David Cullinane (Sinn Fein)

-----project itself is in the midst of a very real crisis that we all want to see solved in a way that makes life better for citizens, not just banks and bondholders. We want a better solution, a solution that will work. We simply do not believe the solution proposed will work.

The Minister of State is referring to real-world solutions. The need for direct recapitalisation is one. I will get to the point where the Minister of State said we shifted our policy.

If this Bill is passed, the ESM mechanism will apply to us. If it is the case that the Government is to put such an arrangement in place, one must try to change it as much as one can to make the organisation more accountable and better, even if one does not agree with it in its entirety. If the ESM is in place and there are funds available, we should be able to use them to invest in jobs in the economy, not just to recapitalise banks and bail out countries.

We are not just talking about bailing out countries, however. In many circumstances, we are not talking about bailing out individuals but about taking money from a pot to which we contribute, bearing in mind that the Minister of State said we are not living in the real world if we do not make a contribution. In the real world, we do not have money. Therefore, how can we put money into a fund when we do not have it? We must borrow it to get it back.

If banks need to be recapitalised, as in Spain where the recapitalisation figure is approximately €100 billion, the Government must go to the ESM and borrow the money required. The taxpayer is then liable. Essentially, taxpayers are being asked to recapitalise private banks and institutions. That they are asked to do this is morally, economically and socially wrong. It demonstrates that we are not really dealing with the problems in the banks. Are we really asking ourselves why they are occurring and why the banks are in need of recapitalisation? During the course of the campaign before the recent referendum on the fiscal treaty, which was passed, I made the point that one of the failings was that the treaty did not deal with how banks should operate. It forced restrictions on states and did not deal with the restrictions that should be on banks.

There is no discussion whatsoever on how we can regulate the banks properly and ensure that what happened in the past will not recur. There has been no discussion at European Union level; it is all a question of imposing restrictions and brakes on Governments. There is no doubt that some Governments acted very irresponsibly. We need mechanisms that act as checks and balances in respect of what states do. These are real-world issues that are affecting us all. The banks were primarily the organisations that behaved in a most reckless fashion. In this regard, the example of Anglo Irish Bank is the best. It simply engaged in a race to the bottom, borrowed money from the bond markets and used it to give to the golden circle to speculate on land. It all went belly up and we are paying the price. There was no regulation of the banks. All we are doing is setting up a new fund which can be used by member states to put more money into banks, if necessary.

The Minister of State raised the issue of the shift in positions. Everybody's position is changing because things are happening so fast. We did not want the troika arrangement, as we did not want Ireland to lose its sovereignty and a situation where we would end up in a bailout programme. However, we were signed up to it. It is one thing to try to stop something when it is happening, but when one is part of a troika arrangement, there is no way to escape. I am sure the Minister of State will accept that is why our position on this issue has changed. It is a little like how we do not like the ESM, but, if it is in place, we must work within it, as one must be pragmatic and constructive. The only way we can get out of this situation, which the Government states it is trying to do, is by getting back into the bond markets. My party does not believe we will get back into them if the State continues to shoulder more debt.

The Minister of State mentioned a figure of €170 million in respect of the national debt. The Government will borrow more money and put it into the ESM fund. It will pay out more money on bonds. We are not really reducing the deficit as quickly as we want because of the policies which are being pursued which my party believes are counterproductive. It wants Ireland to return to the bond markets and reclaim sovereignty, but we accept that the troika is here and that we cannot wish it away, although both we and the Government did not want it. Unfortunately, it was Fianna Fáil which brought it upon us through the failure of its policies and those of the Green Party. The reality is we are in a bailout programme and the only way we can get out of it is by getting back into the bond markets. My party does not believe in the totality of what is being put before us in terms of what the Government is trying to do in its fiscal and budgetary policies and also the European response to the treaty. While there is some good work being done, we do not believe the totality of what is being put in place by the Government will get us back into the bond markets. We believe strongly - we will see who is proved correct - that we will end up in a second bailout programme.

The Minister spoke about the conditionality being imposed on us as a consequence of the arrangements of which we are part, but he can bet his bottom dollar that if there is a bailout Mark II, the conditionality will be even worse and that those who will suffer and have to pay the price will be the citizens of the State through further tough budgets. We are facing four more tough budgets under the Government. If we do end up in a second bailout programme, no doubt whoever lends us the money - most likely the ESM - will attach conditionality to it and that it will not be good for citizens.