Paul Murphy (Dublin South West, Socialist Party)
Link to this: Individually | In context | Oireachtas source

3. To ask the Minister for Finance his views on the matter of a proposed European debt conference in the view of the recent Greek parliamentary election. [4708/15]

Paul Murphy (Dublin South West, Socialist Party)
Link to this: Individually | In context | Oireachtas source

This is also to ask the Minister his views on the question of a European debt conference. In particular I ask whether there has been a change of position here from the point of view of the Government. Were the remarks about broad support from the Minister for Finance to the idea of a debt conference wrongly ascribed to him? Was the Tánaiste and Minister for Social Protection, Deputy Joan Burton, wrongly quoted in stating the idea had merit? Is it not the case that a change of position has taken place because political self-interest has come to bear? There is a very serious conflict of interest between the interests of Fine Gael and the Labour Party and the interests of the majority of people in the State. It is not in the interests of the political parties to have success for a Greek strategy because it would embarrass the Government.

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank the Deputy for his question. While the Greek debt to GDP ratio is currently very high, my view is that when countries encounter difficulties, a process of negotiation is always better than one of conflict. Specifically in the case of euro area member states, all programme negotiations have been conducted within the Eurogroup and ECOFIN, with IMF involvement as appropriate. My view is that these are the appropriate fora for resolving outstanding issues such as this.

The vast majority of the Greek debt is official debt and is owed to the IMF and to European taxpayers. Even before we entered a programme, we contributed almost €350 million by way of bilateral loans to Greece. Spain would face a liability of €30 billion if it wrote off its commitments to Greece and the figure for France would be €43 billion. One can see our amount is very small comparatively. These are big issues for big European countries and their taxpayers.

The issue now for Greece is not around cancellation of debt; it is about the affordability of the debt, which means looking at the interest rates and the maturities. The private and public sectors have already contributed to improving the affordability of Greek debt. In the case of the public sector, there are, of course, the options of further maturity extensions and interest rate reductions. No doubt these options will be discussed in due course. The Eurogroup is the appropriate forum in which to consider such options.

If one looks at the Irish situation, we have been negotiating our debt burden all the time. Before Christmas we restructured €9 billion of IMF debt and we will restructure another €9 billion in the first half of this year. We will be able deal with €3.5 billion of the €9 billion tomorrow because the NTMA has the cash. This is not what it raised in the 30 year bond as it had cash at its disposal. All of the legal arrangements have been made for this payment tomorrow. One can see this goes on all of the time. We also restructured the promissory note and the official debt through the extension of maturities and reduction of interest rates.

Let me be clear when I state we will respect the democratically-elected Greek Government. I and my Eurogroup colleagues look forward to hearing the views of the new finance Minister at the next meeting, scheduled for mid-February.

Paul Murphy (Dublin South West, Socialist Party)
Link to this: Individually | In context | Oireachtas source

If the Minister has been following Syriza and the Greek finance Minister, Yanis Varoufakis, as closely as he proclaimed in answer to Deputy Doherty, he will know there is no proposal from Syriza for any taxpayers in Ireland, Spain or anywhere else to take the hit. Its proposal, contained in an academic paper, is for the debt of all indebted countries to be written down to 50% of GDP, with the ECB to take the balance, and it will come back on balance sheets as the debt comes down to a sustainable level of 50% or lower. Does the Minister agree that such a solution, if it were agreed on a European-wide basis, would save the Irish taxpayer €3.7 billion a year, which would go towards major infrastructural projects, house building and job creation? It would be a much better use of the money. It is inexplicable that the Government refuses to take advantage of the political opportunity opened by the election of the Syriza Greek Government to row in behind it and stake a serious demand for a significant write-down of the debt. The only explanation is because it will leave egg on the face of those who said we had a game-changer and had achieved a seismic shift as a result of being good pupils of austerity.

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Different things have been said by the representatives of the new Greek Government during the election campaign and since the election. So far there has not been a consistent set of demands. Different people have said different things, or at least different people have been putting a different degree of emphasis on what they have been saying. We will see what the Greek ask is at the end of the day when it comes to the negotiating forum. There is always an element of what I believe somebody said about President Obama, which is that one campaigns in poetry and governs in prose. We are all familiar with this.

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

That is the Labour Party.

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I would not exonerate anybody. There is always poetry during the campaign and prose when one must govern. Greece is in the prose stage now and we will see the hard proposals. I read with interest the reports of the press conference in London with Chancellor George Osborne and the Greek finance Minister. I thought an interesting set of proposals emerged.

It is incorrect to state a reduction in interest rates would allow us to invest in infrastructural projects. Interest is not calculated in the new expenditure benchmarks in Europe, so whether there was a reduction in interest rates or not it would not free up any more elbow-room for spending on capital in Ireland.

Paul Murphy (Dublin South West, Socialist Party)
Link to this: Individually | In context | Oireachtas source

I was not referring to a reduction in interest rates but rather a reduction in the principal, with the reduction in the total amount of debt to 50% of GDP as per the Syriza proposal. This is not a question about the Greeks seeking a "Greek ask" and we, the Irish as creditors, all of a sudden seeing how we would react to it. It is a question of whether an ask can be made by the 99%, the mass of people in Europe, who have all suffered at the hands of this austerity policy to bail out bankers and bondholders. The mass of people in Ireland should be allies of the people in Greece as we are on the same page. The Government likes to emphasise that Ireland is not Greece and all of the differences which exist. Greece has €100 billion more debt than Ireland but pays only €500 million more in interest last year. We paid €7.5 billion and it paid €8 billion. Our private banking debt as a percentage of GDP in Ireland is 25% whereas the Greek debt is 12.2%. Similarly, all the money that has gone to Greece and Ireland has gone back out to pay the banks and the bondholders. There are differences, but fundamentally people have suffered and it is not sustainable from the point of view of ordinary people to continue the policy of austerity, and have massive primary surpluses targeted in Greece and in Ireland which will only come at the expense of public services, jobs and living conditions.

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Austerity in Ireland ended more than 12 months ago.

The most recent budget imposed no new expenditure cuts or no new taxes, and a significant amount of tax relief was given in the budget, both in terms of reductions in universal social charge and in income tax. Deputy Paul Murphy can keep singing the same song, but it is the hit parade of last year or two years ago. There is no austerity programme in Ireland now. The budget was mildly expansionary and that will be reinforced by reductions in energy prices and by the quantitative easing proposals from the European Central Bank. There will be quite significant stimulus in demand coming through. Anybody one talks to will tell one it is there already on the January pay cheques.

The reason Greece's fundamental statistics, as Deputy Paul Murphy describes them, are lower than Ireland's is that in my time in the Eurogroup three separate deals have been done for Greece. The reason they are paying less interest is they are on an interest moratorium and on their official debt, they are not paying interest until 2023. It also means there is little scope to cut another deal. There is little headroom left, but there is some. The European colleagues have done a lot for Greece, but the Greek position was dire and its economy is a weak economy. I do not want to get into any detail because it is not for me to criticise the present management and the previous management of the Greece economy, but there are difficulties. There are historic difficulties in Greece as well of which the Deputy will be aware.