Paschal Mooney (Fianna Fail)

I welcome my former colleague in this House, Deputy Mansergh, in his capacity as Minister of State. It is my first opportunity to sit across from him rather than beside him. I welcome his statement clarifying the position of Ireland. I concur with all the comments made so far in speakers' contributions on this debate. I cannot for the life of me understand how any Member of this House or any person outside could feel that the economic situation in Greece, that country's indebtedness and the manner in which it affects the eurozone and the European Union should not be debated as being of important national interest. Those people can answer for themselves.

Much of what was said in the Chamber raises fundamental questions about the stability of the eurozone if not of the wider European Union. Questions were thrown up that have been lying dormant since the debate on the eurozone and the subsequent implementation of the euro in the early years of this decade. They now come crashing around us because of Greek indebtedness. Seen from a general perspective, there is the question of the lack of an integrated formula that would allow the eurozone work more effectively or, as in the current situation, where there is a group of sovereign states. Therein lies a very real problem. Traditionally, and in the current situation, Germany is not in favour of any kind of bailout. It is also tied by the constitutional court which ruled last June that the EU remains an association of sovereign states. That is exactly what it is.

I am grateful to Tony Barber, the bureau chief in Brussels for the Financial Times for a quote which puts in context what the eurozone members are struggling with at present. On 14 January 2010 he stated:"In the context of the eurozone this implies that everything will depend on a superhuman effort from Greece to slash its budget deficit, improve tax collection, purge the public sector of corruption, raise business competitiveness, take the axe to the pensions system and start publishing accurate financial statistics for the first time since independence in 1832." Mr. Barber goes on to say that is a nice thought.

Therein lies the problem. I do not believe the eurozone will bail out Greece. It is evident from the debates and discussions of the past week that what is being attempted is more of the oversight about which Senator O'Toole spoke. Not only is Greece going to lose some of its national fiscal sovereignty in this context, it will also be put under the microscope more than was ever the case before. Already, the Prime Minister, Mr. Papandreou, resents what he sees as external interference. However, the reality not only for Greece but for countries like Ireland — especially countries like Ireland — is that Greece must get its act together. I do not believe a bailout will help. It is obvious from everything we heard earlier that many parliaments in Europe, in particular the German Parliament, are totally opposed to a bailout but, if such were to occur, it would have very serious implications for the remainder of the eurozone.

I turn briefly to the wider context of what is happening in Greece, what the eurozone ministers are attempting to do and what Ireland is doing. I am pleased to note the Minister for Finance, Deputy Lenihan, who was in Brussels in recent days, said that Ireland is now at a different stage to Greece and other weak eurozone members thanks to the stringent austerity measures he took. He said that Ireland is not among the countries now attracting the most adverse comment and this is reflected in the Irish spreads which have remained relatively steady during the recent crisis. This reflects that we are already some way down the path of addressing the three main challenges facing us: continuing to take firm and decisive action to improve competitiveness, restoring stability in public finances and addressing problems in the banking system.

The Greek Government faces very serious difficulties in raising capital from international markets and it is for that reason it has turned to its eurozone partners for guarantees and offers of a bailout. I am pleased also to see that the European Union is holding steady on this. Mr. Hank Paulson, the US equivalent of the Minister for Finance, made a comment when he addressed a Senate banking committee in July 2008. This was in the context of the view being expressed that the eurozone may let Greece default, but it will not allow that happen. He made what I think is an apt comment that if a person has a bazooka in his pocket and people know that, the person with the bazooka will probably not have to use it. It is that sort of encouragement the eurozone members are giving now, based on what they have already proposed, namely, that the IMF and the European Commission be involved in the proposals being put forward to Greece which should get us out of the situation. However, it is a very big ask for Greece.

One aspect of the temperament of the Prime Minister, Mr. Papandreou, about which I read some days ago may be relevant. He belongs to a long-standing political dynasty and both his father and grandfather were former Prime Ministers. When the attack on Greek democracy took place with the introduction of the colonels and the takeover by the military junta in 1967, a group of elite soldiers arrived at the house of the current Prime Minister's father, who was a leading political figure at the time. The current Prime Minister was 13 years of age at that time. One of the soldiers put a gun to his head and said he would shoot him if he did not tell him where his father was. He coolly replied that he did not know where he was. If he had such a spine of steel in that situation, I have every confidence his Greek Government will find its way out of the current situation. If it does not, not only will international investors move in to pick off Greece, they will then start looking around for similar countries.

To reiterate what the Minister for Finance, Deputy Brian Lenihan, said, I think we are in a much better place. Over the weekend, somebody said the acronym in use in recent months, PIIGS, which refers to the economies of Portugal, Italy, Ireland, Greece and Spain, has now dropped one of its "I"s. In all of the international comment over recent weeks, Ireland is not included. On 28 January, Tony Barber, in his column in the Financial Times, suggested that how Greece could dig itself out of the crisis was to study what the Irish Government was doing. He said the Irish banking sector fell into such distress as a result of the global financial crisis that the Government took action. In his opinion, if it had not been for the unorthodox support measure provided by NAMA, it was likely the Irish financial sector would have gone into meltdown. That is praise indeed in the current crisis from a respected international commentator with an internationally respected newspaper. I have every confidence, based on what the Minister of State has brought to the House today and on what the Minister for Finance has been doing in Europe over recent days, that Ireland will not be damaged by what is happening.

The Greek issue must be resolved, but the answer lies with the Greek Government. If there is a combined effort on the part of the European Commission and the IMF and if Greece addresses the structural problems in its economy, we can work our way through the situation. Otherwise, this economy could suffer and none of us wants to see that.