the Minister, Deputy Noonan, morally wrong and economically unsustainable and in Deputy Gilmore's words, it amounted to economic treason. That is what the Minister stated. Presumably, unless he was trying to deceive people then, those words still stand, the policy is unjust, unacceptable and is still economic treason. However, the argument follows that because the Government is in a straitjacket, there is nothing it can do about it and it has no choice.
To use a somewhat hackneyed phrase, it is an appalling vista that the Government has no choice but to do something that is morally wrong, economically unsustainable, which amounts to economic treason and which is now bordering on political treason, in so far as before the election those now in Government said one thing but they are now doing the opposite. The justification for this argument is that if we say "No" to the EU-IMF package, they will pull the plug; that unless we do their bidding and continue to pay off the bankers and the bondholders at the expense of ordinary working people and families, our public services and the sale of our State assets, the EU will pull the plug. Let us consider this point because it is the Government's only argument. The suggestion is that they will pull the plug on the State. What the Government is really telling us is that we must concede to blackmail and bullying by the EU and the IMF, institutions which are acting on behalf of the bankers and speculators.
Should the Minister not show a little dignity and backbone and stand up to the institutions and interests in Europe, which are simply bullying and threatening us to defend the interests of bankers and bondholders? The Minister also maintains that he is doing what he is doing to get liquidity back into the banks and, ultimately, to create jobs. However, what the Minister will not accept or acknowledge is that the austerity cuts that the IMF demands to pay off these bankers' loans are doing the opposite; they are taking money out of the economy and forcing more job losses. The Minister's logic is somewhat like the American logic in Vietnam: they took the view they had to bomb a village to save it; the Minister believes he must create unemployment to deal with the unemployment crisis. It makes no sense whatsoever.
Perhaps the Minister could do me the courtesy of listening for one minute rather than chitchatting for the final part of the motion.
I put it to the Minister that the EU's threats are empty. They will not pull the funding on our banks because the reason this policy was introduced was to save their banks. That is why they demanded that we put in place a guarantee of the banks and that we pay off the bondholders. It is to protect their banks. They realise that if our banks go down, their banks go down. This is the bargaining power we have but the Minister refuses to use it and that mystifies me. One can only conclude it is because the Minister is part of a cosy club of the elite in this country and throughout Europe which is protecting its interests at the expense of working people. I put it to the Minister that if we say "No"-----
-----they must come back and negotiate with us because they cannot afford to let the euro, which is so important to them, collapse or to let the banking system in Europe collapse. If we say "No" or if we have the right to vote or consider the possibility of saying "No" to this economic madness and social injustice, we would be joined in calling for a proper debate on the matter by the people in Greece, Italy, Portugal and Spain who are being asked to accept the same austerity to protect the international system.
The Government maintains it has no alternative. Our alternative is simply to repudiate the gambling debts of these private, for-profit institutions. There is €100 billion in deposits in our banks. Why not put this into a State bank which does not carry the debts of these bankers and speculators? We could access finance on the international markets. Such a bank could invest in jobs, strategic infrastructure and industry in this country. It would not cost the people their future, their public services, their incomes and their livelihoods unlike this insane policy. Will the Government at least give the people the opportunity to debate the matter in a referendum? If they do not agree that is fine and the Government will win the debate, but if they agree such is their choice. The Minister should let the people decide, withdraw his amendment and allow the people to vote on their future.
The Dail Divided:
For the motion: 121 (James Bannon, Tom Barry, Tommy Broughan, John Browne, Richard Bruton, Joan Burton, Jerry Buttimer, Catherine Byrne, Eric Byrne, Dara Calleary, Ciarán Cannon, Joe Carey, Paudie Coffey, Áine Collins, Niall Collins, Michael Conaghan, Seán Conlan, Paul Connaughton, Ciara Conway, Noel Coonan, Marcella Corcoran Kennedy, Joe Costello, Simon Coveney, Barry Cowen, Michael Creed, Lucinda Creighton, Jim Daly, John Deasy, Jimmy Deenihan, Pat Deering, Regina Doherty, Pashcal Donohoe, Timmy Dooley, Robert Dowds, Andrew Doyle, Bernard Durkan, Alan Farrell, Frank Feighan, Ann Ferris, Peter Fitzpatrick, Charles Flanagan, Terence Flanagan, Seán Fleming, Eamon Gilmore, Brendan Griffin, Dominic Hannigan, Noel Harrington, Simon Harris, Brian Hayes, Tom Hayes, Martin Heydon, Phil Hogan, Brendan Howlin, Heather Humphreys, Kevin Humphreys, Derek Keating, Colm Keaveney, Paul Kehoe, Billy Kelleher, Alan Kelly, Seán Kenny, Séamus Kirk, Michael Kitt, Seán Kyne, Anthony Lawlor, Brian Lenihan Jnr, Ciarán Lynch, Kathleen Lynch, John Lyons, Eamonn Maloney, Micheál Martin, Peter Mathews, Michael McCarthy, Charlie McConalogue, Shane McEntee, Dinny McGinley, Michael McGrath, John McGuinness, Joe McHugh, Tony McLoughlin, Michael McNamara, Olivia Mitchell, Mary Mitchell O'Connor, Michael Moynihan, Michelle Mulherin, Dara Murphy, Eoghan Murphy, Gerald Nash, Denis Naughten, Dan Neville, Derek Nolan, Michael Noonan, Éamon Ó Cuív, Seán Ó Fearghaíl, Aodhán Ó Ríordáin, Kieran O'Donnell, Patrick O'Donovan, Fergus O'Dowd, John O'Mahony, Joe O'Reilly, Jan O'Sullivan, Willie Penrose, John Perry, Ann Phelan, John Paul Phelan, Ruari Quinn, Pat Rabbitte, James Reilly, Alan Shatter, Róisín Shortall, Brendan Smith, Arthur Spring, Emmet Stagg, David Stanton, Robert Troy, Joanna Tuffy, Liam Twomey, Leo Varadkar, Jack Wall, Brian Walsh, Alex White)
Against the motion: 27 (Richard Boyd Barrett, Joan Collins, Michael Colreavy, Seán Crowe, Clare Daly, Pearse Doherty, Stephen Donnelly, Dessie Ellis, Martin Ferris, John Halligan, Séamus Healy, Joe Higgins, Pádraig MacLochlainn, Mary Lou McDonald, Finian McGrath, Mattie McGrath, Sandra McLellan, Catherine Murphy, Caoimhghín Ó Caoláin, Aengus Ó Snodaigh, Jonathan O'Brien, Maureen O'Sullivan, Thomas Pringle, Shane Ross, Brian Stanley, Peadar Tóibín, Mick Wallace)
Tellers: Tá, Deputies Paul Kehoe and Emmet Stagg; Níl, Deputies Catherine Murphy and Aengus Ó Snodaigh.
Amendment declared carried.
The Dail Divided:
For the motion: 119 (James Bannon, Tom Barry, Tommy Broughan, John Browne, Richard Bruton, Joan Burton, Jerry Buttimer, Catherine Byrne, Eric Byrne, Dara Calleary, Joe Carey, Áine Collins, Niall Collins, Michael Conaghan, Seán Conlan, Paul Connaughton, Ciara Conway, Noel Coonan, Marcella Corcoran Kennedy, Joe Costello, Simon Coveney, Barry Cowen, Michael Creed, Lucinda Creighton, Jim Daly, John Deasy, Jimmy Deenihan, Pat Deering, Regina Doherty, Pashcal Donohoe, Timmy Dooley, Robert Dowds, Andrew Doyle, Bernard Durkan, Alan Farrell, Frank Feighan, Ann Ferris, Peter Fitzpatrick, Charles Flanagan, Terence Flanagan, Seán Fleming, Eamon Gilmore, Brendan Griffin, Dominic Hannigan, Noel Harrington, Simon Harris, Brian Hayes, Tom Hayes, Martin Heydon, Phil Hogan, Brendan Howlin, Heather Humphreys, Kevin Humphreys, Derek Keating, Colm Keaveney, Paul Kehoe, Billy Kelleher, Alan Kelly, Seán Kenny, Séamus Kirk, Michael Kitt, Seán Kyne, Anthony Lawlor, Brian Lenihan Jnr, Ciarán Lynch, Kathleen Lynch, John Lyons, Eamonn Maloney, Micheál Martin, Peter Mathews, Michael McCarthy, Charlie McConalogue, Shane McEntee, Dinny McGinley, Michael McGrath, John McGuinness, Joe McHugh, Tony McLoughlin, Michael McNamara, Olivia Mitchell, Mary Mitchell O'Connor, Michael Moynihan, Michelle Mulherin, Dara Murphy, Eoghan Murphy, Gerald Nash, Denis Naughten, Dan Neville, Derek Nolan, Michael Noonan, Éamon Ó Cuív, Seán Ó Fearghaíl, Aodhán Ó Ríordáin, Kieran O'Donnell, Patrick O'Donovan, Fergus O'Dowd, John O'Mahony, Joe O'Reilly, Jan O'Sullivan, Willie Penrose, John Perry, Ann Phelan, John Paul Phelan, Ruari Quinn, Pat Rabbitte, James Reilly, Alan Shatter, Róisín Shortall, Brendan Smith, Arthur Spring, Emmet Stagg, David Stanton, Robert Troy, Joanna Tuffy, Liam Twomey, Leo Varadkar, Jack Wall, Brian Walsh, Alex White)
Against the motion: 27 (Richard Boyd Barrett, Joan Collins, Michael Colreavy, Seán Crowe, Clare Daly, Pearse Doherty, Stephen Donnelly, Dessie Ellis, Martin Ferris, John Halligan, Séamus Healy, Joe Higgins, Pádraig MacLochlainn, Mary Lou McDonald, Finian McGrath, Mattie McGrath, Sandra McLellan, Catherine Murphy, Caoimhghín Ó Caoláin, Aengus Ó Snodaigh, Jonathan O'Brien, Maureen O'Sullivan, Thomas Pringle, Shane Ross, Brian Stanley, Peadar Tóibín, Mick Wallace)
Tellers: Tá, Deputies Emmet Stagg and Paul Kehoe; Níl, Deputies Aengus Ó Snodaigh and Catherine Murphy.
Question declared carried.