Michael Noonan (Limerick City, Fine Gael)

I thank all the Senators who participated in this important debate. The Bill is technical and looks complex on first reading. However, the bottom line is simple enough. If Ireland and the other partner countries in Europe fail to legislate to amend the Greek programme to allow a second bailout, the €130 billion that Greece needs during March to avoid default cannot be paid. Senator Reilly is very compassionate about Greece and obviously understands the Greek situation - rising poverty, 50% unemployment among young people and a very high incidence of suicide. We know that Greece is in a bad state, but the solution is not to refuse to give it €130 billion which it absolutely needs. If she wants to show compassion for Greece, she should vote them the money so that the schools and hospitals do not shut and the social welfare programmes are not turned off in the middle of the month.

Senator Bradford described what happened in Argentina, which was as a result of a default. There are witness accounts from Argentina of savings being wiped out completely, people selling their personal possessions on the street and the poor searching the dustbins to try to feed their families over almost a year. There was a similar default in Russia. Elderly people died in the first winter after the default in Russia because they could not heat their homes and could not buy food. The only way to manage such a situation is to make the adjustments gradually. The European partners have provided money to Greece to allow it to make the necessary adjustments over time. If the adjustment needs to be made suddenly overnight or in a month, chaos results. Of course, this €130 billion is being provided to Greece under conditions. One might object to those conditions if one were a Greek citizen. It is €130 billion coming in addition to the €110 billion it got in the first programme. That gives it time to adjust and it is adjusting. There is considerable criticism of Greece but when one considers the fundamentals of what it has done, it has taken action and has made progress, and I hope it continues to make progress. I am not sure where it might end up, but the essential thing for Greece is to give it time at the moment and provide it with the money to allow it to run its services.

Senator Darragh O'Brien had some extraneous questions. AIB is managed by AIB management with David Duffy as the new CEO. The target figure is 2,500, split between early retirements and voluntary redundancies. Some 1,000 - mainly management grades - will be by way of early retirement. The 1,500 will be on a voluntary basis and it is hard to know where they will be, but they will probably be more junior people. The bank expects those redundancies to be voluntary and it is offering three weeks plus two weeks statutory payment per year of service, which seems to be a reasonable package. I wish it every success. It is part of the downsizing of AIB, which became too big and was involved in projects throughout the world that were of no benefit to the Irish economy. As it reduces its loan to deposit ratios and lends less internationally, it needs fewer staff. It is a normal enough process and I hope it will be completed successfully and without too much aggravation. I appreciate the unions' help and co-operation on this. However, it is a matter for the bank management and obviously we are monitoring it to see what is happening.

The Senator asked about the promissory note, which is a medium-term project and nobody should be expecting sudden results. There will be much negotiation before it concludes.

Senator Michael D'Arcy spoke about the Greek situation in general and expressed his strong views. Senator Barrett expressed doubts about whether it would be effective at the end of the day. There is a big international debate in both Europe and the United States on how best to deal with the recession. As it is a presidential election year in the United States, the issue is up in lights as part of the debate. On the one hand, the Democratic Presidency and the people surrounding the president favour demand stimulus through quantitative easing and investment in capital projects - that is the Democratic tradition going back to the New Deal - while, on the other, the Republicans do not believe in it at all and believe it would cause inflation and make the situation worse. They have a different take on what should be done. The lines are drawn fairly clearly along ideological lines. However, Keynes has gone out of fashion in Europe and austerity programmes are dominant in Europe now. However, there is a real debate and one can argue on either side of it, with considerable economic theory to support one's arguments and we will see how it works out. It would be helpful to have more demand stimulus in Europe.