Simon Harris (Wicklow, Fine Gael) | Oireachtas source

I am pleased to have an opportunity to outline to the House the efforts that are being undertaken by the Irish Government, and our euro area colleagues, during Greece’s current difficult economic times.I thank Senator Bradford for providing me with the opportunity to do so.

I agree with much of what the Senator said. It is important that solidarity is shown in Europe and people walk together. It is difficult to do so, however, when the partner one is walking with leaves the table and runs home, which is what happened at a very late hour on Friday night last. Not only did this take Greece's eurozone colleagues by surprise, it also took some people in the Greek Government by surprise and certainly took many ordinary citizens in Greece by surprise.

Greece remains a full member of the euro area and it is in all our interests that this remains the case. However, each member of the euro area has responsibilities and obligations and this applies as much to Greece as to other members of the eurozone.

I accept Senator Bradford's point about democracy. We will defend to the death the right of Greek people to elect whomever they wish to government. However, all the others around the table also have a democratic mandate. There is no monopoly on democratic mandates when European finance Ministers sit down around the table. The very essence of democracy is working one's way through problems to arrive at a solution.

The International Monetary Fund has confirmed that the €1.5 billion due to be paid by Greece yesterday has not been received and Greece is now in arrears to the fund. This is the first time a developed country has gone into arrears with the IMF in a long time. In terms of the practical implications of this development, Greece can only receive financing from the IMF once the arrears have been cleared.

As of midnight last night, the second economic adjustment programme for Greece expired along with associated disbursements. Nevertheless, there remains time for a deal to be agreed and the door is still open. Greece must put reasonable proposals on the table, however. It is in everyone's interest that agreement is reached.

Senators will be aware of the decision by the Greek authorities to impose temporary restrictions on capital flows. This measure appears to be appropriate in view of the current unique and exceptional circumstances faced by the Greek financial sector. It is, however, causing significant difficulty for Greek citizens. The European Commission confirmed on Monday that the introduction of capital controls by the Greek authorities is justified under the Treaty on the Functioning of the European Union in light of the current circumstances in Greece and with a view to maintain financial stability.

Senators will be aware that the Greek Parliament approved the call for the referendum on the policy conditionality proposals submitted by the institutions. The referendum is expected to take place on Sunday, 5 July 2015, which is after the expiration of the current programme period.

The Government and Irish citizens have great sympathy for Greek people, a view expressed by the Minister for Finance on several occasions. The Minister has also been helpful to the Greek authorities in moving to the position whereby realistic negotiations were taking place. Unfortunately, following months of negotiations between the Greek authorities and the institutions, a substantial easing in the onerous fiscal targets agreed by the previous government and a series of meetings at political level, talks concluded without a successful agreement following the unilateral decision of the Greek authorities to withdraw from negotiations.

Euro area finance Ministers met five times in ten days to discuss the position in Greece. While there were still divergences, there was enough commonality to bridge the gap and agree a single document to which all parties could sign up. This would have been a very favourable offer to Greece as it would have addressed future financing needs and the sustainability of Greek debt. It also included support for a Commission-led package for a new start for jobs and growth that would boost the recovery of investment in the real economy. Any solution must provide Greece with an opportunity to grow the economy again. Greek people need a solution and I believed we could have found one last Saturday.

Ireland, with the other member states, understands and empathises with the difficult circumstances faced by Greek people. These have been exacerbated in recent weeks by uncertainty surrounding the programme negotiations. For this reason, there has been a willingness to negotiate a way forward which takes account of the realities of the circumstances in Greece and the political priorities of its new Government, while also respecting existing commitments. The same process occurred when a new Government was elected here and we managed to reach an agreement.

The Eurogroup is closely monitoring the economic and financial position in Greece. As stated last Saturday, it stands ready to reconvene to take appropriate decisions, where needed, in the interest of Greece as a euro area member. Euro area finance Ministers intend to make full use of all the instruments available to preserve the integrity and stability of the euro area. I note that a conference call is scheduled to take place between euro area finance Ministers this afternoon. I hope progress can be made in this matter. Again, I thank the Senator for providing me with an opportunity to provide the Seanad with an update on the position.