Dáil debates
Tuesday, 27 September 2011
Ceisteanna - Questions (Resumed)
EU Affairs
4:00 pm
Gerry Adams (Louth, Sinn Fein)
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Question 6: To ask the Taoiseach if he has had any contact with EU leaders during the summer recess. [23766/11]
Gerry Adams (Louth, Sinn Fein)
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Question 7: To ask the Taoiseach if he will report on his attendance at the emergency EU summit on economic matters which he attended in July 2011. [23767/11]
Joe Higgins (Dublin West, Socialist Party)
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Question 8: To ask the Taoiseach if he will report on his attendance at the emergency summit of European Union leaders on 21 July 2011. [24424/11]
Joe Higgins (Dublin West, Socialist Party)
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Question 9: To ask the Taoiseach if he will report on his discussion with European leaders over the summer on the crisis in the European financial markets. [24425/11]
Micheál Martin (Cork South Central, Fianna Fail)
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Question 10: To ask the Taoiseach if he will report on the details and contents of bilateral contacts he has had with leaders of Eurozone countries since the last emergency meeting of Eurozone leaders. [24700/11]
Micheál Martin (Cork South Central, Fianna Fail)
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Question 11: To ask the Taoiseach if he has had any contact with Mr Jean Claude Trichet or Mr Mario Draghi since the last meeting of EU leaders; the nature and extent of each of these contacts; and if he will make a statement on the matter. [24701/11]
Micheál Martin (Cork South Central, Fianna Fail)
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Question 12: To ask the Taoiseach the contact he has had with Chancellor Merkel and President Sarkozy concerning proposals for amending the EU treaties discussed by them during recent weeks. [24702/11]
Micheál Martin (Cork South Central, Fianna Fail)
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Question 13: To ask the Taoiseach the preparations he has made for submitting proposals to the EU Council concerning the consideration of reforms to the governance of the Union and the Eurozone. [24703/11]
Micheál Martin (Cork South Central, Fianna Fail)
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Question 14: To ask the Taoiseach the differences between the text agreed by him at the July meeting of Eurozone leaders concerning Ireland's corporate taxation and the text proposed in March. [24731/11]
Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Question 15: To ask the Taoiseach his plans to talk or meet with other Eurozone leaders in view of the ongoing Eurozone crisis; if he will outline a schedule of these meetings; and if he will make a statement on the matter. [24751/11]
Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Question 16: To ask the Taoiseach if he will report on discussions he has had with other EU leaders on the growing Eurozone crisis; and if he will make a statement on the matter. [26071/11]
Enda Kenny (Mayo, Fine Gael)
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I propose to take Questions Nos. 6 to 16, inclusive, together.
I attended a meeting of the Heads of State or Government of the euro area in Brussels on 21 July. The meeting was convened to consider the financial stability of the euro area as a whole and future financing of the Greek programme. We took important decisions in three key areas: improving Greek debt sustainability, addressing the risk of contagion and committing to improve the eurozone's crisis management. We agreed to support a new programme for Greece and, together with the IMF and the voluntary contribution of the private sector, to cover fully its financing gap. The agreed official financing of an estimated €109 billion will be designed, notably through lower interest rates and extended maturities, to improve decisively the debt sustainability and refinancing profile of Greece.
We also agreed important enhancements to the EFSF. It will get more flexibility to intervene in the areas of precautionary assistance; recapitalisation of banks through Governments, including in non-programme countries; and secondary market interventions in exceptional circumstances on the basis of an analysis by the ECB. Member states are now engaged in the process of legislative change needed to enable the new arrangements to enter into force. For our part, the necessary Bill was passed last week and now has been signed. The measures agreed in July were based on a clear acknowledgement that the Greek situation is different from that of other countries and required an exceptional response, including as regards the participation of the private sector.
The decisions made at the meeting will mean that the EFSF will lend to Ireland at a significantly reduced rate. This will apply not only to moneys yet to be drawn down, but also to future interest payments on existing loans. This is a saving in the order of several billion euro over the term of the loans. In this regard, I very much welcome the decision of the European Commission to propose that loans under the EFSM will come with zero margin.
The meeting in July recognised Ireland's resolve to press ahead with implementation of our programme, and expressed its strong commitment to our success. We tasked the President of the European Council, in close consultation with the President of the Commission and the president of the Eurogroup, to make concrete proposals by October on how to improve working methods and enhance crisis management in the euro area. This work is now being advanced, including through bilateral consultations at official level.
With regard to corporation tax, there was no new language agreed at the meeting. We agreed to engage constructively in what I expect to be a very long debate on the Commission's CCCTB proposal, and more generally in the structured discussions on tax policy issues provided for within the framework of the euro plus pact. There was nothing new in this and the Government's position on the substance of the matter has not changed in any respect.
In the period since the end of July, there has been significant and ongoing engagement at Minister for Finance level and through associated euro area structures in giving effect to the measures that we agreed. I will meet several colleagues when I attend the meeting of the Eastern Partnership in Warsaw later this week. The next meeting of the European Council is scheduled for Brussels on 17-18 October. It will discuss economic policy, including, I anticipate, any developments regarding the eurozone, preparations for the G20 summit and climate change.
Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Given that Questions Nos. 6 to 16, inclusive, are grouped, I would like to be as fair as possible in calling Deputies. Deputy Gerry Adams, whom I call first, tabled Questions Nos. 6 and 7.
Gerry Adams (Louth, Sinn Fein)
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I object to the Taoiseach's lumping together so many questions. It happens so often. I have specific questions on Questions Nos. 6 and 7. Have there been discussions with our European partners about the centralisation of fiscal powers? Has the Government ruled out this development?
Enda Kenny (Mayo, Fine Gael)
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I have had no discussions with European leaders on fiscal powers. There have been quite a number of meetings and contacts between Ministers for Finance and officials dealing with the technicalities of the decisions made in July. They were signed off on recently at official level and confirmed by the ECOFIN Ministers. The answer to the Deputy's question is that I have had no discussions about the centralisation of fiscal powers.
Gerry Adams (Louth, Sinn Fein)
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Will the Taoiseach give a very clear commitment that he will rule out the Irish Government going along with the centralisation of fiscal powers?
Enda Kenny (Mayo, Fine Gael)
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How does the Deputy define "centralisation of fiscal powers"?
Gerry Adams (Louth, Sinn Fein)
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With respect, the Taoiseach must know what it means because it has been proposed by some of the larger states. Having taken monetary power, they want to take fiscal power. It has been proposed by the French and Germans, and the Taoiseach needs to stand very firmly against it. He should take the opportunity to decide on this now. He should pretend we are talking about taking money from old people.
Enda Kenny (Mayo, Fine Gael)
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I do not contemplate any such move. The Deputy is well aware of the fluidity of the debate, both in and outside Europe, on Europe's difficulties.
Gerry Adams (Louth, Sinn Fein)
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This is a fundamental question concerning sovereignty. One reason the Economic Management Council has nothing to discuss is because it has ceded so much economic power to the European Union and International Monetary Fund. It is very clear that the Government is standing with the bankers. Has it taken the opportunity, given what is happening in the eurozone and the crisis, to tell the relevant authorities it will not pay the €31 billion to Anglo Irish Bank and Irish Nationwide? The Government is committed to pay €7 million on 2 November. This would build approximately 200 schools or create 8,000 jobs. I do not understand it. Last week, I was in New York and met very senior Wall Street stockbrokers who were astounded the Government was not burning the bondholders and that it pays all of this money to a toxic bank. These people trade in their sector. As we see the eurozone crisis deepening, is it not time for the Taoiseach to seize the moment and for once stand up and state we will not pay the money? The Government is committed to removing €3.6 billion from the budget and at the same time will give €3 billion to Anglo Irish Bank. What does the Government owe Anglo Irish Bank?
Peter Mathews (Dublin South, Fine Gael)
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It was a commitment of the previous Government.
Micheál Martin (Cork South Central, Fianna Fail)
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No, it was not. They are not secured.
Enda Kenny (Mayo, Fine Gael)
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Who Deputy Adams meets in New York is his own business. All I can state is that the Minister for Finance has pointed out quite clearly that from his discussions with Mr. Trichet and Commissioner Rehn the question of burning senior bondholders in Anglo Irish Bank is something they would not contemplate. When this was mentioned in Greece, the contagion immediately spread to other larger economies, as Deputy Adams is well aware. What was signed off by my predecessor was a promissory note to Anglo Irish Bank and INBS for €30 billion, that is, €3 billion over each of ten years-----
Enda Kenny (Mayo, Fine Gael)
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-----with no interest to be paid until 2013 when the blended rate will be at more than 8%. The extent of moneys that might be saved by the State, while quite substantial at approximately €100 million in the case of Anglo Irish Bank and INBS, is much smaller than what could be achieved through the agenda now being pursued by the Minister for Finance, which is to deal with an extension of time and maturity in respect of the promissory note which was signed off by the previous Government. The savings there could be far more substantial than risking the enhanced reputation the country has achieved in the past six months internally in Europe and externally in the wider world from economic, business and political perspectives. It is a balance of looking at the risk to what we have achieved in the past six months and where we want to go. We want to be able to return to the bond markets ourselves and borrow at appropriate rates and be in charge of our economic future, which is the intention of the Government in implementing our programme.
Joe Higgins (Dublin West, Socialist Party)
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The Taoiseach just stated that Mr. Trichet, who is the President of the European Central Bank, told the Minister for Finance he would not contemplate the burning of the bondholders and specifically that the €3.5 billion to be paid to unsecured Anglo Irish Bank bondholders by the end of June had to be paid. What is the point of the Taoiseach going to EU summits if it is not the political leaders, supposedly elected by the people of Europe, who make the decision but bureaucrats at the European Central Bank who obviously represent the interests of the major European bankers, bond dealers, hedge funds and the rest of it? Does this not turn what is supposed to be democracy on its head? In July, did the Taoiseach discuss with Chancellor Merkel and President Sarkozy the issue of €3.5 billion? The Minister for Finance stated categorically in Washington in June that Anglo Irish Bank was a warehouse of debt and speculative investment and the Irish people should not pay. Did the Taoiseach follow up this by stating to Frau Merkel and Monsieur Sarkozy that the Irish people do not owe this money and that we will not pay it?
Gerry Adams (Louth, Sinn Fein)
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We know what the question is; the answer is another thing.
Enda Kenny (Mayo, Fine Gael)
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The selfsame bureaucrats of whom Deputy Higgins speaks fund the entire Irish banking system to the tune of almost €150 billion at a 1.5% interest rate and his own salary is paid out of it. It is important to attend meetings of EU Heads of Government because agreement was reached on our proposal that interest rate reductions be applied. The savings that have and will emerge from this are very substantial. Of course in the general discussions that have taken place the Minister for Finance has been very vociferous about the problem of Anglo Irish Bank and raised the matter long before he came into government. However, the consequence of dealing with it in the manner spoken about by Deputy Higgins became evident very abruptly in Italy when it was mentioned in the case of Greece.
I am not sure what is the opinion of Deputy Higgins but the country has changed direction and there is now a very different reaction to us internationally, which is far more favourable. Political leaders in Europe look at this country as possibly being the first to emerge from this economic challenge with an enhanced reputation and heading in the right direction to be in charge of our own economic destiny. I remind the Deputy that at the end of the day, the ECB and Mr. Trichet have been very favourably disposed towards Ireland and its citizens and €150 billion at 1.5% is a very substantial contribution from people whom Deputy Higgins claims are just bureaucrats.
Joe Higgins (Dublin West, Socialist Party)
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The point is that there would be no need for tens of billions of ECB funding if the policy of the predecessor Government now being followed and implemented by the Taoiseach-----
Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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A question please.
Joe Higgins (Dublin West, Socialist Party)
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-----had not been to guarantee €80 billion or €90 billion of gamblers debts. That is the point. Does the Taoiseach realise what he is saying?
Joe Higgins (Dublin West, Socialist Party)
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The Taoiseach stated in opposition to my demanding the non-payment of the €3.5 billion, which the Minister, Deputy Noonan, stated should not be paid, that we should look at what happened when there was a threat that this might happen in Greece. What happened? The sharks in the financial markets ratcheted up interest rates for Italy and Spain and terrorised the political leaders of Europe who all fell on their faces in front of them. Who runs Europe? Is it a dictatorship of the markets, as the Taoiseach just indicated he cannot make sovereign decisions because he fears unelected unaccountable entities in the financial markets? Is this not what the Taoiseach is stating?
Enda Kenny (Mayo, Fine Gael)
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It was not Europe which downgraded the United States. The markets have their own way of making their impact, obviously with devastating consequences in some cases. I remind Deputy Higgins that the amount of unguaranteed residual bonds in Anglo Irish Bank is €3.46 billion, comprising €2.86 billion from Anglo Irish Bank and €600 million from Irish Nationwide. A voluntary burning of these bondholders might, depending on the price offered in any LME, liability management exercise,and taken up by the bondholders, raise approximately €100 million. As I pointed out, the savings that might be achieved in dealing with the extent of the promissory note would be of a far greater proportion than this and would not destroy the rising credibility and enhanced reputation that Ireland has achieved with our European colleagues and internationally in the past six months.
Micheál Martin (Cork South Central, Fianna Fail)
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I have tabled five of the questions included in this group and I hope I receive a reasonable opportunity. I agree with what Deputy Adams stated on the unsatisfactory nature of grouping all of these questions, which are on quite different topics.
The Taoiseach is spinning a great yarn about the international response to Ireland and our approach. The bottom line is that the response to Ireland is due to the fact that very severe budgetary measures were taken which hurt many people and which were politically unpalatable. The budget passed last year included a correction of approximately €6 billion. The international response to this has been-----
Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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I ask the Deputy to put a question please.
Micheál Martin (Cork South Central, Fianna Fail)
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-----that Ireland has bitten the bullet. It has nothing to do with what the Taoiseach did since he came into power because he has taken no substantive decision on anything. It is wrong of him to keep pedalling and spinning this yarn.
Pat Rabbitte (Dublin South West, Labour)
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You must be joking. It is this Government that has implemented the pain, sadly.
Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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We are not having a discussion or a debate.
Micheál Martin (Cork South Central, Fianna Fail)
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That is what it is; it is a yarn.
Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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This is Question Time.
Micheál Martin (Cork South Central, Fianna Fail)
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Does the Taoiseach agree that he voted against every one of those measures?
Enda Kenny (Mayo, Fine Gael)
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What did the previous Government do about reducing the banks?
Micheál Martin (Cork South Central, Fianna Fail)
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He behaved in a reckless and irresponsible way and is now claiming credit six months later because he has not changed any of them. That is basically the factual position.
Enda Kenny (Mayo, Fine Gael)
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I have never looked for credit in my life.
Micheál Martin (Cork South Central, Fianna Fail)
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I asked the Taoiseach about the summit meeting which refused to address the issue of burning bondholders. Does he agree that the core issue is again about what politicians told the Irish people in a fundamental communication? I told people in advance of the election that there could not be a unilateral burning of bondholders.
Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Could I have a question please?
Micheál Martin (Cork South Central, Fianna Fail)
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I put it to the Taoiseach that the public was fundamentally misled on the issue in that he and his party told them there could be unilateral burning of bondholders. The Tánaiste said that it would be Frankfurt's way or Labour's way. I will put the core question to the Taoiseach again because I did not get an answer. Does he not agree it is now on the agenda? Perhaps he cannot comment publicly but it is being talked about openly all over Europe and internationally that Greek sovereign debt is up for discussion. That is something we never contemplated in terms of a major burning of sovereign bondholders. That appears to be on the agenda in Greece-----
Peter Mathews (Dublin South, Fine Gael)
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It is not burning, it is writing down.
Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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I am sorry. Deputy Mathews should not interrupt.
Micheál Martin (Cork South Central, Fianna Fail)
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-----yet we are being told that anything to do with non-secured bondholders in Anglo Irish Bank is completely off the agenda. It is wrong of the Taoiseach as well to use the term-----
Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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We will leave history to the historians. The Deputy should ask a question please.
Micheál Martin (Cork South Central, Fianna Fail)
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-----"sleight of hand". I ask him to withdraw the term in regard to the Minister for Finance, Deputy Noonan's late predecessor. It is unworthy. The Taoiseach is aware that it was quite transparent at the time and it was brought before the House.
Bernard Durkan (Kildare North, Fine Gael)
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What about from 2003 onwards when a hole was being dug for the national economy? For God's sake.
Micheál Martin (Cork South Central, Fianna Fail)
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That is fine if issues arise on renegotiating the agreement. I have no difficulty with that.
Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Will Deputy Martin put a question to the Taoiseach please?
Micheál Martin (Cork South Central, Fianna Fail)
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Why is that off the agenda? I put that point in particular to the Taoiseach in terms of the ongoing debate about Greece and the sovereign issue and the fact that he is working his way out in terms of spinning a yarn and getting off the hook of very clear commitments he made on burning bondholders, senior debt holders-----
Peter Mathews (Dublin South, Fine Gael)
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It is not burning bondholders, it is writing down to collectable amounts.
Micheál Martin (Cork South Central, Fianna Fail)
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-----and unsecured debt. I thank Deputy Mathews.
Charlie McConalogue (Donegal North East, Fianna Fail)
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What is the difference?
Enda Kenny (Mayo, Fine Gael)
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The writing down in respect of subordinated bondholders has been significant. Deputy Martin seems to be taking a line that is completely irrelevant.
Micheál Martin (Cork South Central, Fianna Fail)
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It is relevant.
Enda Kenny (Mayo, Fine Gael)
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The Government follows through on the programme for Government. I recall two of Deputy Martin's colleagues at the time saying in public interviews that they did not know the IMF was coming in, that they never heard anything about it.
Enda Kenny (Mayo, Fine Gael)
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At least the public is now being told what the situation is.
Micheál Martin (Cork South Central, Fianna Fail)
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Will the Taoiseach answer the question I asked?
Enda Kenny (Mayo, Fine Gael)
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The position has been outlined very clearly for Deputy Martin and for everybody else-----
Micheál Martin (Cork South Central, Fianna Fail)
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Does the Taoiseach regret making the commitments?
Enda Kenny (Mayo, Fine Gael)
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-----by the Minister for Finance. In response to discussions both with Commissioner Rehn and Mr. Trichet, the question of writing down debt in respect of senior bondholders in Anglo Irish Bank is something that when it was mentioned in the case of Greece had an automatic spill-over in respect of the Italian economy and the situation arising there. The Minister rightly pointed out that he would reflect on the discussion but that a far greater opportunity for this country exists if we can do something about the promissory note. Perhaps Deputy Martin might like to explain to me why no interest rate was applied on it for two years, which is only going to apply as a blended rate of over 8% from 2013. Why did he not tell that to the people in the beginning?
Micheál Martin (Cork South Central, Fianna Fail)
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We did. The Taoiseach keeps on saying "The Minister for Finance" as if he is independent of him. The Taoiseach is the Head of Government. Does he regret making the clear commitments to the Irish people that he made on senior bondholders - and made for a long time in this House, and attacked the outgoing Government on the issue time and time again?
Bernard Durkan (Kildare North, Fine Gael)
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Does Deputy Martin remember where he was when the IMF came?
Micheál Martin (Cork South Central, Fianna Fail)
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I can indeed. Yes.
Pat Rabbitte (Dublin South West, Labour)
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Does Deputy Martin remember who caused it?
Bernard Durkan (Kildare North, Fine Gael)
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Does Deputy Martin remember what he said when they IMF came?
Micheál Martin (Cork South Central, Fianna Fail)
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Chancellor Merkel-----
Bernard Durkan (Kildare North, Fine Gael)
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I am sorry, a Cheann Comhairle.
Micheál Martin (Cork South Central, Fianna Fail)
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Chancellor Merkel and President Sarkozy have announced proposals for radical changes to the European treaties. The Taoiseach was asked a question about that earlier and he almost feigned ignorance of it. The world and its mother know they did that. It is a dangerous trend that both Germany and France think that what they now say on future treaties goes, without challenge. I ask the Taoiseach to comment on that.
Peter Mathews (Dublin South, Fine Gael)
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Today the world recognises that losses have to be recognised. That is what the markets are saying.
Micheál Martin (Cork South Central, Fianna Fail)
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Please, Deputy.
Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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I am sorry, Deputy Mathews should please not interrupt.
Micheál Martin (Cork South Central, Fianna Fail)
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Am I allowed to continue?
Peter Mathews (Dublin South, Fine Gael)
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I am sorry, a Cheann Comhairle.
Micheál Martin (Cork South Central, Fianna Fail)
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It is very important. I asked a question and I did not get a response.
Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Will Deputy Martin please ask questions? Another Deputy has tabled two questions and we have 11 minutes left.
Micheál Martin (Cork South Central, Fianna Fail)
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I have five questions.
Charlie McConalogue (Donegal North East, Fianna Fail)
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What is the point, a Cheann Comhairle? The Taoiseach does not answer any of them.
Micheál Martin (Cork South Central, Fianna Fail)
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I have asked questions. I am getting to the point of what preparations the Taoiseach is making to submit proposals to the EU Council. It is Question No. 13-----
Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Deputy Martin should please put the question.
Micheál Martin (Cork South Central, Fianna Fail)
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-----concerning the consideration of reforms to the governance of the EU and the eurozone. Instead, the Taoiseach is feigning ignorance as if he is not contemplating anything or there is nothing going on-----
Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Deputy Martin should leave out the padding.
Micheál Martin (Cork South Central, Fianna Fail)
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-----but that is happening. Will the Taoiseach answer me as to what preparations and submissions he has made about those fundamental issues? This House at least should have the opportunity to debate it.
Pat Rabbitte (Dublin South West, Labour)
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There is nothing going on. Does Deputy Martin remember who said that?
Micheál Martin (Cork South Central, Fianna Fail)
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The Taoiseach has repeatedly dodged my final question and he has used freedom of information legislation to avoid answering it.
Bernard Durkan (Kildare North, Fine Gael)
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This is the greatest laugh of all time.
Micheál Martin (Cork South Central, Fianna Fail)
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Will the Taoiseach specifically answer the question on the corporation tax issue? He must show us the exact deal he rejected in March. He must show us the text of the Van Rompuy position he rejected in March. We must contrast that with the deal from last July. What is the difference between the two? I asked the Taoiseach in Parliamentary Question No. 14 the differences between the text agreed by the Taoiseach at the July meeting of eurozone leaders concerning Ireland's corporation tax and the text proposed in March. It is a simple question which could be answered if the Taoiseach were to publish both texts. That would be the end of the matter. Let the people judge.
Peter Mathews (Dublin South, Fine Gael)
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As McEnroe said: "You cannot be serious." Corporation tax in the eurozone
Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Deputy Mathews should allow the Taoiseach to reply.
Enda Kenny (Mayo, Fine Gael)
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Mr. Van Rompuy did not circulate a text.
Dara CallearyEnda Kenny (Mayo, Fine Gael)
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He made a proposition. He did not circulate a text generally to leaders in respect of what Deputy Martin is talking about. He made a suggestion to deal with a particular problem but that was not accepted.
Micheál Martin (Cork South Central, Fianna Fail)
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Does the Taoiseach acknowledge what he said previously?
Enda Kenny (Mayo, Fine Gael)
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That problem has been dealt with and Deputy Martin and his colleagues should move on and deal with the crisis.
Micheál Martin (Cork South Central, Fianna Fail)
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The Taoiseach said in the House on the record that he did circulate a text.
Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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I am sorry, but Deputy Martin should not interrupt.
Enda Kenny (Mayo, Fine Gael)
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In respect of Deputy Martin's comment about propositions for the next Heads of Government meeting, before that meeting on behalf of the country I intend to participate fully in a comprehensive discussion about what opportunities we might propose in a European sense that will help our colleagues in the European Union and the eurozone to deal with this particular crisis. As I pointed out to Deputy Martin, the issue that was raised in the Financial Times in January of this year in respect of the rate of margin of the fund was first raised by Ireland and was eventually carried through by a decision both of the European leaders and ECOFIN.
In respect of Greece and the current position, I expect that every country that has signed on for the conditions in July will go ahead and implement them, as we have done and are doing in this country. As the position evolves we will reflect on changing issues around the world but we will contribute a number of proposals that we think are important. They will come through my Department, the Ministry for Finance, the EMC and the views of our colleagues around the table because there are issues that would be opportune for this country to put forward and we will voice those articulately.
Micheál Martin (Cork South Central, Fianna Fail)
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An intergovernmental conference must be called. That is basic in terms of treaty change.
Enda Kenny (Mayo, Fine Gael)
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The Heads of Government are meeting.
Micheál Martin (Cork South Central, Fianna Fail)
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What is the formal Irish position?
Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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If Deputy Martin has a supplementary question he should ask it.
Micheál Martin (Cork South Central, Fianna Fail)
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The Taoiseach acknowledged in the House before the summer that there was a text in existence.
Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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I call Deputy Boyd Barrett.
Micheál Martin (Cork South Central, Fianna Fail)
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He is now saying there was not even though he acknowledged previously that a text was produced by Mr. Van Rompuy.
Micheál Martin (Cork South Central, Fianna Fail)
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He cannot keep on changing his story.
Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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The Taoiseach said that Jean-Claude Trichet ruled out the possibility of bondholders taking some of the burden of a crisis they created. Let us be clear; it is they, the bankers and others, who created it. Did he explain why? What is the rationale for saying that we cannot force bondholders, the financiers and the speculators, to bear the burden? The Taoiseach can correct me if I am wrong, but from what he is saying it seems to me that the reason is because it might spread the contagion into the rest of Europe. But is another way of putting that simply that what they are doing is defending the interests of German, French and British banks who are in fact responsible for the problem? In one sense is it in our interests or in the interests of dealing with the crisis as it is not to acknowledge that they are partly to blame for it and that they must share the burden? In these talks with either Jean-Claude Trichet, the eurozone leaders in general or the EU-IMF, I wonder if there is any discussion about the fact there is a serious body of opinion - not left-wing opinion but main stream opinion, including Joseph Stiglitz, Paul Krugman in The Irish Times today, and the UN Committee on Trade and Development - which is saying the overall policy of prioritising bailing out banks and bondholders has a big cost attached because it imposes austerity on ordinary people. It is not just causing extreme suffering but is also strangling the real economy. It is contracting demand and the entire package will fail because the measures being taken to prop up the bankers and bondholders are ensuring there cannot be economic growth or recovery.
Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Could the Deputy ask the Taoiseach a question?
Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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The question is whether there is any debate. Does the Taoiseach put that point to Trichet or the rest of them - that there is a serious body of opinion saying not just that it is unfair but that we are committing economic suicide?
Enda Kenny (Mayo, Fine Gael)
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Of course there is a discussion about these things and that is why, in part, ECOFIN ministers have been meeting regularly over the summer. It is also a fact that, as the situation evolves and changes rapidly here, at the end of the day politicians will have to make decisions in respect of their governments and collectively within the eurozone and the European Union. That is why each government has a responsibility to implement the decisions taken at the meeting in July. Ireland is doing that. As these discussions continue and as the situation changes, everything is discussed, from the crisis in particular countries in Europe and the impact of this infecting banks if one writes down debt from senior bondholders. However, at the end of the day politicians and leaders have to make decisions. In so far as that is concerned, we will contribute our part.
Nobody has been discussing with me the question of a new treaty for Europe. We have the Lisbon treaty and my view is that should be fulfilled and on a co-operative basis we should implement what we have to do to re-establish the primacy of the European Union, in which I believe very strongly.
Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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In effect, is the ESM and the souped-up EFSM with corresponding or connected centralised economic governance criteria - the so-called six-pack - not a new treaty? It will centralise economic policy as a condition of bailing out countries and give more control to unelected and unaccountable central European authorities to dictate economic policy to countries that are in these mechanisms. The Taoiseach is not directly answering the question as to whether there is any discussion at all about these serious voices which are saying that the austerity strategy may not just be unfair, as many of us believe it is, but also counterproductive. Is there any discussion of that or acknowledgement that these people might have a point?
Bernard Durkan (Kildare North, Fine Gael)
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What is the alternative?
Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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It is fiscal stimulus.
Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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The Deputy should not go astray.
Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Do not continue bailing out the bondholders, but stimulate the economy, which this strategy is failing to do.
Bernard Durkan (Kildare North, Fine Gael)
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Will the Deputy come into the real world?
Micheál Martin (Cork South Central, Fianna Fail)
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That is where one is in an Opposition party.
Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Is there any discussion at all on that?
Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Will the Taoiseach please reply to that?
Enda Kenny (Mayo, Fine Gael)
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The Lisbon treaty set out its conditions clearly and they have been adopted by all the countries. The europack-plus and the six-pack are voluntary commitments involving voluntary co-operation. Participation is a matter for each individual country. Of course, everybody agrees that the indigenous economy here has been very flat for a long time, but it is important to note that the projections for next year are that we will see for the first time an increase in employment and growth. In so far as the preparation of budget 2012 is concerned, we are taking almost €5 billion out of the economy in what is a very difficult situation. Despite the fact that the interest rate reductions will provide almost €1 billion in savings to the Irish taxpayer annually, that does not mean we can turn our backs on sorting out the problem with our public finances. As has been pointed out on many occasions, we are going to do that in respect of getting the debt level down to 8.6%. We are not able to put a figure on what that actually means until all the Revenue and tax information comes to hand.
I agree, however, that it is necessary to stimulate the indigenous economy, which is why the Government made its decision in respect of PRSI, VAT reductions, the minimum wage and a range of other issues.
Joe Higgins (Dublin West, Socialist Party)
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Unemployment went up.
Enda Kenny (Mayo, Fine Gael)
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Between now and the preparation of the Estimates and the budget, the Government will continue to turn its face towards that area. I have never come across more people who actually want to get stuck into creating their own business, employing people and getting on with it.
Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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It will not work.
Enda Kenny (Mayo, Fine Gael)
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Even the Deputy supports that and when the time comes I will be happy to hear his proposals.
Micheál Martin (Cork South Central, Fianna Fail)
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As regards the European Central Bank, why has the Taoiseach not sought a proper meeting either with the outgoing ECB president, Jean-Claude Trichet, or the incoming one, Mario Draghi, to deal with these fundamental issues?
Enda Kenny (Mayo, Fine Gael)
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The Minister for Finance spoke to Mr. Trichet on a number of occasions at recent meetings. I always speak to him when the EU Heads of Government meet.
Micheál Martin (Cork South Central, Fianna Fail)
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I am referring to a separate, bilateral meeting.
Enda Kenny (Mayo, Fine Gael)
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I have not had a separate, bilateral meeting with Mr. Trichet because the Government decided that the Minister for Finance would raise the issue of writing down debt with the governor. He went off to meet him specially and had a serious discussion with him, as well as with Commissioner Rehn. Obviously, when the new ECB president is appointed, we will arrange to meet with him.