Brian Hayes (Dublin South West, Fine Gael)

We are, however, heading in the wrong direction on the debt; we know that. It will reach a maximum of 118% next year, and the only way it will come down is for the economy to grow. The more growth we have, the smaller the liability as a percentage of the total size of the economy. That is the crisis we face. Inflation is the other way of doing it but we must get those numbers down.

I hear a critique in this House about what is happening in Europe at present but no alternative is being offered, other than one that requires other people to pay the bill. I do not disagree with Senator Cullinane. I would love tomorrow if the European authorities, the ESM, or anyone else decided to fund the banks, although this would require a change in legislation at the least. We would all love that, but who pays for it? The suggestion from Senator Cullinane is that Ireland plc will have this amazing new fund to recapitalise our banks, we will get some of the €43 billion back and everything will be hunky dory. We are not, however, going to contribute to this new fund. Is that really living in the real world? What planet is the Senator living on? I did not mean to say it like that but that is fundamentally dishonest. The notion that a country as indebted as we are can obtain funds from another source without contributing to that source is not living in the real world. The world does not work like that. People must be honest about that.

We can say until the cows come home that we are paying back the German debt, but that does not stack up with the facts of the case. The major part of our debt is nothing to do with banks. It is to do with the collapse in the economy and the transactional taxes disappearing. This hole emerged and someone is funding it. At the moment, broadly speaking, the German authorities are funding our deficit because if we came into immediate deficit, heaven knows the Armageddon that would face this country.

We must be honest about this. Blaming the Germans and other European countries for our current predicament is an interesting narrative but it is fundamentally dishonest and panders to the worst kind of neo-nationalism and politics. I believe the German authorities are grappling with this issue because they must sell this ultimately to their domestic audience, which has become increasingly hostile and eurosceptic.

This is part of a wider project. I know the European way is slow, dreadfully slow. Europe can rightly be criticised for the failure on its part to implement the kind of reforms to which we have all agreed but which have not been implemented. We are a small country and we do not have huge leverage.

After the referendum campaign, I was with my children in Marlay Park on the Saturday. A constituent came up to me and told me he voted "Yes" to stay in the game. I saw that as interesting, that people see this as a gigantic match we are not at the end of but in which we are coming to the end of the beginning, as Churchill famously said. If we are going to get the country to a better place, we must box clever and stay at this. We must also demand, as the Minister for Finance said publicly at the end of the conference call with other eurozone colleagues, that if there are better terms and conditions, we will get them. He made that remark in the course of the eurozone meeting, and told the Irish people that on the Six One News. I am repeating that today. If terms and conditions improve, we will demand those improved terms and conditions for us, too. I know it is frustrating.

That is the point I wanted to make. Senator Cullinane is also being honest in this debate. I recognise that the Sinn Féin position has also changed on this issue. Before the last election, the Sinn Féin spokesman on finance, Deputy Doherty, and the party president, Deputy Adams, spoke about saying "goodbye" to the troika and that we would fund ourselves, that we do not need international money. Since the election, on a quiet news day, that position was changed. The position now is that we will work with the troika to get a better deal. Where did we hear that before? Sinn Féin is not that far away from us, despite the amateur dramatics and the smoke and mirrors, if the truth be told. Once Sinn Féin accepts the troika is here, of course it wants to negotiate a better deal and do the devil and all, but once it is here, it is here on condition. It is here on condition based on conditionality. It will keep giving us the money on a quarterly basis, predicated on our achieving certain objectives. I do not think if we drill through the Sinn Féin position there is that much difference between us.

I know the party opposes section 2 and the Bill and we have the speeches accordingly. If, however, we tease out the Sinn Féin stance on this, the party has moved its battleships, accepting implicitly that if the lender of last resort is in the country, it is here on the basis of conditions to which we and the troika must agree.

I reject the contention that there has been no improvement in the circumstances we face. Our current circumstances are totally different from those of 18 months ago. The reputation of the country, as a small open economy, has been restored. We have a programme that is difficult for our people but we are working through it. Our economy is growing, and will do so ten times faster if the eurozone is restabilised.

Ireland, as a small programme country, has proven that it can secure changes. The Government renegotiated the minimum wage deal agreed by the previous Government for the lowest-paid workers. That happened under the regime of the troika. The Government was able to demonstrate that we could exempt over 330,000 people from the dreaded universal social charge as a result of the programme we are undertaking. It was able to achieve a better deal on the sale of State assets. Previously, in respect of such sales, 100% was sought but we now have a deal in respect of which 50% is sought. We can use the funding available for investment in job creation, which has been negotiated by the Minister for Public Expenditure and Reform, Deputy Howlin.

We will continue to work our way through this. The result of the referendum on the treaty, which was backed by the Government parties and Fianna Fáil, which played a very important role in putting the country first in the campaign, shows that people want to be at the heart of the eurozone because they realise the enormous benefits for the country of being there. They want to remain in the game to ensure we can continue to negotiate a solution to the problem. I believe passionately that people will stick with the programme if they see the country moving towards a better position.

It is the long-standing ambition of the Government to re-engineer the promissory note arrangement, and that work remains. We have had some success this year, including in March through our not having to make the payment and putting it off. The long-standing ambition and first priority of the Government in its negotiations is to ensure that the €28 billion on the Anglo Irish Bank side can be re-engineered so our debt will become more sustainable in the long run. We believe we can secure this deal but it will require other developments. If and when we secure the deal, our position on re-entry to the market will be inordinately better than it is at present. We remain absolutely committed to this goal. I assure Senator Byrne that the negotiations are ongoing. He may not read about them in the paper or see footage of them on the news every day but they are taking place nevertheless in a quiet, deliberate and diplomatic way, and will take place until the country is in a better place.