John Gilroy (Labour)

-----by some type of utopian economic promise from Sinn Féin.

As an act of solidarity we have supported the stabilisation funds and now find ourselves receiving €67 billion. We will hear much fine talk about burning bondholders, walking away from our obligations as a State and perhaps pulling out of the euro but the question remains, and it has not been addressed by those who advocate such a course - perhaps it might be answered soon - as to how we would fund our public services, schools and hospitals and pay our teachers, nurses, gardaí and fire personal. What would happen if we pulled out of the euro to find our debts remain in euros while our wages are paid in a devalued punt? I have heard these arguments put forward as policy with bogus simplicity and dishonest populism. We have heard them repeatedly, including as recently as this morning on the Order of Business. However, we all know that nonsense repeated, no matter how often it is repeated, remains nonsense.

The European Financial Stability Facility Act 2010 passed through the Houses in June 2010 with some amendments tabled by Fine Gael and the Labour Party on the dissemination of information. Like everything, it was opposed by Sinn Féin but there was no great disagreement on either side of the House on the principle involved. If the original Act generated no great political heat on its journey through the Oireachtas, an amending Bill which seeks to expand the provisions of the original Act should pass through the House without, in the words of a former Senator, leaving blood on the blouse.

To expand our guarantee commitments to €780 billion which will allow lending capacity of €440 billion seems prudent as the EU has stated the existing fund is too small. Of course, if Spain and Italy were to follow us into bailout territory, no expansion of this facility would be adequate as the combined indebtedness of these countries is €3,350 billion. The widened scope of activity for the European Financial Stability Facility, whereby it may in exceptional circumstances intervene in the primary debt markets and, more importantly, in the secondary markets, seems to be a reasonable option which will not leave the secondary market operators a free run of the pitch, so to speak. It will allow the EFSF to become a player in its own right which has the potential to support in a wider way countries which are indebted.

The benefits for Ireland are substantial, and we hope everyone here would wish to see Ireland avail of these benefits and not use this debate as an opportunity for political party posturing. That we regret to find ourselves in this position hardly needs to be restated but now that we are here we had better make the best of it. Already we have seen the Government through the Ministers, Deputies Howlin and Noonan, achieve a substantial cut in interest rates with regard to the existing funding of the EFSF worth 2.47%, or €342 million, this year and this will increase to between €800 million and €1 billion as the drawdown continues. Allowing the EFSF to take active part in the secondary bond markets will help to stabilise bond rates for peripheral countries including Ireland. Ireland's ten year bond yields have already decreased from an unsustainable 14% to less than 9%-----