David Cullinane (Sinn Fein)

This attitude is inherent in the design of the proposed ESM. We should have a financial mechanism on which countries that need help can call for support in difficult times. We also accept that we need a mechanism that protects the integrity of the euro. However, of more importance is protecting the livelihoods and standards of living of ordinary Europeans, be they working or unemployed. However, the ESM as constituted and as outlined in this Bill does not meet these needs.

I will address our five chief concerns quickly. First, there should be an explicit option to use ESM funds to invest in job creation and growth measures as part of a credible deficit reduction strategy instead of maintaining the current focus on austerity. Our European leaders have spoken a great deal about the need for growth. We welcome this and wish to be part of the solution. We must ensure growth across Europe, particularly in Ireland. Continuing austerity would make it more difficult to deal with the economic situation.

Second, there should be an option for direct European Central Bank, ECB, funding of the ESM to provide the necessary firewall to stabilise the euro while limiting the liability of taxpayers and individual member states.

Part of the remit of the ESM is not just to bail out troubled states but to bail out banks. The ESM will be used as a mechanism for states to apply for funding which they, in turn, will give to the banks.

On three days this week, four separate bond payments relating to Anglo Irish Bank and Irish Nationwide will be paid, costing the taxpayers €1.15 billion. I mentioned the emperor having no clothes and we know that Cyprus and Spain need to be bailed out and Ireland is in a bailout programme. Italy may also need assistance. There is no doubt this stability mechanism will not work and it is the wrong approach. It is nonsensical to continue to heap more debt on countries, as we are doing, or seeking countries, especially those in a bailout scenario, to contribute to this fund. We are also calling for a clause to ensure programme countries are not required to contribute to the fund, as is the case with the European financial stability facility, EFSF. It is bizarre that countries in a bailout position are borrowing money to put into the fund from where they will borrow again.

There must be a requirement to carry out strict stress tests and provide for a write-down of toxic debt as a pre-condition for ESM funds being used to recapitalise banks, either directly or indirectly via loans to governments. We could have a position where banks are essentially seeking more money from taxpayers, either directly from the ESM or through the Irish Government repaying bonds. It still amounts to governments using taxpayers' money to put into banks and bail them out. There is no conditionality attached to the process and toxic debt is still serviced, with bondholders receiving repayments with no significant haircuts. Significant haircuts should be part of any solution.

There is a need for greater accountability at EU and member state level, and the immunity granted to the fund and its board members should be removed. Senator Norris raised this point a number of weeks ago, even before the Bill came before the House, when he indicated that there is a democratic deficit and accountability issue. Will the Minister of State respond on why those immunity protections are in the Bill and what they mean?