Shane Ross (Dublin South, Independent)
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I move:

"That Dáil Éireann:in view of the imminent danger of Ireland's humiliation in the negotiations with the European Central Bank over the Anglo Irish Bank promissory notes, calls on the Government to:

— make a public declaration that Ireland is unwilling to, and will not, pay the €3.1 billion payment due on 31st March;

— assert that the debt is not the moral obligation of the Irish people; and

— demand from the European Central Bank that a prerequisite to a settlement of the promissory note issue will require a negotiated write-down of the debt embracing fair sharing of the burden across the Eurozone.”

Michael Kitt (Galway East, Fianna Fail)
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There is 40 minutes in this speaking slot and Deputy Ross has 15 minutes. Deputy Ross is sharing with Deputies Mattie McGrath, Maureen O'Sullivan, Healy, Joan Collins and Halligan.

Shane Ross (Dublin South, Independent)
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This could be a defining issue for the fate of the Government and the opinion of people in its performance, and so far the omens are not good. For a long period of time the Government has been conducting a negotiation which has been singularly unsuccessful. There is evidence, from the international media, from Europe and from leaks from the European Central Bank, ECB, that already the Government's proposals have been rejected out of hand by the powers that be in Europe.

It seems that the danger of humiliation before 31 March is extremely acute. The Government is proposing that the promissory notes' repayments should be extended for many years and instead of the Government taking a political hit now, that the children and grandchildren of Ireland should take the hit for them, in other words, they are seeking a solution which spares their own political blushes in the immediate period but means that future generations must pay for the blunders of bankers in the past.

The motion looks for a fundamental change in Government policy in its approach to the Anglo Irish Bank promissory notes. It is wrong for anyone to state, as the amendment does by implication, that it is too late.

In March 2012, a deal was cobbled together at the last minute to save the Government's face. This year there is still time - nearly eight weeks - for the Government to go to the ECB, the Commission, Chancellor Merkel and others and state it has changed its policy, it no longer believes it pays to be craven, to be good Europeans and to be the poster boy of Europe, that it is taking a stand on behalf of the people of Ireland and, for once, it will put Irish people first.

It seems that the negotiations are now in chaos. If international reports are to be believed, only a few days ago - maybe a week or two - the European Central Bank threw out the Government's long-term proposal that there should be a long-dated bond of perhaps 40 years which would extend the loans for a period, which would relieve the Government of embarrassment but which would not make any difference to the capital sum, which we are asking to be changed in this motion.

Perhaps the Minister of State, Deputy Brian Hayes, can tell the House, because there is so little information coming from the Government today, whether a Government plan was torpedoed after 13 months by the ECB within the past few weeks. Did they say, "No, this is monetary financing", in other words, printing money? Did they say, it is not acceptable and to go back to the drawing board? Is the Government in a position where it will come to the Irish people within a few weeks and present a completely new deal as some great triumph?

No doubt a deal will be done but it will be a humiliation for Ireland unless the Government takes note of this motion. What we have seen in the past 13 months, after a series of false dawns, new promises and over-egged puddings, is a pattern of humiliation. It is not only what happened this time last year when we had been promised so clearly that a deal would come and that it would be presented to us, that at the last minute they had to cobble something together. It is the number of deadlines that have been missed as politicians from the other side of the House, Ministers and others, have stated that a deal is nearby. We were promised one in October. We were promised one later. We have been promised optimistic noises. That pattern, I suggest, is about to come to a climax when at the end of this month we get a very bad deal which will be portrayed as some sort of a triumph.

That pattern is being repeated as well in the story of the legacy debt which, in May last, was greeted as a game changer. Ever since then, that pattern has been repeated as the Government has been in retreat in the face of opposition from the Finns, the Germans and the Dutch who have stated that issue of legacy debt is not one on which they share the Government's interpretation.

The chickens are coming home to roast for us because, consistently as a nation, we are back-tracking in our dealings with the European Union and with the ECB. Thirteen months of negotiation have yielded nothing. The Government is in a position where somehow it must come up with something to present as a triumph. It will be interesting to see if the Government can do so.

We on this side of the House are looking for something far more radical. We are looking for the Government to challenge Europe - to say not "Yes" but "No", to say not that we will do what we are told but that we are a nation that has ideas and that stands on certain principles one of which is that this debt, for which the promissory notes are some palliative, is not a debt owed by the Irish people. It is a debt which is owed by the banks, both of which have gone bankrupt, and which the Irish people should not be paying and have no moral obligation to pay.

One need only observe the panic that has existed in political circles in recent weeks to realise that what I am saying is evidenced by statements from Ministers. The Tánaiste and Minister for Foreign Affairs, Deputy Gilmore, went out to South America and was reported there as saying that if a deal was not agreed, it would be catastrophic. He was informally reported to have warned, in various capitals of the world, that if a deal was not agreed, the Government might fall and there would be a general election. Of course, that contrasts strongly with the Minister for Communications, Energy and Natural Resources, Deputy Rabbitte's, statement that a deal would be done. I think Deputy Rabbitte is correct. A deal - the colour of the deal will be humiliating - will be done, but why would a Minister of the Government regard it as a threat to his European partners that the Government would fall? Why should they care? They care because they regard the Government as complicit, an easy mark, and made up of Ministers who negotiate with their hands behind their back and accept.

It is an effective weapon to play, if one is the puppet of European leaders and the people are one's pawns, and that is the position in which, I am afraid, we find ourselves. If the Government's only weapon is to go out and state, "If you let us down, we will go out of power", it is playing the wrong game.

I do not believe Chancellor Merkel, President Hollande or any of the other powerful people in Europe want to see this Government out of power. Why should they? They will never get another Government as compliant to their wishes. It is a pushover in negotiations in Europe not only on the legacy debt but also on the Anglo Irish Bank promissory notes. It is time it stood up for Ireland and said that we are unwilling, as this motion states, and unable as a nation to pay this debt.

The Government will come back and claim that the ATMs will be empty and that there is a threat of terrible economic war from the ECB and Europe. I wonder. The Governor of the Central Bank, Professor Honohan, was asked that question at the Oireachtas Joint Committee on Finance, Public Expenditure and Reform. He said that the ATMs would continue to work. The threat of economic war is one that has never been tested or challenged. However, we want to transfer this problem. We want to say that the debt should be shared among the European nations because it is not solely ours. At the moment the Government's attitude is quite simple. It claims that debt is the debt of Irish people and we accept it. I do not accept it is the debt of Irish people nor do others in our group. We believe it should be shared by the heads of the nations of those who are equally responsible because others were responsible for lending at a banking level, not at a people's or taxpayers' level. It is bankers who were responsible for making these loans and the governments of all the nations of Europe bear a responsibility for this.

We should not be ashamed about asking for a write-off and we should not be intimidated. I am sick and tired of that being painted, in a derogatory way, as default. Let us go in and negotiate it. Let us not pay it because it is not ours. Let us be unashamedly in favour of sharing that debt with others.

We have seen a long pattern of a Government over-egging the pudding. We have seen the hopes of the Irish people being raised extraordinarily high. The statement by Ministers that a good deal would be done is a terrible hostage to fortune. The Government, which has raised people's expectations to such a high level, now finds it may not be able to deliver. There will be a high price to pay if people are disappointed by this because the expectation in people's minds is that if a good deal is done on the promissory notes, relief will come to Ireland's taxpayers and social welfare recipients in the next budget. That patently will not happen if we pursue the course we are pursuing at present. It patently will not happen if we do not get a deal which involves write-off. What is so disappointing about Government policy is that the Taoiseach threw in the towel before he even started and never even looked for a write-off. That means the Government is simply looking to extend and pretend.

I believe we are on the brink of signing up for a very long-term economic disaster. We should think of future generations before we take this extraordinary step. Before we transfer the debt we should think of the consequences for people down the line, some of whom are not even born yet.

I am deeply disappointed by the Government's amendment, which is bland and uninformative in stating: "recognises that the current negotiation approach is the best course of action in order to achieve agreement with our European partners". I want to hear from the Minister for Finance what the current approach is. What has been achieved in the past 13 months? What has the Government got and what will it offer the people before 31 March? I believe we need a radical change in policy - a U-turn that puts the interests of the Irish people first and not those of Europe, which challenges the powers that be in Europe and tells them it is not our debt, we will not pay it and we cannot pay it."

Mattie McGrath (Tipperary South, Independent)
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I am delighted to sign my name to this motion and I compliment Deputy Ross on tabling it and on his contribution. I am delighted the Minister, Deputy Howlin, is in the Chamber to listen. The Government has tabled a feeble amendment to the motion. As I told the Minister's leader a few weeks ago, even Ministers' body language tells the tale that they have thrown in the towel and are not fighting the good fight. They are not wearing the green jersey and they are not delivering.

We have the Presidency of the European Union, on which I wish the Government well. I even got the nice tie in my pigeonhole today but Ministers should be ashamed to wear it because they are not standing up for the people of this country. We heard all about it last year and we heard the deal was applauded. I was in the bar that evening and heard people comment on how excellently the Minister for Finance, Deputy Noonan, had done. We all believed and hoped, but we were sadly let down. The Minister's party leader used chilling words in Chile, but they were not half as forceful as those he used when he was when he was in opposition, when it was going to be Labour's way or Frankfurt's way.

Those who are hurting are the public, especially those who voted in large numbers for Labour and Fine Gael, because, sadly, they have been let down. They do not even see a fight or a bit of gusto. When responding to me during Leaders' Questions recently, the Taoiseach spoke about good speeches from the back of a trailer. He would want to get on a trailer or something else and assert himself. Along with the Minister for Finance and the Minister of State, Deputy Creighton, he needs to tell the other countries that this is not our debt. We are not reneging on anything, and are a proud people and entitled to be respected for that.

This debt was incurred here recklessly by foreign banks of EU countries. When they knew the game was up, they, along with speculators, kept shovelling money in here and they got away scot free. They have been rewarded and will be further rewarded on 31 March if this promissory note is paid. We should really change the date to the following day, which is 1 April, April Fools' Day, because that is what we will be - the fools of Europe and they will be ag magadh fúinn. The Minister is codding the people and letting them down.

We are passing this down not only to our children, but to our grandchildren and their children. What legacy is that for the Minister to leave? I respect his longevity in politics and his contribution. What legacy is that? Is passing this debt down to future generations the legacy the Government wants left after it? Why did it not assert itself and take up the cudgels? Is the best it can say that it will continue negotiations with the European Central Bank and that the current negotiation approach is the best policy? Nobody believes that; the Minister does not believe it. One can only negotiate so far at which point one needs to get belligerent. The Minister needs to fight for the country's interests, which is what he was elected to do and what he is paid to do. The Government should not force the country into penury and destroy the fabric of society with the different pieces of legislation it is introducing.

Deputy Ross referred to a threatened abyss. I do not say we should default; I say we should stress this is not our debt. Half of it is and we will pay that. I was one of the people who, along with the Leas-Cheann Comhairle, was summoned to Dublin some years ago to vote for the bank guarantee, and I did so. When I questioned it, I was told about the abyss, the big black monster and the hole into which we would fall. We did not fall into any hole, thank God. I voted for it and it was the biggest mistake I ever made. It was the sorriest day of my life when I saw the treatment we have got ever since. We had many of the same officials and advisers in the Department and now we are paying outside groups such as Ernst & Young, KPMG and others. It was a disgrace that the then Minister, the late Brian Lenihan Jr., got such advice at the time and then passed on to us. Hindsight is a wonderful thing. It is a bigger disgrace for the present Government to fall into the same trap even though Ministers told the public they would do it differently.

They told the public it would be Labour's way and not Frankfurt's way. Some members even voted against it. They then put on the clothes of their predecessors and are now even better boys in Europe. They are the best boys in the class and have been given awards and kudos in magazines around the world for being such good people. The longer they remain in office the further, not into the black hole of default but into the abyss, they will lead the people. They should consider their positions and go back to the people.

Maureen O'Sullivan (Dublin Central, Independent)
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I refer to a speech made by the Taoiseach in this House in July 2011, which had nothing to do with recession or promissory notes, which states:

A Republic of laws, of rights and responsibilities, of proper civic order, where the delinquency and arrogance of a particular version of a particular kind of 'morality' will no longer be tolerated or ignored.

I want to live in an Ireland of rights and responsibilities. My first question, therefore, is, how is it the responsibility of the Irish nation to pay €3.1 billion for Anglo Irish Bank promissory notes? Second, what right has the Government to take this on when it is obvious it is unfair? Third, is it fair that Irish people should pay for something in which they had no hand, act or part?

We are repeatedly and relentlessly told that the promissory notes scheme is the only means by which Ireland can get back on its own two feet and the backbone of the State, namely, the banks, can be saved. I believe the people are the backbone of this State and they should not be sacrificed for the greed, recklessness and self interest of others. More than enough has been asked of people. Asking the same people to pay more is, in my view, arrogant. Where is there a moral obligation on the State to pay this? Surely the moral obligation is to address the needs of the people. Where is the sense of moral obligation on the part of those individuals from the various banks and organisations, who are household names, to accept responsibility for what they have done? I would like to know if they are in any sense paying for what they have done and the mess they have created. They appear to have lost considerable wealth yet exist on incredible levels of income and resources. Many other people are making sacrifices and losing so much in terms of jobs and houses. We know the effects of this on people's mental and emotional health and how all of this contributes to their sense of powerlessness.

Who are these promissory notes protecting? It appears they are protecting shadowy figures from various banks in Germany, France, Holland or Britain. This is the Famine of the 21st century - there is plenty of food and wealth for some but starvation and poverty for others. I support the notion that it is time for Ireland to declare that this €3.1 billion will not be paid and that it demand a negotiated write-down of the debt, with fair sharing of the burden across the eurozone. I am sure a deal will emerge. However, it will not be enough if not as provided for in the motion. If not, it will be humiliating for Ireland. We deserve far more than a face saving exercise.

It is hard to accept that payment of the promissory notes is required for our economic survival and is the only means of achieving same. They could be rejected and ripped up and we could look at other ways of paying our lawful debts, including by way of the corporate tax or financial transaction tax. There have been similar disasters when property speculators had their way and Governments could have used these two measures rather than impose austerity on the poor and lower income groups. Pursuing these notes is walking around the wealth elephants in the room towards the cents and limited resources of the poor and low and middle income people.

There is a carcass of a building in Dublin central which was supposed to have been the headquarters of the new Anglo Irish Bank. Some people believe should it remain as a reminder of what can and does go wrong. It is interesting that the community which took on that bank remains. We all now what happened to Anglo Irish Bank.

Séamus Healy (Tipperary South, Workers and Unemployed Action Group)
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In 2016, we will commemorate the 1916 Rising and the execution of James Connolly who was as opposed to the capitalist system as I am. Like him, I have no confidence in the rich and political parties they fund to resolve the current crisis in the interest of the Irish people. In Connolly's time, the rules of capitalism were relatively simple, namely, if the wealthy invested wisely they made money; if they made bad investments they lost money. Now we have a Single Market and the wealthy can invest throughout Europe without any barriers. Reagan and Thatcher boasted that capitalism had gotten a new lease of life and that the market was king and would resolve all problems. Due to the God-like properties of the market, only light touch regulation was necessary. In Ireland, former Deputies Mary Harney, Michael McDowell and Charlie McCreevy took up the mantra and former Deputy Bertie Ahern traipsed after them. Privatisation was in and State enterprise was out. State involvement in business was bad and an intrusion. There was no opposition to this from Fine Gael or the Labour Party. This so-called revived capitalism would reward success and punish failure, making us all more efficient and competitive.

Then came the bust and the great apostles of the free enterprise were on their knees to the previously despised State to intervene urgently in the banking business to save their bacon. The market could not be allowed to punish its failure. The rules of capitalism are always changed to suit the wealthy. While profits had been privatised through low taxes on business the debts were now to be nationalised to protect the rich and afflict the common people. Pensioners with a little nest egg in bank shares were wiped out while large investors who invested through bonds and other big money instruments were bailed out. The bulk of this large investment came through banks and finance houses outside this State and the vast majority of those being bailed out by Irish citizens were not Irish.

James Connolly was correct when he said that the capitalists, the ranchers and their hangers-on in the labour movement cannot be trusted with Irish sovereignty and the well-being of the Irish people. Paying the promissory notes is not only a massive drain on Irish resources, it is an act of national betrayal. The €64 billion borrowed by Ireland owing to the banking collapse was used to rescue investments of mainly European banks and finance houses. This debt should be the debt of the entire European financial system and should be neutralised. Anything less than this is a betrayal of Irish sovereignty and will merely transfer part of the European-wide debt onto the shoulders of generations of Irish people while European bondholders laugh all their way to German, French and British banks, where were and are being bailed out by the Irish people.

Government spending between 2008 and 2012 resulted in an increase in debt, from €2 billion to €6.5 billion. This will rise to €8.1 billion in 2013. Money borrowed to cover the debts of private banks should not be repaid. A considerable portion of the debt interest payment arises from this source. Interest on capital repayments will make debt servicing a crushing burden over decades on our children and grandchildren. The ESM made matters worse. An additional €4.5 billion will have to be paid every year from 2015. Any illusory savings through extension of the repayment period on bank debt and replacement of the promissory notes with a long dated bond will be drawfed by these crushing repayments. This Government's austerity policy will ensure that there is no significant growth to ease the burden. The EU must be forced to agree to declare the bank related debt of all countries in proportion to their GDP a burden. It should be neutralised.

This country is in social and economic crisis. The policies of this Government are damaging ordinary people and their families. We have our own Margaret Thatcher here in the form of Minister for Social Protection, Deputy Joan Burton, who is the cause of the same widespread despair and hopelessness in this country as caused by Thatcher in Britain. Children are cold and hungry at school and more are living in poverty. The Minister's attacks on children are surpassed only by her attacks on the elderly. Just like Margaret Thatcher she is dismantling all the benefits that made life bearable for the elderly. The vulnerable, young and old, are being targeted while bankers and bondholders get off scot free. Stopping the repayment of the promissory notes is a first step in the reconquest of Ireland for the people.

Joan Collins (Dublin South Central, People Before Profit Alliance)
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When I last spoke on this issue I referenced in detail the economics of Mr. Michael Taft, which starkly revealed that Ireland was bearing a huge share of the cost of bailing out the system in the EU in that it was paying 42% of the total net cost to all 27 states and a staggering 26% of GDP, the cost of which is €9,000 per person in Ireland as opposed to €190 per person in the EU.

Unless the deal being negotiated changes these figures, it is not a deal in the interests of the Irish people. The Government amendment states it is trying to negotiate the best possible outcome for the Irish people. It is clear now that any deal will not change this reality. Irish people will be stuck with the bulk of the bill in bailing out greedy bankers and speculators in the bond markets. This sell-out of the Irish people cannot be masked by the huffing and puffing of the Labour Party. If it was serious about putting it up to the ECB and the EU Commission it would vote for the motion and stick to its guns and to what it said prior to the election. Otherwise it was elected on a lie.

The Government has repeatedly and publicly accepted the €30 billion payment for defunct banks will be paid. Its real concern is to get a deal which pushes payments out so the Government will not have to fork out €3.1 billion, or possibly €6.2 billion considering the three-card trick it pulled last year, next March and the year after. The same goes for the smoke and mirrors trick with regard to the interest payment on these notes. These notes are used as collateral for money lent to the IBRC by the ECB. The interest rate for the money is 0.75%. A long-term bond to replace the notes would hardly be at a lower rate.

When the Government came to power it had an opportunity to carry out its election promises to burn the bondholders and negotiate a write-down on the bank bailout debt. Instead of showing some liathróidí - as people say - it opted to be the poster child of austerity. The Minister of State must see the reality every day in communities where austerity is breaking the backs of many Irish people. It has been brutal, with long-term unemployment increasing and people feeling the effects of cuts impacting brutally on household economies and the emotions of families. Disabled people have been affected by cuts to grants. Old age pensioners come to our offices pointing out their incomes have been cut by up to 15% through all the little cuts implemented in recent years. The household package was cut and the phone allowance will be cut this year. Limits have been placed on medical cards and they are also affected by the universal social charge. The health service has been cut drastically, with the abominable revelation that St. James's Hospital's budget will be cut by €9 million because it kept within its budget. This is unbelievable. A paltry number answered the Government's call for 1,000 nurses to take up €21,000 jobs. Fair play to the INMO for launching its outstanding campaign. Workers have been hit by the universal social charge, the pension levy, cuts in wages and bin and household taxes and their pension funds have been raided. The property tax is not based on an ability to pay or on people paying stamp duty. A water tax will be introduced which will probably be based on assessment only and not on what the criteria would have been for water meters.

Families live on less than €50 per month. Austerity is impacting more and more on communities. We have yet to see the detail of the finance Bill due before the House on 14 February. Ironically the Minister will introduce a tax on maternity benefit on 14 February. Electricity prices are increasing while the price of food is not decreasing and people are feeling the effects of this. I call on all workers, those unemployed and those affected by the cuts to be out on Saturday, 9 February in Dublin, Cork, Galway, Sligo and Limerick to get behind the campaign against austerity. Do not just stop there; demand of our unions that they move further and demand that the bailout be stopped.

John Halligan (Waterford, Independent)
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The promissory notes were not, as has often been portrayed, the rock to which Ireland clung in its hour of need. On the contrary, the entire eurozone benefited in some way through some financial stability, yet Ireland pays 42% of the total cost of the European banking crisis. If the burden had been shared equally throughout the eurozone it is estimated the amount owed by Ireland would decrease to less than €1 billion.

I am particularly keen to hear the Government's views on the morality of this debt. We can argue back and forth about the legality of restructuring, defaulting on the debt, and about whether it is sustainable to effectively keep burning the millions being saved by pillaging Irish society but the Government has been very quiet on whether there is a moral case for making the ordinary citizens pay the debt of the casino banks. This payment has no basis in equity, social justice or justice of any type. It certainly has no basis in morality. Repaying the gambling losses of investors who backed the out of control bankers who brought the country to its knees and maturity extensions to facilitate more borrowing next year and lumber future generations with yet more overall debt will mean nothing to the approximately 250 people leaving the country every day. Nor will it do anything to ease the burden of the people who are at risk of becoming homeless because they cannot afford to pay the massive mortgages and bank loans borrowed in 2006 and 2007 at a time when the Government would not tell the Irish people the truth about the economy.

The moral question demonstrates just how much the Government cares about the welfare of ordinary Irish people, who are bearing the burden of the mistakes made by international financial markets at a staggering cost of €9,000 per person. Any Minister in touch with the people knows there is widespread social consensus that this payment is unjust and unjustifiable. Parking it for a while will not solve the problem. All that will work is a very comprehensive deal on the debt. The Minister of State, Deputy White, in a debate with me on "The Week in Politics" on Sunday stated there is widespread unity among the people for a deal on this debt. Does he live in the real world? There is widespread unity among the people for a write-down of this debt.

Deputies:

Hear, hear.

John Halligan (Waterford, Independent)
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Let us cut to the chase. Passing the bank debt on to our grandchildren is not a solution no matter how one dresses it up. Any such deal would be pitiful and a humiliating outcome for the Irish people. This moral and unjust imposition of private bank debt on the country and its resources, citizens and future cannot continue and we need to give the Irish people back their dignity.

A group from the 1960s and 1970s called The Moody Blues had an interesting album called "To Our Children's Children's Children". As a legislator in the Dáil part of my legacy will not be that I did not stand up and oppose what the Government proposes to do in the coming 15 to 20 years to our children's children's children, which is to pass on an immoral debt which is no moral responsibility to the children who live here today and those who will be born tomorrow and in years to come. I will not have anything of it. I am delighted to be able to state that at least I will be on record, in ten or 15 years time when the Government sinks this country and its children, as having nothing to do with it.

Brian Hayes (Dublin South West, Fine Gael)
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I move amendment No. 1:

To delete all words after “Dáil Éireann” and substitute the following:"recognises the importance of completing an agreement on the issue of the promissory notes before the next scheduled payment on 31st March, 2013;

recognises that the current negotiation approach is the best course of action in order to achieve agreement with our European partners; and

notes that the Government will continue in its negotiations with the European Central Bank to achieve the best possible outcome for the Irish taxpayer."

Shane Ross (Dublin South, Independent)
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That is nonsense.

John Halligan (Waterford, Independent)
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It is unjustifiable.

Brian Hayes (Dublin South West, Fine Gael)
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A minority of Deputies-----

Mattie McGrath (Tipperary South, Independent)
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Of whom does the Minister of State speak?

Brian Hayes (Dublin South West, Fine Gael)
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I find it interesting-----

John Halligan (Waterford, Independent)
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There is no record of any of us-----

Brian Hayes (Dublin South West, Fine Gael)
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-----having listened patiently for 40 minutes without saying a word-----

Mattie McGrath (Tipperary South, Independent)
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Where are the Minister of State's colleagues?

Brian Hayes (Dublin South West, Fine Gael)
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-----that I am shot down immediately. Those people know who they are and they will not get away with their attempt to rewrite history because-----

Mattie McGrath (Tipperary South, Independent)
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History will not be kind to you.

Brian Hayes (Dublin South West, Fine Gael)
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They want this country to fail because their own political egos are bigger in their minds than the future interests of this country.

Mattie McGrath (Tipperary South, Independent)
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That is a disgraceful comment.

Michael Kitt (Galway East, Fianna Fail)
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The Minister of State has the floor.

Brian Hayes (Dublin South West, Fine Gael)
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The reality is that many people in this country, including Members of this House, have invested a significant amount in failure coming from these talks. They see that this country is getting into a better position and its reputation is improving, but they do not like what they see.

Michael Kitt (Galway East, Fianna Fail)
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I must ask the Minister of State to move amendment No. 1.

Brian Hayes (Dublin South West, Fine Gael)
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I move amendment No. 1:

To delete all words after "Dáil Éireann:" and substitute the following:- "recognises the importance of completing an agreement on the issue of the promissory notes before the next scheduled payment on 31 March 2013;

- recognises that the current negotiation approach is the best course of action in order to achieve agreement with our European partners; and

- notes that the Government will continue in its negotiations with the European Central Bank to achieve the best possible outcome for the Irish taxpayer."

Mattie McGrath (Tipperary South, Independent)
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You are going nowhere.

Brian Hayes (Dublin South West, Fine Gael)
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It would not be appropriate for me in any way to pre-empt the outcome of the discussions with the ECB, especially almost two months ahead of the next scheduled payment of the promissory note. Neither would it be appropriate for me to state that the Government is going to default. Let me be clear - if the motion before the House is passed, it would effectively send a view to the markets that Ireland was on notice of default. To adopt such an approach would jeopardise all of the work that has been done by our people, and their patience and resilience, in recent years.

As the House is aware, this Government has been involved in discussions for some considerable period of time on reducing the burden of debt associated with the recapitalisation of Irish banks. In recent months, the focus of discussions has been on the promissory note arrangement that was put in place to fund the IBRC. This is an arrangement which requires the State to make cash payments of €3.06 billion each year to the IBRC. These discussions are complex.

There appears to be an attempt by one of the opposition parties, Fianna Fáil, either to ignore or forget the origin of the promissory note, so I would like to remind them. The promissory note was a Fianna Fáil design. It was a Fianna Fáil attempt to develop a funding instrument to provide the IBRC with the necessary capital to cover its loan asset book.

Given the massive financial cost that these losses in the IBRC imposed on the State, Fianna Fáil opted to put a promissory note in place instead of government bonds. It is a legacy that we have been left to clean up and that is exactly what we intend to do. The technical details of the promissory note are that the interest rate on the note was set by reference to prevailing government bond yields at the time of the issue. The yields at that time were considerably higher than now. Yields on Irish Government bonds are now considerably lower as the Government has improved Ireland's image abroad and succeeded in attracting international investors back to Ireland.

A further adjustment to the interest rate was also necessary to allow for the interest holiday agreed by the last government. As a result of this interest rate holiday, the rate for the note's remaining term is correspondingly higher at about 8%.

As a non-standard funding instrument the IBRC promissory notes are inadequate and require bi-weekly approval for collateral purposes for the IBRC from the ECB. All parties to the current discussions could gain from an agreed approach to this issue. It is in this context that the Irish Government has been working extremely hard to secure an agreement. I can reiterate that we are optimistic that an arrangement, agreeable by all parties, can be found in the context of the current discussions.

The key objective of any new arrangement will be to make the banking related debt more sustainable. This is central to the Irish position on all negotiations with our European partners. The ongoing discussions should provide the best possible means of dealing with the significant IBRC banking related debt. However, we must all be fully aware that the majority of the national debt is related to the provision of public services and that it is entirely the responsibility of all in this House to make it more sustainable. The Government has real policies to make this debt more sustainable through economic growth and balancing the public finances.

I now turn to the core of the amendment before the House - the Government's extremely constructive engagement with our European partners and how we approach these discussions. I have previously stated that I am working to achieve a solution before the next scheduled instalment of the promissory note. That remains the case. Given the critical point at which we now find ourselves, it would not be in our best interests to declare our hand by drawing lines in the sand, especially lines that could undermine hundreds of thousands of jobs in our economy. Instead we must work towards the best possible outcome for the Irish taxpayer and this is best done by an agreed approach.

The politics of ultimatum is a dangerous business where the options that face this country are limited. We seek agreement, not some unilateral position which is based on playing some gigantic game of Russian roulette with all our futures. It has been through agreed approaches that the considerable achievements of this Government concerning the programme of assistance have been achieved to date. A stated objective of the programme for Government is the overall aim of renegotiating, which must be seen to secure a programme of support and a solution to the banking crisis that is perceived as more affordable both by the Irish people and international money markets. There has already been significant renegotiation of the programme of assistance which has meant real economic improvement and real savings for our citizens. These include reinstatement of the minimum wage - something we were told would not happen before the last election by everyone on the benches opposite and we have managed to reinstate it - and renegotiation of many conditions of the programme. The then Minister for Finance told us that would not happen, but we have made it happen. They also include a reduction in interest rates on EU money, saving almost €10 billion. We are also in negotiation with the Commission on an extension of the maturities. Both of those issues are crucial in terms of the bulk of the money that has come from the EU. There was also the agreement to retain half the proceeds from the sale of State assets for investment in job creation projects; the agreement of 29 June 2012 to break the vicious circle between banks and the State, and the specific reference to improving the sustainability of our programme; the clear recognition of Ireland's special position by our external partners; and a commitment to review our position with a view to further improving the sustainability of a well performing adjustment programme.

An agreed basis for the re-negotiation of the IBRC promissory notes will be the next step on the road to achieving full market access for Ireland by the end of this year. I have already referred to how the Opposition's motion proposes that Ireland engage in a sovereign default. This Government has made it clear that it will not countenance a sovereign default as part of its plan to work our way back to economic sovereignty and fiscal independence.

It has become too easy to suggest that a default provides some sort of economic panacea. Closer examination of the often quoted Argentinian approach, or that of Iceland, are suggested as examples to follow. I find it unlikely that any Member of this House would suggest that the savings and investments of private Irish citizens be wiped out, because this has been the experience of the default in the aforementioned countries.

In case some Deputies think that the Icelandic solution is still worth pursuing, they should fully inform themselves of the structures of the Irish and Icelandic economies and their significant differences. Foreign direct investment plays an important role in our economy, supporting 250,000 jobs directly and indirectly. The Icelandic economy is based on its natural resources of fish and cheap energy. A proposal to follow the Icelandic approach would involve the use of strict capital controls, which would wipe out overnight literally thousands of jobs in the foreign direct investment area in this country.

Capital controls severely affect the normal functioning of a market economy with severe implications for investment, market access and financing costs.

For Ireland, restricting capital controls would restrict investment and make it practically impossible for exporters to conduct their business here. This is especially relevant as Ireland exports more than 100% of its GDP.

Ireland remains open for business and is an attractive place in which to invest. Defaulting would damage investor confidence as a key time in our efforts to turn the economy around and would have a serious impact on job creation. In addition, the wider contagion of a default, with consequences for other State contracts and implications for the financial markets, would be too severe to countenance, particularly given the lengths the Irish State and its people have gone in implementing the adjustment programme over recent years and the extent to which this has been recognised by the markets. The success of Ireland's programme implementation to date has been recognised by the financial markets. Its ten-year bond yields have remained below 6% for a number of months and have been under 5% since late last year, while the NTMA has been engaged with the markets to some extent in recent months. In addition, Bank of Ireland and AIB have successfully re-engaged with the markets on the back of their own asset covered securities. These all are positive indications and the reduction in sovereign debt related to Irish bank recapitalisation, although a small fraction of the overall total, still is an explicit good news story for Ireland. In particular, the sale, for profits of €1 billion, of Bank of Ireland convertible contingent notes earlier this year reflects renewed belief in the sustainability of the Irish pillar banks. Each of these positives reflects our resolve and progress towards emerging successfully from this programme at the end of this year and to resume financing ourselves in the international money markets. If one considers Ireland's own position, we are in receipt of substantial support from the European Union mechanisms under the EU-IMF programme of financial support. This provides funding at rates well below those which would be available were we obliged to fund ourselves in the international money markets. In addition, the ECB continues to provide substantial liquidity support to the Irish banking system. It should therefore be clear that European solidarity is in our interests and to our benefit.

The Government's programme is working. It has met all its targets to date and has met the quantitative fiscal targets. It has implemented financial sector restructuring and has achieved banking recapitalisation at a significantly lower cost than was initially envisaged. It imposed burden sharing on junior debt holders and is implementing structural reforms with a view to enhancing the growth potential of the economy. The Government is introducing fiscal reforms to improve the management and control of the public finances.

The motion before the House tonight seeks to force Ireland's hand in the current negotiations while discussions with our European partners are ongoing. The Government's amendment reinforces the current approach to the issue of the IBRC promissory notes and avoid placing a restriction on the potential benefits of an agreement. The Government continues to engage constructively in these negotiations and views them as a central concern for the Government. It is confident of success and opposes the failure addicts and those opposite who only wish for this country to fail.

Michael Kitt (Galway East, Fianna Fail)
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I call on Deputy Connaughton, who is sharing time with Deputies McNamara and Mulherin.

Paul Connaughton (Galway East, Fine Gael)
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I second the amendment and thank the Leas-Cheann Comhairle for the opportunity to speak on this motion. Two years have elapsed since the Government took office and its fundamental aim at all times has been to stabilise the perilous economic situation in which it found itself, as well as to get Ireland back to a position from which it can emerge from the recession it was in and from which people of all ages can look towards a future with renewed confidence. Stabilising employment levels has been crucial to achieve this and I acknowledge unemployment remains as a huge issue. The Government also has been obliged to stabilise the banks and while the issue last year of the promissory note for the bank formally known as Anglo was averted, this year it must be dealt with before the deadline of 31 March.

If one considers the huge cuts to the budget it has been necessary for the previous Government and the present Government thus far to implement, as well as the toll that has taken on the Irish people, it is important that a deal is struck and that the €3.1 billion promissory note is not paid on 31 March. I agree wholeheartedly with the approach being taken by the Taoiseach and the Minister for Finance in dealing with the ECB and our European partners. It is imperative that Europe not only talks a good game but that such goodwill is turned into a positive outcome for Ireland, which will demonstrate tangible European support to enable Ireland to get back on its feet quickly. I am sure no one in this Chamber has forgotten that even without the promissory note or the bank debt, the country still has a €15 billion deficit that must be addressed. The concern at present is the public has been fed the line that doing or not doing a deal on this issue is the be-all and end-all. The suggestion is that if a deal is secured, everything will be easy thereafter but alternatively, the country will fall apart if no deal is reached. However, this is not the case, as a great deal more must be done in respect of the deficit. A positive deal on the forthcoming promissory note would send an important signal to investors in Ireland and abroad that Ireland is getting back on track, that its debt is sustainable and that it is back in business. Stable public finances are essential for job creation and economic growth in Ireland. However, some Members on the benches opposite appear to have forgotten that we only will be successful in the long term if the international markets believe that our debt is sustainable. This is not about the short term or the lifetime of the present Government but is about putting Ireland back on a sustainable footing for the long term.

It also is very important that our European partners understand fully that this is not simply about getting Ireland a good deal. Instead, it is about Ireland the best deal possible, namely, a fair deal, which sets us properly back on track towards prosperity and growth. It also must be remembered that the money which washed through Ireland during the years of the boom materialised from within Europe and therefore, our European partners must shoulder some of the responsibility when dealing with this issue. I note there has been quite a lot of talk in recent months and years on possible further European integration within the institution, whether a banking union or in other areas. It is important to sort out this problem first. The countries which are in trouble should be put back on their feet first and that conversation can be had further down the line when economic growth has returned to the majority of Europe.

I cannot support the motion before Members this evening because with almost two months of negotiations still to take place, it is completely premature. Moreover, as Members speak, the Minister and the Taoiseach are pushing hard for a positive deal for Ireland. Were such a deal to be concluded, the Minister for Finance would explain it in detail to Members. However, until such time as a deal has been concluded, such speculation is idle. If passed, the motion before the House would undermine completely the Government's negotiating position and would not be in the best interests of the Irish people.

To date, the Government has achieved a number of important successes, including the renegotiation of many of the conditions of the bailout programme, as well as a significant reduction in interest rates on European Union funds. It is all too easy for Opposition Members to be negative at all times. They have the luxury of being able to knock every positive suggestion and to criticise deals yet unmade. It is not their responsibility to make the difficult decisions that must be made to balance this country's budget. They can call for the non-payment of this promissory note safe in the knowledge that it will not fall to them to assess the repercussions of not so doing. I believe that with more than seven weeks remaining before the deadline, the right and proper thing for the Government to do is to get on with the hard behind-the-scenes work of negotiating the best deal possible for Ireland and I wish them well in their endeavours.

Michael McNamara (Clare, Labour)
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I join Deputy Connaughton in commending the current actions of the Taoiseach and Minister for Finance with regard to seeking to obtain a better banking deal than that which Ireland has obtained to date. However, I also commend the actions of the Tánaiste, as a diplomatic initiative and offensive clearly is required to reverse or seek to renegotiate the deal that was agreed by the previous Government in respect of the Anglo promissory notes. If one turns to the actual wording of the motion before Members I note it states, "That Dáil Éireann ... [should] assert that the debt is not the moral obligation of the Irish people". I understand that Deputy Ross may have been the prime mover of this motion and note he moved it this evening. I understand that Deputy Ross worked in more than one stockbroking firm before taking his place in this House and perhaps he still does. My question is, what does morality have to do with the international markets? What did morality ever have to do with the international markets? I fully agree that this bank debt, no more than the bank debt of the pillar banks, is not the moral obligation of the Irish people. However, it is the legal obligation of the Irish people and this sovereign State acts in accordance with its legal obligations. I agree it was a mistake to give the bank guarantee on that fateful night but I do not propose to lecture Deputy Michael McGrath on the mistakes of the past and I certainly hope he will not lecture Members on this side on what the present Government has not achieved, given the enormity of the task facing it when it took office only two years ago.

It is a clear legal obligation on the Irish people to pay the bank debt in the form negotiated, which is the promissory note process. It might be morally repugnant but it is a legal obligation until there is a change. There can be no unilateral change, as unilateral action got us to where we are today. We do not know the truth as there has not been a proper banking inquiry but we have been told the unilateral action was taken by four or maybe six men gathered in Government Buildings in the small hours of the morning, guaranteeing all the bank debt in the country, including that of Anglo Irish Bank, which is the subject of tonight's motion.

The differences between us and Iceland are stark. In Iceland the banks defaulted on their debt and they were then nationalised. In Ireland, we nationalised the debt, and we are now talking about defaulting. It is far too late for this and the horse bolted not two years ago but almost five years ago. We are not talking about the legal obligation of banks but rather the legal obligation of this State. Iceland also sped on its road to recovery by devaluing the kroner, which led to a devaluation of both the savings and debts of Icelandic people. We do not have that option, unless the proposers of the motion are seeking to exit the euro. If that is the proposal, I would like to hear how they will see us trading, given our dependencies on Europe for trade, which are completely different to Iceland.

Iceland has overcome its major hurdles to expect a surplus next year by reducing its deficit. Nevertheless, every effort this Government made to reduce its deficit, including by reducing spending, has been resisted by Deputies like Deputy Halligan, who is very opposed to any reduction in Government spending. Deputy Ross would be very opposed to any increase in taxation because it would affect his constituents. We can all pander to our constituents but we must reduce the deficit, regardless of what happens with the promissory notes, if the country is to have an economic future.

On that basis I cannot possibly agree with the motion, although I agree that the bank debt is not the moral obligation of the Irish people. The rest of the motion is "Puff the Magic Dragon" economics.

Michelle Mulherin (Mayo, Fine Gael)
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I listened to the words of the Minister of State and I fully endorse his statement, along with the comments of Deputies McNamara and Connaughton. We are living in unprecedented economic turmoil, and we are witnessing it on a global scale we have never seen in history. The mettle of many nations is being tested and the challenge we face in this country will bring the fallout as described by Deputy McNamara. We will have to try to bridge a big gap between public spending and what is to be taken into the Exchequer. Aside from the banking issue, we have nowhere to go for money, which can be easily forgotten. We know the bankers caused a problem but this other issue remains.

We are facing these challenges within the European Union and our fortunes are interdependent. Our economies have developed in a way different from history because we are now part of a global village; whatever happens in one economy has a ripple effect on others, as can be seen with the eurozone. There is collateral damage when these issues are not handled correctly, which can be seen with the case of Greece. We do not want to see such events in this country. It is a bit like open heart surgery and we cannot make jerky or rapid movements with the scalpel because it will cause a problem. Everything must be done with a delicate touch. We will either have a smooth course towards the country's recovery or a rough journey if we take on board the ideas behind tonight's motion.

Sinn Féin and others on the other side of the House do not want to face up to responsibilities, which is a disingenuous course of action to take. Whether the responsibilities are moral - or whether they should have been put on people in the first place - is beside the point, and there are legal responsibilities. We cannot have all the benefits of a small and open economy, with foreign direct investment and multinationals coming here to create jobs, while arguing that we do not like the fact that the State signed up to an agreement. We cannot tear that up. Either we are big boys and girls or we are not. This is business and if we want the benefits of business to trickle down to people, either through welfare or taxes, we must know how to do business internationally and particularly with European partners.

The Taoiseach and the Minister for Finance, Deputy Noonan, are taking this approach, for which I commend them. I have the fullest confidence in them and I hope they achieve the deal that is best for this country and which will get the longest term for the debt. I hope we get breathing space that can bring about economic recovery. A special case can be made for our country, as nobody has taken on the burden of banking debt more than our taxpayers. The banking debt is intertwined with sovereign debt, and we have dealt professionally with what is a legacy issue. Whether we like it or not, we pay for the sins of the fathers; this can be seen in my constituency with the Corrib gas field, where things were not done correctly.

I will not repeat the points that have been made. At this time it is imperative that IBRC, the former Anglo Irish Bank, is wound up. It is a dead bank and what else is it doing? At least with the other banks people can see retail or commercial banking activities. I have taken advice on the issue and spoken with bankers and rather than bearing the costs of consultants, staff etc., it should be wound up and dismantled.

Shane Ross (Dublin South, Independent)
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Hear, hear.

Michelle Mulherin (Mayo, Fine Gael)
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There should be an end to that unfortunate saga in our country. The sooner it happens, the better.

Michael McGrath (Cork South Central, Fianna Fail)
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I am glad to have this opportunity, on behalf of Fianna Fáil, to speak to the motion put down by the Members from the Technical Group. I noted the comments of the Minister of State and Deputy McNamara about the origin of the promissory note. I am not in the business of lecturing anybody but I will address the issue at the outset. It is all too easy to point to the bank guarantee of September 2008 as being the cause of all evil with bank debt. As we all know, it was a two-year guarantee and Anglo Irish Bank was nationalised in January 2009, with the action taken with no knowledge of the scale of losses being carried by the bank at the time. The promissory note was put in place in 2010 when the scale of losses emerged, and it was done at a time when in Europe and Ireland there was no bank resolution regime in place to deal with dead banks or defunct financial institutions. There should have been and there is no question that the losses carried by Anglo Irish Bank were far too big for the State to handle.

We must recognise that even since the current Government came to power, there was over €16 billion of unguaranteed, unsecured bondholders left in the system and they will receive every single cent of the money. That will happen because the European Central Bank will not allow this Government, as it did not allow the previous Government, to impose any losses on senior bondholders.

Michael McNamara (Clare, Labour)
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A guarantee is a guarantee.

Michael McGrath (Cork South Central, Fianna Fail)
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That is the bottom line-----

Peter Mathews (Dublin South, Fine Gael)
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It is true.

Michael McGrath (Cork South Central, Fianna Fail)
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-----and Deputy McNamara has walked out because he does not want to listen to a balanced argument or the facts.

My party and I fully recognise the importance of the talks under way between this State and the European Central Bank. Fianna Fáil wants to see the net cost of the bank recapitalisation reduced and we genuinely wish the Minister well in these negotiations. I doubt anybody in the country wants to see Ireland pay this money at the end of March.

On behalf of the Fianna Fáil Party, I recently outlined to the President of the European Central Bank, Mr. Mario Draghi, the case for taking action to reduce the burden of bank debt being carried by Irish people. This is the time for a deal to be done as we will not have a better opportunity to resolve the issue of the legacy debt at Anglo Irish Bank. The momentum that has been building provides us with a once-off opportunity to secure the right deal. Our message to the European Central Bank must be that a deal is needed and it must be the right deal. The Government will not have the luxury of returning to this issue one year from now to restructure this aspect of our banking debt.

A deal can be done now for a number of reasons. First, there is undoubtedly a more pragmatic leadership in place at the European Central Bank under its current President, Mr. Mario Draghi, than there was under his predecessor, Mr. Trichet. Second, the principle of a banking union, including a bank resolution regime, has been agreed at European level. Third, economic recovery has not taken root in Ireland, as envisaged, and our ability to carry bank related debt is weaker than was anticipated. Fourth, Ireland is sticking rigidly to the EU-IMF plan and is in compliance with all of its conditions. Finally, Europe needs a success story and Ireland is its best shot at achieving one.

The Government must engage in intense negotiations over the next eight weeks and this engagement must take place at the highest political level. The Minister for Finance must personally lead the negotiations and must meet the ECB President as often as is necessary before the end of March to secure a deal. Officials acting on the Government's behalf have taken this issue as far as they can and the technical issues are well known to the Government at this stage. The matter has become a political issue and for this reason, the elected Government must drive negotiations with the ECB President.

I do not care if the negotiations go to the wire provided we secure the right deal. The Minister must make the point very clearly to the European Central Bank – I accept this will be done in private – that, in the absence of a deal, there is nothing inevitable about the Government making the €3.1 billion payment at the end of March. He must go further and explain that the economic, social and political reality in Ireland is such that non-payment is a live option for the Government. If I were in the Minister's shoes and the right deal for Ireland was not on the table at the end of March, I would recommend to the Government that the promissory note payments be suspended until negotiations had concluded.

Ireland's case for a deal on the promissory note is both moral and practical. This country has undergone the largest budgetary adjustment compared to all other so-called "peripheral economies", proving both our capability and commitment to facing up to challenges and implementing reforms. More than €28 billion in tax rises and expenditure cuts have taken place. As Deputies are well aware, these have led to a considerable reduction in living standards for the majority of citizens. Pressure on public services has increased and significant hardship is being felt by wide sections of the population, not least by those in unemployment and householders struggling with mortgage debt.

At the time the banking crisis emerged, there was no EU-wide mechanism in place to help deal with the difficulties Ireland faced and to this day an EU-wide bank resolution regime is still not in place. Despite agreement in principle on implementing such a mechanism, none will commence for some time yet. When the Taoiseach was asked why Ireland is a special case and how he is explaining this message to other European leaders, he stated Ireland is "unique" because it had "the European position imposed on it" and this had resulted in the sovereign having to take on the debts of all the banks. In effect, he is arguing that we have a strong moral case to put to our European partners. I say this in full acknowledgement of decisions made by the previous Government.

The promissory note alone comprises nearly half of the €64 billion cost of bailing out the banks. As a result, this "IOU" amounts to 20% of GDP and continues to place an enormous burden on the Irish people. As Deputies are aware, members of the public have displayed a remarkable level of resilience in the face of extremely painful measures but their patience and understanding is wearing thin. There is a widespread view that while people have done all that has been asked of them in terms of measures to return the economy to a sustainable footing, this is not being reciprocated by action from our European partners to underpin what has been achieved to date. As well as the practical case I have outlined, there is a very strong moral case for significant relief on the promissory note.

It is in everyone's interests that Ireland turns out to be a success story and I believe we can be a success. In contrast to all other programme countries, Ireland’s economy is capable of returning to sustainable levels of economic activity. If a country that follows EU-IMF conditions to the letter subsequently fails to successfully return to the markets with its creditworthiness restored, what kind of example will that scenario set for others? Movement on the promissory notes could significantly cut Ireland’s funding requirements in the years ahead as we seek a sustainable return to the markets.

I propose to address the claim that the Government did not pay the promissory note instalment that was due last March. Repeated by a number of Government Ministers recently, this claim is simply untrue. The European Central Bank's only concern last March, and a position it maintains, was that the Irish Bank Resolution Corporation, IBRC, pay off the money it owes the Irish Central Bank. It is instructive to examine the following statement made by the ECB at the time. It states:

It is very important that the Irish state will honour the 3.06 billion euro amortisation of the promissory notes. This will reduce the emergency liquidity assistance which IBRC receives from the Central Bank of Ireland and thus the Eurosystem.

What has been achieved? In essence, the government has delayed paying out the cash for this year’s €3.1 billion but the IBRC (and hence the state) now has to repay Bank of Ireland this amount next year . . . Because the ECB have fully achieved their goal — getting a full €3.1 billion ELA repayment — calling this "a deal" with the ECB is hardly appropriate.

We will quickly find out the market reaction to any deal. Since the summit of 29 June 2012, Irish bond yields have been falling as the market priced in a substantial reduction in our absolute debt levels and the cost of servicing our debt. If, following a deal, bond yields are stable or fall further, we can assume the market believes our debt sustainability has been improved. However, as we all know well, bond yields are remote from the lives of most ordinary citizens. What people are truly concerned about is the scale of tax increases, spending cuts, increased charges and reduced services they face. The Government is planning €5.1 billion in new taxes and cuts over the next two budgets. It is imperative that any deal on the promissory note is accompanied by a solidarity dividend to citizens. For ordinary people, the litmus test of any deal is whether it will result in easier budgets, if it will put more money in their pockets, if the domestic economy will begin to recover and whether money will be available for investment in job creation initiatives.

The Government is planning to take a further €3.1 billion out of the economy in 2014. In cash terms, a deal on the promissory note could conceivably result in a significant reduction in this fiscal adjustment. This would make a real difference, one that people would feel, without compromising efforts to achieve the 3% deficit target by 2015.

In the short term, the true cost of the promissory note is the rate at which the Central Bank borrows from the ECB, that being 0.75% or thereabouts. The rate will not be officially confirmed. While the interest rate on the promissory note itself is high, the interest is paid to a State-owned institution in what is essentially a circular transaction over the fullness of time. Where the cost rises for the State is when it must go to the market to borrow the money required for the annual repayment of the promissory note. The longer we can get the interest rate of 0.75%, the cheaper the overall cost of the banks.

The Minister for Finance has confirmed to us and I am sure others via parliamentary questions that no agreed schedule exists for the Irish Bank Resolution Corporation, IBRC, to pay down the exceptional liquidity assistance, ELA, that it owes to the Central Bank. This is a fundamental point, as it undermines the ECB's argument on monetary financing. "Monetary financing" is an elastic term and the ECB seems to be able to bend it in whatever way suits its agenda at a particular point in time.

Peter Mathews (Dublin South, Fine Gael)
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True.

Michael McGrath (Cork South Central, Fianna Fail)
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The ECB has already extended money to this country through the ELA provided by the Central Bank to the IBRC with no agreed timescale for the repayment of same. As such, we have a legitimate case to make in respect of the issue of monetary financing.

From what we can gather from media reports, the Government's preferred solution is to kick this matter as far into the future as possible via a very long-term bond that is serviced by an annual coupon rate. Such a proposal is consistent with the way the ECB has been interpreting the question of monetary financing under the Treaty on the Functioning of the European Union.

I could go on, but I will not. I genuinely wish the Minister and the Government well in their negotiations. This is a one-off opportunity and Ireland has momentum behind it. The Government has accrued considerable international political support. This now needs to be leveraged. While the ECB guards its independence closely, it is not immune to political influence. If we can get the right deal, it will make a tangible difference to our economic recovery.

Exiting the bailout is one matter, but it will not make much of a difference to people's day-to-day lives. What will make a difference is shaping the fiscal decisions of the House through a proper deal on the promissory notes to take the sharp edge off the next number of budgets. This is eminently doable and I wish the Government well in its efforts in this regard. Speaking on behalf of my party, the Government will receive constructive support if it achieves a proper deal.

Peadar Tóibín (Meath West, Sinn Fein)
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The actions of the Fine Gael-Labour Government will determine whether every person in the State will be saddled with thousands of euro in debt or whether that burden will be electronically extinguished by the Central Bank. The signing of the promissory note has been a disaster for the State. The opportunity cost is significant. The money could have been spent on jobs, hospitals, education, housing, transport infrastructure and Garda stations. The note directly translates into water charges, home taxes and higher rates of PRSI, universal social charge, income tax and VAT on the hundreds of thousands of families living on the edge. The wealth of the nation is being retrospectively swapped for defunct, toxic private debt.

This year, the State is literally falling over the 120% debt-to-GDP sustainability ratio, but neither the Taoiseach nor the Tánaiste can summon the nerve to follow through on the mandate they received at the election to seek a write-down. The reality of people's lives jars grossly with that of our overpaid negotiators, such as the Minister for Finance, who is telling us not to get too excited about the two months remaining in which to get a deal.

Today, I met a student from west Dublin called Seán. He is representative of hundreds of thousands of people who are living on the tipping point. Banking debt and austerity have pared his family's earnings to the bone. He is concerned about whether his family will be able to pay for him to attend a third level college. The fees would tip the family over the edge as regards earnings versus expenditure. Seán asked the question why the Government would pour billions of euro into banks that destroyed the country instead of investing his family's hard-earned tax money in educating the next generation. I could not give him an answer.

In the main, Seán's generation will judge this Government on whether it writes down the debt or shares the burden with a generation that has not even been born yet. Two years ago, the Government parties broadly agreed with Sinn Féin's current position, but the Government's inability to negotiate and its singular strategy of ingratiating itself with the ECB have sorely let the country down.

The Government needs to outline the objectives clearly and to communicate real red lines, pivotal to which is that there should be no deal without a write-down. It must also demonstrate our deeply held intent to reach a resolution on this issue with the ECB. Equally, it must show our preparedness to walk away from the March payment of the promissory note if no fair resolution is forthcoming. If the economic self-interests of larger EU member states are more equal than the economic self-interests of smaller member states, we are in a bad state.

Fianna Fáil made catastrophic blunders in the bank rescue process, but Ireland's total bailout price tag reflects actions compelled by the ECB. Some claim that monetary financing is outside the legal remit of the ECB, but the truth is that the ECB has often tailored its rules to suit circumstances. For example, the bond buying programme, long-term refinancing operations and the ongoing manipulation of collateral requirements have long blurred the line between fiscal and monetary policy.

Most Deputies enter the Chamber with a desire to leave something lasting behind for future generations. Unless the Government gets real about the promissory note, the Minister of State's legacy will be a generation scattered throughout the world and a broken Ireland left behind. Ireland cannot carry this burden by itself.