Darragh O'Brien (Fianna Fail) | Oireachtas source

I welcome the Minister to the House and thank him for his contribution. My party supports the Bill as necessary legislation following the passing of the EU stability treaty. I am sure all of us including the Minister would rather this discussion were taking place when certain agreements had been made on the residual banking debt and the break between banking and sovereign debt and that things were clearer. During the referendum campaign a major discussion focused on our banking debt and the fact the sovereign is responsible for it.

On 18 July in this House the Taoiseach was very clear on several issues following the summit on 29 June. Will the Minister give the House an update on a prospective timeframe for the establishment of a single supervisory mechanism for banking regulation in Europe? The ESM seems to hinge on this. Following this, another discussion will have to take place on retrospective recapitalisation of our banks. On 18 July in this House the Taoiseach formally acknowledged this for the first time. He stated: "I simply could not accept a position whereby Ireland would be at a disadvantage for having taken the steps necessary to secure our banking system, both in the interests of our economy but also in the wider European interest, before new arrangements applied." All of us now agree that at the time decisions were taken in a vacuum when there was no EU mechanism. Importantly, the Bill will deal with many of the deficiencies which were inherent in the Stability and Growth Pact and which became effectively unenforceable once France and Germany stated they would not apply to them. What is good about the passing of the treaty is that the rules apply to all states equally.

We all want a better and more transparent budgetary process. In this light, in his statement the Minister alluded to the fact that the establishment of the fiscal council should effectively lead to a more transparent and open budgetary process, something which was promised in the programme for Government. I hope this comes about. Our experience to date with the Irish Fiscal Advisory Council which is in place, albeit on a non-statutory basis, is that anything it has stated has been disregarded not only by the Government, but also by members of some Opposition parties. If we have an independent statutory fiscal council, it is important the Oireachtas and all parties take its advice seriously.

An example is how a transparent budgetary process, which the Minister stated is a commitment in the programme for Government, was applied in the debate on property tax. We have not had a proper debate on the proposed property tax being introduced in the budget. All that was stated by the Minister the month before last was that the details would be announced in early December. This is not a criticism of the Minister. For years our budgetary process has been wrong. We do not have open debate or discourse about the options available. This is a failing not only of the Government, but also of all previous Governments I can remember. We have one big bang approach in early December, which is what leads to the grave uncertainty we find in our domestic market, particularly the Irish indigenous market. Consumer confidence has plummeted again since late September or early October, and this is in anticipation of the budget. I hope the establishment on a statutory basis of a fiscal council will mean the Government and all future governments will engage properly with the public and the Oireachtas, and not only on the basis of a December budget announcement with everything else following quickly to establish changes in early January.

The Taoiseach stated the Ministers for Finance in the Eurogroup have agreed technical discussions on direct recapitalisation of banks through the European Stability Mechanism, which was to start in September. This could put the ESM in a position to decide to recapitalise banks directly once an effective single supervisory mechanism is established. I have already asked the Minister when he believes this single supervisory mechanism will be established. Are we looking for an effective write-down of our debt? Are we looking for retrospective recapitalisation of the money put in by taxpayers to Anglo Irish Bank, Allied Irish Banks and Bank of Ireland? I do not know what our negotiating position is and what we are looking for.

The Taoiseach has said in the other House that we will pay all our debts in full, but he comes into this House and states, rightly, that we should not be disadvantaged on the basis that we took decisions at the time in the interests of the economy and the wider European economy. It is important that people get a view. We were all hopeful that something would happen before the end of the year, and that was mentioned by many Ministers, including the Minister present, as far back as the summer. Where does it stand in terms of the establishment of the banking regulator and the European Stability Mechanism? Does the Government see this process going through 2013, 2014 and beyond? Can we expect a clearer decision from the European Union?

The passing of the Fiscal Responsibility Bill is important because it beefs up the strengths in the eurozone in terms of proper budgetary policy and ensuring deficits do not overrun every year. That is all well and good but legislation such as this is only relevant if it is acted upon properly. The fundamental question the people will ask is whether we are seeing light at the end of the tunnel. There have been many false dawns. I respect the fact the Minister was in a new position and a new Government took over the reins during the negotiations. Nonetheless, there is general frustration about the lack of perceived progress and that the European Union seems to be dragging its feet.

We are talking about the stability of banks in Europe and Ireland and I have made the point that it is clear to me that we have totally and utterly failed to get the banks, especially the two pillar banks, to support citizens. While I welcome that Bank of Ireland yesterday raised ¤1 billion on the markets at a rate of 3.2%, I condemn the fact it raised its variable mortgage rate arbitrarily by 0.5% to 4.5% along with the ICS, while AIB raised also its rate. The problem is that while we can talk about banks, banking regulation, the ESM and the retrospective recapitalisation of banks, nearly one in four people with mortgages is in arrears, people's houses are being repossessed and people who cannot pay their mortgages are faced with paying a property tax in January that we cannot discuss and debate in advance of the budget. I respectfully ask that the banks be hauled in once again and told that they should be grateful for their existence because it is based on the fact the taxpayer ensured they remained in business. I shall not mention salaries and pensions because I am sure that the Minister is sick to his back teeth hearing about them.