Éamon Ó Cuív (Galway West, Fianna Fail)
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Ba mhaith liom buíochas a ghlacadh leis an Aire as ucht teacht anseo um trathnóna agus an cheist seo a thógáil mar tá a fhios agam go raibh sé gnóthach le dhá lá anuas le Comhdháil na n-Airí thall san Eoraip. I thank the Minister for coming into the House because he has been busy for the past few days. First, I wish to register my agreement and support for the Minister in respect of reference years. This has been an important change that has been achieved and I presume that in the case of Ireland, we will go for the 2012 reference year to avoid any dislocation of the market for land. I presume the Minister intends to make a positive statement in that regard in the Dáil today to stop once and for all the crazy prices that are being sought for land because people think there may be a windfall gain for many years to come arising from taking back land or seeking exorbitant prices for its letting.

It would be important to assure the country that if that remains the position next June, that the choice will be for 2012, the Minister will be absolutely adamant that he will maintain that as a red letter issue on which everybody in Ireland agrees.

I am very disappointed with the deal on sugar. I would have thought the Minister would have been able to persuade his colleagues in the Council to adopt the Commission's position, which is to cease the sugar quota in 2015. The Government made revitalising the sugar industry an important part of the programme for Government. I am told it can be done before 2017, if the quotas go. It is disappointing that we are now being told we must wait until 2017 for that.

Patrick O'Donovan (Limerick, Fine Gael)
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He had to clutch at something.

Éamon Ó Cuív (Galway West, Fianna Fail)
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I am addressing the issues.

Finian McGrath (Dublin North Central, Independent)
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It is outrageous.

Éamon Ó Cuív (Galway West, Fianna Fail)
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That we should get a sugar industry?

Finian McGrath (Dublin North Central, Independent)
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The Government is outrageous.

Éamon Ó Cuív (Galway West, Fianna Fail)
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It is. We know that.

The next issue is clarification of the decision about a national capping of the maximum amount of payment to any single farmer. Do I take it that, basically, the only option left as far as the Council is concerned is the capping à la the Commission only on a voluntary basis? If that is the situation, it is very retrograde. Furthermore, I am curious to know what type of battle the Minister waged to achieve even what he was seeking, which is the ability to have a national cap of €100,000 to any single farmer under the forthcoming CAP.

I congratulate the Minister on including the front-loaded or redistributive payment in the suite of measures that are now options in the Council document. Will he give details of whether the agreement specifies the level of redistributive payment that is achievable? That will be very important to protect the small intensive farmers, in terms of ensuring they get a very significant payment but that there is not a knock-on effect whereby the very large intensive farmers must also get it. Was there any minimum or maximum payment agreement? In other words, is there a proposal for a minimum payment in the proposals from the Council or was there any change or amendment of the internal convergence, which is based on the status quo and keeping as much as possible for those who have, and as little as possible for those who do not have? Was there any narrowing of that or is that proposal as intact as it was presented to me last spring?

Olivia Mitchell (Dublin South, Fine Gael)
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The Deputy's time is up.

Éamon Ó Cuív (Galway West, Fianna Fail)
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I have an extra minute for interruptions.

Is the greening optional on an individual basis or on a national basis? Obviously, it is very much in the interests of the large farmers with the very high payments. Will the Minister also confirm the situation with stacking? Will people who are able to stack payments, in other words they did not have the land the last time, be able to re-stack the same payments or does stacking finish with this CAP under yesterday's proposals? In each of these cases, I refer to what the Council has agreed. I realise the Parliament and the Commission can trump the Council on any of these issues.

Olivia Mitchell (Dublin South, Fine Gael)
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The Minister has four minutes.

Simon Coveney (Cork South Central, Fine Gael)
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The agreement on the CAP that was reached last night is a major stepping stone in the negotiations on the reform of the Common Agricultural Policy, which have been ongoing for over four years. Ministers from the 27 member states of the EU accepted a package of proposals tabled by the Irish Presidency and successfully concluded what is known as a general approach on the CAP reform package.

The agreement between the 27 member states is not the end of the road for these negotiations, but it allows the negotiation process on CAP reform to move to the final, so-called "trilogue" stage, in which the Irish Presidency will represent the Council in discussions with the European Parliament and with the Commission. The successful completion of the Council's deliberations means that the Irish Presidency's objective of an inter-institutional political agreement by the end of June remains on target. Moreover, the strength of the qualified majority given by the Council puts the Presidency in a strong position in the negotiations with the Parliament and the Commission.

Last night's outcome was good for the Irish Presidency, but, more importantly, it was good for Ireland. The Council endorsed the principle of flexibility in the way in which direct payments are to be distributed within member states. The compromise on which we secured agreement in principle on internal convergence and the flexibilities surrounding that three weeks ago was agreed and endorsed in full last night. There were no amendments to it in terms of a mandatory minimum payment or the like. However, there are many voluntary options available to countries in terms of how they wish to reshape and redistribute payments, and this country will have to make political decisions once we know what the full tool box is, hopefully at the end of June.

The Deputy has my script so I will answer his questions. The reference year issue is causing many problems on the land rental markets in Ireland, so I was anxious to have an amendment accepted which would give countries an option not just to apply 2014 or 2015 as a reference year, but to apply a past year, such as 2012 or 2013, as a reference year. We now have that flexibility. All I am willing to say at present is that we will give significant consideration to using 2012 as a reference year, but we will not sign off on that now. However, I have been telling farmers repeatedly for the last two years that they should not make significant investment decisions or over-spend on renting land on the assumption that 2014 will be the reference year. I have consistently said that, and now we have the option to use 2012 as the reference year should that be accepted in the negotiations with the Parliament and the Commission. Farmers should reflect on that. Hopefully, it will cool off the rental market. It badly needs cooling because people are involved in a land grab, essentially, for rented land on the assumption that 2014 will be the reference year. I have always cautioned against that and last night is proof of why I did so.

With regard to sugar, if the Deputy knew the lengths we went to last night to get an agreement on sugar, he would realise how farcical his comments are. This was the most difficult issue on which to get agreement. Every member state that has a sugar industry at present, with the exception of the UK, wants to extend sugar quotas until 2020. The European Parliament has already agreed that its position should be to extend sugar quotas until 2020. Essentially, that means they do not end in 2020 but just go on into the next round of CAP. In other words, it would be an indefinite extension of sugar quotas. I took a strong stand against that because countries such as Ireland, Portugal, Slovenia and others would be locked out of sugar production as a result. Instead of getting a compromise that would allow Ireland to apply for some type of small, limited redistributed quota, which would be uncertain, the way to allow Ireland the option of reinstating the sugar industry is to get rid of sugar quotas as soon as politically possible. The soonest date that is politically possible is 2017. It was one of the last things we agreed last night. It was totally unachievable to get an earlier date. If the Deputy was following the discussions, he would have realised that.

On the issue of capping, there are more options on capping than the Commission had proposed, but it is only options for payments above €150,000. As regards the redistributive payment, we are not making any decisions at this stage on whether we will use that option, but it is important to have it. Therefore, when we conclude our negotiations in the co-decision process there is the option of a top-up payment for either the average farm size or up to the first 30 hectares on a farm. We have agreement on that. That is the option for countries. There is no mandatory minimum payment.

We secured practically everything we had sought in the compromise on greening. I believe that was welcomed by the Deputy. It has certainly been welcomed by farmers. We have taken a very pragmatic approach to greening to ensure it is easy to understand and, most importantly, straightforward to implement for farmers.

Éamon Ó Cuív (Galway West, Fianna Fail)
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I will be brief as I understand the Acting Chairman is operating under time constraints.

On the redistributive or top-up payment, is there an upper limit on the amount of money that can be allocated towards this payment? In other words, what percentage of the total pool can be allocated to a top-up payment on the first 30 ha. or 32 ha. as in Ireland's case? While there is not a major difference between 30 ha. and 32 ha., I would prefer if the second figure were used as it corresponds to 80 acres. It would be significant if a limit were to apply to the top-up that may be provided. Is such a limit provided for and, if so, what is it?

I understand there has been some movement on the coupled payment or payment per head. Has an upper limit been placed on this payment? If so, how would it translate into payments per ewe or suckler cow?

Simon Coveney (Cork South Central, Fine Gael)
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On the proposal on the redistributive payment, which is being described as a front-loaded payment, this is essentially a top-up on a farmer's single farm payment for the first 30 ha. or 32 ha. in the case of Ireland if we opt for the full limit of an average area. This is an optional tool we may or may not decide to use.

Éamon Ó Cuív (Galway West, Fianna Fail)
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What is the limit?

Simon Coveney (Cork South Central, Fine Gael)
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I believe it is 20% of the overall envelope but I will have to check the figure.

On coupling, considerable pressure was applied to significantly increase the potential to use coupled payments. The Presidency's proposal, which was the same as the Commission's proposal, was to apply a 5% limit in respect of countries such as Ireland that had decoupled and a 10% limit for other countries that still have coupled payments. We increased the figures to 7% for countries which have decoupled, including Ireland, and 12% for countries that continue to have coupled payments. If we chose to reintroduce coupled payments for certain vulnerable sectors, this proposal gives us an option of having a significant chunk of money available. This is, however, a policy decision that will have to be taken domestically when we know the detail of the final deal on the Common Agricultural Policy.

Michael McGrath (Cork South Central, Fianna Fail)
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The position in Cyprus, a fellow eurozone country, is extremely grave. The country's banks remain closed today and it is uncertain when they will reopen. While the crisis is first and foremost one for the Cypriot people, it could also have major implications for the wider eurozone economy, including Ireland. Nine months ago, in June 2012, Cyprus first signalled that its banks would require a bailout arising from their exposure to the Greek debt crisis. At the weekend, emergency negotiations on Cyprus went down to the wire and resulted in deeply flawed proposals being made. The decision of European Finance Ministers and the troika to raid the private savings of ordinary Cypriot citizens was a serious mistake; they got it badly wrong. Incredibly, the Government welcomed this plan on Saturday morning as positive for Cyprus, the eurozone as a whole and Ireland. The decision to dip into personal savings and bypass the €100,000 deposit guarantee which applies across the eurozone will serve only to undermine the confidence of ordinary savers throughout the eurozone. Not surprisingly, the proposal was roundly rejected by the Cypriot Parliament. Despite reassurances that Cyprus is a unique case, the message that people will have received from the developments of recent days is that bank deposits are no long sacrosanct in the eurozone. A Rubicon has been crossed and a dangerous precedent set.

Given our repeated insistence that corporation tax is a matter for each member state, it is difficult to believe that under Ireland's Presidency the Government agreed to insert a condition in the Cypriot bailout requiring Cyprus to increase its corporation tax rate from 10% to 12.5%. If the European Union under our Presidency does not demonstrate it has the capacity to deal with the crisis in Cyprus without that country having to look east and turn to Russia for assistance, the entire eurozone will have been weakened. Will the Minister give an absolute assurance that there are no circumstances, including if it were to transpire that our banks needed additional recapitalisation, in which our citizens will have their private savings targeted in the manner in which Cypriots have had their savings targeted in recent days?

Simon Coveney (Cork South Central, Fine Gael)
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I share the Deputy's concerns about the plight of Cyprus. Many people view the images from the island with great concern and Irish people can relate to the events taking place in Cyrus given what has occurred here in the past five years. Deputy Michael McGrath is trying to turn a crisis for a small country in Europe into a problem in Ireland. His approach is irresponsible and not founded in fact.

Timmy Dooley (Clare, Fianna Fail)
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The Minister should answer the question.

Simon Coveney (Cork South Central, Fine Gael)
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Let me set the record straight on a couple of issues. There is no evidence to suggest that what is taking place in Cyprus is having any impact in Ireland, whether in the financial markets, for example, in respect of the cost of funds, or on bank deposits. That is a simple fact. It is also a fact that the decision to raid deposits in Cyprus, as the Deputy describes it, was proposed by the Cypriot Government. Whereas it was not possible to put in place a programme with the previous Government of Cyprus, under the new government, an agreement on a bailout programme was reached in the Eurogroup of Finance Ministers chaired by the Dutch Finance Minister, rather than in the ECOFIN meeting which is chaired by the Minister for Finance, Deputy Michael Noonan. The proposal to introduce a one-off levy on deposits of under €100,000 agreed in the Eurogroup meeting was made by the Cypriot Government. It was not forced by other member states, as was proved only a couple of hours ago when the European Commission found it necessary to issue a statement on the matter in response to commentary by people such as Deputy McGrath. The Commission stated:

Regarding the one off levy on deposits BELOW 100.000 €: The Commission made it clear in the Eurogroup BEFORE the vote in the Cypriot parliament, that an alternative solution respecting the financing parameters would be acceptable, preferably without a levy on deposits below 100.000 €. The Cypriot authorities did not accept such an alternative scenario.

Michael McGrath (Cork South Central, Fianna Fail)
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What is the alternative?

Simon Coveney (Cork South Central, Fine Gael)
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We have here a country which made a decision that was not forced on it.

Timmy Dooley (Clare, Fianna Fail)
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Does the Minister believe that?

Simon Coveney (Cork South Central, Fine Gael)
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The difficulty facing Cyprus is the condition, as part of the bailout, that it raise almost €7 billion to trigger a financing mechanism of €10 billion under a programme. It needs to find a way of raising this money and it proposed to do so by imposing a levy on deposits of less than and more than €100,000.

Timmy Dooley (Clare, Fianna Fail)
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The Government supported the proposal.

Simon Coveney (Cork South Central, Fine Gael)
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The proposal was rejected by the Cypriot Parliament and Cyprus is now seeking an alternative means of raising the money. Ireland, as a fellow European Union member state and holder of the Presidency, will monitor the position on a daily basis and assist in this crisis in any way we can, as will the Commission.

Michael McGrath (Cork South Central, Fianna Fail)
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With respect, the Minister fails to appreciate the significance of what transpired in recent days.

Eric Byrne (Dublin South Central, Labour)
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What is the Deputy on about? His party fell asleep on the job.

Niall Collins (Limerick, Fianna Fail)
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From where did Deputy Byrne come?

Timmy Dooley (Clare, Fianna Fail)
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He must be pleased that Russia seems set to bail out Cyprus.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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I ask all sides to refrain from interrupting.

Michael McGrath (Cork South Central, Fianna Fail)
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It is clear from the comments of senior spokespersons of various governments throughout Europe over the past 48 hours that they fully support the proposal to target the private savings of Cypriot citizens as part of the bailout for Cyprus. This proposal has now been rejected by the democratically elected Members of the Cypriot Parliament.

The Minister seems to fail to grasp the key issue, namely, the confidence of ordinary eurozone savers that the deposit guarantee scheme of up to €100,000 will be respected and honoured in all circumstances. There has been a breach of faith in this regard. It was news to me and millions of people across Europe that the guarantee could only be invoked in the event of, as official spokespersons put it, banks failing and that it does not apply now, as the current proposal is a fiscal measure.

The Minister failed to answer my question.

Simon Coveney (Cork South Central, Fine Gael)
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Which was?

Michael McGrath (Cork South Central, Fianna Fail)
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It is important that the Irish people be given an absolute assurance to the effect that under no circumstances will the Cypriot proposal be applied to Ireland if our banks ever require further recapitalisation.

Simon Coveney (Cork South Central, Fine Gael)
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Let me deal with that question first. I should have dealt with it in the first round. I will give an absolute guarantee on behalf of the Government - under no circumstances will the Government look to introduce a Cypriot-style levy on deposits to raise money.

Timmy Dooley (Clare, Fianna Fail)
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Just pension funds.

Simon Coveney (Cork South Central, Fine Gael)
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I have discussed this matter with the Minister for Finance. From the Government's point of view, I am clear as crystal. We will not target bank deposits for any purpose. I cannot be any clearer.

I grasp only too well the difficulties that Cyprus faces. I spent many hours last night in Brussels trying to put a Common Agricultural Policy, CAP, deal together. I spent a great deal of time with the Cypriot Minister, a new Minister who was trying to get the best deal for Cyprus that he could. He told me about the devastation in his country. I understand its situation only too well. What I do not understand is why the Deputy is trying to turn a difficult problem in Cyprus for which we are all trying to find a solution-----

Simon Harris (Wicklow, Fine Gael)
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Hear, hear.

Billy Kelleher (Cork North Central, Fianna Fail)
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Stop.

Niall Collins (Limerick, Fianna Fail)
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For God's sake.

Simon Coveney (Cork South Central, Fine Gael)
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-----into a scaremongering session for Ireland and Irish banks.

Michael McGrath (Cork South Central, Fianna Fail)
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Absolutely not.

Simon Coveney (Cork South Central, Fine Gael)
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The Deputy should be more responsible.

Deputies:

Hear, hear.

Patrick O'Donovan (Limerick, Fine Gael)
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He did not even know the troika was coming.

Timmy Dooley (Clare, Fianna Fail)
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Are difficult questions "scaremongering"?

Simon Coveney (Cork South Central, Fine Gael)
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Deputy Michael McGrath should be more responsible.

Billy Kelleher (Cork North Central, Fianna Fail)
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Assurances from the Government are worthless anyway.

Pearse Doherty (Donegal South West, Sinn Fein)
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Last night, every voting Member of the Cypriot Parliament rejected the demands of the troika and the Eurogroup. To them I say, "Well done". Despite being a small, partitioned island with a population of just over 1 million people, approximately Munster's population, it sent out a clear signal to the effect that it would not be pushed around.

I refer the Minister to the President of Cyprus, who made a televised address to the nation. He is reported as saying that he felt blackmailed into signing up to the deal. That deal was an unprecedented assault on an EU country's sovereignty and a raid on its people's bank accounts. He claimed that he was blackmailed by the Eurogroup, of which the Minister for Finance, Deputy Noonan, is a member. The Eurogroup has crossed the line and the Minister should have said, "Stop".

Patrick O'Donovan (Limerick, Fine Gael)
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Listen to the Deputy talking about blackmail.

Pearse Doherty (Donegal South West, Sinn Fein)
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The bullies got carried away with themselves. We are now in a farcical situation, in that a eurozone country cannot even re-open its banks. Depositors in many European states are afraid because the line has been crossed by the Eurogroup, in that levies can be imposed on depositors.

The Irish Government should not have signed up to this blackmail. For a country such as ours, the corporation tax rate of which has been in the firing line, it is foolish in the extreme to agree to a deal that would have forced Cyprus to increase its rates. Why was the Government a party to forcing Cyprus to raid the savings of EU citizens in order to pay for others' banking mistakes while letting senior bondholders off scot free?

Instead of piling pressure onto the Cypriot people, we should have been standing in solidarity with them and insisting on the full agreement of last June's Eurogroup statement. The European Stability Mechanism, ESM, should have been the vehicle to recapitalise Cypriot banks, not people's savings.

Billy Kelleher (Cork North Central, Fianna Fail)
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Or Russia.

Pearse Doherty (Donegal South West, Sinn Fein)
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How can the Government argue for the retroactive recapitalisation of our banks - we want the €30 billion that we pumped into the pillar banks back - with any legitimacy if we have just agreed that there will not be a separation of sovereign and banking debt in Cyprus and that the Cypriot people will bear the brunt? Does it not make a mockery of the Government's position? How can we claim that our corporation tax rate is sacred if we agree to force Cyprus to increase its rates? The Taoiseach welcomed that statement.

Simon Coveney (Cork South Central, Fine Gael)
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I thank the Deputy. I will provide some clarity on the corporation tax issue. It is important that people not try to muddy the waters. As part of an agreement to finance a programme in Cyprus, it and the other countries in the Eurogroup signed up to an increase in its corporation tax rates. The Deputy will remember that there was significant pressure on Ireland to do the same before, during and after our bailout negotiations. To the credit of the last Government, we resisted that pressure.

People will remember how, as soon as this Government took office, the first challenge to face the Taoiseach in Brussels was the considerable pressure to increase corporation tax rates, given Ireland's vulnerable position. We resisted. We showed that when a country wanted to resist tax measures, it could do so, since unanimous agreement is necessary if a change is to take place. Cyprus decided not to take this option. It decided that, as part of the package, it would increase corporation tax rates. It was entitled to do so.

There is no easy way to enter a bailout programme. Anyone who offers fairytale solutions for recapitalising banks without a cost being incurred by anyone is not living in the real world.

Billy Kelleher (Cork North Central, Fianna Fail)
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The Labour lads tried it for approximately four years.

Michael McGrath (Cork South Central, Fianna Fail)
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Tell that to the Minister, Deputy Rabbitte, who is next to you.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Would you mind?

Simon Coveney (Cork South Central, Fine Gael)
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This is a crisis for a country that is entering a bailout, just as we faced a crisis that was very costly for the Irish people.

Finian McGrath (Dublin North Central, Independent)
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There he goes again, blaming the Opposition.

Simon Coveney (Cork South Central, Fine Gael)
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We are trying to undo some of the damage that was done when those decisions were made. The Parliament in Cyprus has rejected the deal done by its Government and the Eurogroup. I must say that this is understandable, but Cyprus now has a responsibility to find an alternative way to raise money. Those alternatives are being discussed today and will be discussed again tomorrow.

Banks in Cyprus are different from banks in many European countries, given the size of its banking system and the deposits held in same. Compared with the size of the Cypriot economy, its banking sector is approximately eight times larger. Much of that money has come from outside the EU. Indeed, much has come from Russia. It is not easy to apply a normal banking recapitalisation programme to banks that are primarily capitalised with Russian money rather than money from European banks. This complex situation is developing day by day. Countries like Ireland will, in solidarity with countries like Cyprus, search for solutions. If possible, we will try to be helpful in our Presidency, as will the Commission.

There is no easy way out. Cyprus needs to raise significant sums of money to trigger the €10 billion bailout fund on offer. We must monitor the situation and be as helpful as we can be during that process.

Pearse Doherty (Donegal South West, Sinn Fein)
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Cyprus deals in the euro. Last June, there was a seismic shift, as this Government called it, in terms of separating sovereign debt and banking debt. Cypriot banks need billions of euro. This is why the bailout is necessary. It has been agreed that the ESM will be the vehicle to bail out eurozone banks. We are hopeful about getting some of our money back because the ESM did not exist when we bailed out our banks.

Is the Government's argument not undermined if, in respect of a small eurozone nation, it signs up to an agreement under which the ESM will not bail out European banks, last June's seismic shift will be forgotten and the small nation must do it all by itself? The Eurogroup will provide Cyprus with a loan of a maximum amount, but the rest must come from increases in taxation-----

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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A question, please.

Pearse Doherty (Donegal South West, Sinn Fein)
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-----additional austerity for the Cypriot people and the raiding of bank savings. Does this not make a fool out of the Government's position? If a small nation is asked to take the same measures that we were forced to take a number of years ago, how can we legitimately argue for the retroactive recapitalisation of our banks?

Simon Coveney (Cork South Central, Fine Gael)
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It is true that we are looking for solutions to retroactively get a better deal for the Irish taxpayer for the cost of appalling policy and banking mistakes in this country. The ESM does not exist to solve all problems, regardless of the conditions. It is up to the Cypriot Government to make the case and it is then up to member states within the eurozone to consider the case. The ESM is not necessarily the answer to all problems. A case must be made and a case must be won in order for the purpose for which the ESM was set up to be used in terms of recapitalising banks. Clearly, that case has not been made and won in the case of Cyprus. Instead, what has been decided and supported by the new government there is that it would be able to borrow €10 billion on the back of being able to raise €6.8 billion. It had signed up to a plan to do that, which involved taxation and a levy on deposits which people have now rejected. It must now seek an alternative to that and it is looking to the country that is heavily involved in its banking system as a potential funder to do that, and it is also looking at other domestic ways in which it can raise money. Let us give it some time to do that and let us give assistance if and where possible in terms of policy options because we have explored practically every policy option in terms of reducing the impact of bank debt on taxpayers.

As much as the Deputy would like to think so, it is not as straightforward as making the case that because the ESM exists and is set up for the right purposes that there is some kind of simplistic solution to shift bank debt into the ESM, regardless of the complexity of the debt.

Pearse Doherty (Donegal South West, Sinn Fein)
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Raid the savings.

Dessie Ellis (Dublin North West, Sinn Fein)
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The Government should stop paying the CEO of a bank more than €800,000 a year. It is a disgrace.

Simon Harris (Wicklow, Fine Gael)
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What does that have to do with it?

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Deputy Halligan should be allowed to make his point.

John Halligan (Waterford, Independent)
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Thank you, a Cheann Comhairle.

Dessie Ellis (Dublin North West, Sinn Fein)
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The Government would need to cap itself somewhere.

Patrick O'Donovan (Limerick, Fine Gael)
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Deputy Ellis should keep the needs out of it.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Would the Deputies mind not interrupting and give Deputy Halligan a chance to speak?

John Halligan (Waterford, Independent)
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I was contacted in recent days by the owner of a well-known equestrian centre in the south east, Stonehaven. It had run into arrears of €3,000 on a bank loan following a downturn in business. The lady had successfully paid more than two thirds of her repayments last year and continued to make regular, albeit reduced payments, on the loan. However, last week a tractor – crucial to the day-to-day functioning of the business - was repossessed.

I will briefly outline the facts. This was not a company that had washed its hands of debt. It had already paid €42,000 of a €52,000 loan and was making efforts to catch up on the arrears owed despite a substantial decline in business. However, the bank service agent was not happy and, accordingly, arrived in the yard and took the tractor. It is staggering that a viable company that employs 15 people is in jeopardy based on arrears of €3,000 while 167 former bank executives are on pensions of more than €100,000 per annum.

I am in politics for 15 years. I topped the poll twice as a councillor and I have been mayor of Waterford. I am the only Deputy elected from Waterford city. I say that because I meet hundreds of ordinary people – small businesspeople and others in business - every week who tell me that the Government has badly underestimated the anger, infuriation and resentment at how the banks treated people and are still treating people. It is a barometer of what is happening all over the country. Let us cut to the chase - advising banks to issue letters to their senior executives seeking cuts to pensions will not achieve anything. A substantial number of those individuals are responsible for the state of the country.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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We are way over time. Could the Deputy please put his question?

John Halligan (Waterford, Independent)
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They have not taken any hit. Will the Government bring forward legislation to force executives of the bailed-out banks to take a cut in their Rolls Royce retirement schemes? If the Government were to do that the entire country would support it. The Government has repeatedly pointed to the constitutional barriers to the reduction of top-level pensions. Will the Government investigate whether a referendum is required to alter the Constitution in order to make the bankers reduce their pensions? Does the Government not understand what is happening throughout this country?

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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The Deputy is over time. He should please resume his seat.

John Halligan (Waterford, Independent)
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The Government is not listening to what people are saying or it believes the banks.

Finian McGrath (Dublin North Central, Independent)
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Hear, hear.

John Halligan (Waterford, Independent)
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Somewhere along the line something has gone wrong when a business could be put to the wall by a bank because of arrears of €3,000 and 15 jobs could be put in jeopardy.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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The Deputy has made his point. Will he please resume his seat?

John Halligan (Waterford, Independent)
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The banks have busted this country.

Finian McGrath (Dublin North Central, Independent)
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Hear, hear.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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The Deputy should please allow the Minister to reply.

Michael Healy-Rae (Kerry South, Independent)
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He made his point well.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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I did not ask Deputy Healy-Rae for his comments. Would he mind please not interrupting?

Michael Healy-Rae (Kerry South, Independent)
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I am entitled to my opinion.

Simon Coveney (Cork South Central, Fine Gael)
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Deputy Halligan did make his point well. It is a fair point. Many businesses in this country have not got fair treatment from banks in recent years. We are trying to rebuild a broken banking system and to force banks to get back into the banking business. That is something they had moved away from as they moved into the business of speculation which was part of the problem in this country.

I am not qualified to comment on the individual case as this is the first I have heard of it. However, it seems to be totally unreasonable to repossess farm machinery on the back of arrears of €3,000. I assume the case is more complex than that. Deputy Halligan must be joking to suggest that anyone on this side of the House is not familiar with the difficulties faced by small businesses at the moment. Everyone on this side of the House hears those stories all of the time. Given that we are in government people expect us to try to respond to them so we hear the stories as much as the Deputy does. We are more than aware of the situation which is why we have driven reform in the banking system and will continue to set targets and ensure they are met in terms of the level of lending. We will also introduce the necessary legislation to try to ease people’s debt management burdens.

On the issue of pay in banks, it is important to state that in many ways it is a separate issue. If one were cut pay in banks, which many would like to see, it would not necessarily mean one would change banking practice in this country. We must do two things. First, make sure that the demands we make of bankers in this country at a senior level are appropriate to the conditions in which we find ourselves. That is why the Government has not broken the cap it set on bank salaries – unlike the previous Government. There has been much coverage in newspapers on the CEO of Bank of Ireland whose contract was put in place in 2009 when a cap did not apply. Since we took office we applied a cap of €500,000 and will continue to do so.

In recent weeks the Government has also made a clear statement to the pillar banks that we want to see a reduction in the salary costs within the banks of between 6% and 10%. We look forward to proposals in that regard from the banks concerned. I assume senior management in those banks will lead by example on any cuts that will apply in the months ahead.

John Halligan (Waterford, Independent)
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The Minister suggested that I must be joking. It is not a joke. I deal with people on a daily basis whose lives have being destroyed-----

Finian McGrath (Dublin North Central, Independent)
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Hear, hear.

John Halligan (Waterford, Independent)
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-----by the banks. Families and businesses are affected. People have taken their lives because of the banks. The Minister completely avoided the question I asked. I expect that everyone in the House would agree with my call - even members of the Labour Party - for legislation to deal once and for all with how the banks are treating this Parliament with contempt. Will the Government put the question to the people of this country in a referendum if it cannot introduce legislation? The Government should check the position with the Attorney General.

Will the Government, for once and for all, deal with what the banks are doing to people? That is all I am asking. Will the Minister give me a simple "Yes" or "No" rather than a long-winded answer about this and that? Will the Government introduce legislation or offer a referendum to the people if legislation cannot be introduced to reduce the salaries of bankers? What the Government could sensibly do is reduce their salaries and pensions and let the banks go to court. All of the people in Ireland would support the Government in that.

Simon Coveney (Cork South Central, Fine Gael)
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There are two separate issues here. One relates to businesses under pressure and the other to pay levels in banks. We have just had a review of pay levels in banks and actually, for what it is worth---

John Halligan (Waterford, Independent)
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The banks are walking all over the Government.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Deputy, please.

Simon Coveney (Cork South Central, Fine Gael)
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If Deputy Halligan does not want to hear my ---

John Halligan (Waterford, Independent)
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They are walking all over everybody. A girl called to my office this morning at 8 a.m.-----

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Deputy Halligan, please cool down and show some respect.

John Halligan (Waterford, Independent)
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The bank are trying to take her house from her. I am upset because of the cases I am hearing about every day.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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The Deputy may be upset but he must allow the Minister to reply.

John Halligan (Waterford, Independent)
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The banks are walking all over us. Enough is enough.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Thank you, Deputy. You have had your say. Please allow the Minister to reply.

Simon Coveney (Cork South Central, Fine Gael)
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I will reply to the specific question that was asked. My view and that of the Government is that it is not possible to legislate essentially to undo or reverse contracts that have been signed. That is the position with regard to the CEO of Bank of Ireland. Instead, we have asked the banks to come forward with proposals that will reduce salary levels within banks by between 6% and 10%.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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More proposals.

Simon Coveney (Cork South Central, Fine Gael)
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We expect that we will get a detailed proposal on that from the banks in the not-too-distant future.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Not according to a report in today's The Irish Times.