Joe McHugh (Donegal North East, Fine Gael) | Oireachtas source

I thank Senator Bradford for putting down this matter, which is evolving as we speak. He has given a broad and holistic view on this important issue.

Greece remains a full member of the euro area and it is in all our interests that it remains so. However, as the Government has stated on many occasions, as a member of the euro area, each member state has responsibilities and obligations. This is no different for Greece.

The referendum in Greece on Sunday, July 5, resulted in a majority “No” vote, which was a rejection of the prior action list as it stood on 25 June. It should be noted this list was not a final list as the Greek authorities unilaterally withdrew from negotiations before agreement could be reached.While there were still divergences, there was considerable commonality to bridge the gap and agree a single document that all parties could sign up to. The institutions had come forward with a very favourable offer to Greece and would have also addressed future financing needs and the sustainability of the Greek debt, although this had not been discussed or agreed by the Eurogroup. It also included support for a Commission-led package for a new start for jobs and growth and would boost recovery of investment in the real economy. Greece withdrew from the negotiations and called a referendum. As of midnight on 30 June, the second economic adjustment programme for Greece expired along with associated disbursements. Therefore any further financing for Greece would likely be under a new programme with associated conditionality.

Today, the finance ministers of the euro area will meet to take stock of developments, listen to the new Greek finance minister and try to find a way forward. This will be followed by a meeting of the Heads of State and Government of the euro area, the euro summit, in which the Taoiseach will participate. The ball is now in the Greek court.

For recovery of the Greek economy to occur, difficult measures and reforms are inevitable. There is no getting away from this. It is important that the Greek authorities put forward reform measures that will put the Greek economy back on a sustainable path. Ireland is, of course, open to a new programme for Greece, but any programme must be backed by a full memorandum of understanding and a commitment to strong ownership and implementation. Time is running out, as is evident from the extremely difficult situation the Greek banks are facing.

While the governing council of the ECB maintained the level of emergency liquidity assistance, ELA, at just under €90 billion, it decided to adjust the haircuts on collateral accepted by the bank. We have great sympathy for the Greek people and the Minister for Finance has expressed this view on several occasions. He has also been quite helpful to the Greek authorities in moving to the position whereby realistic negotiations were taking place prior to the referendum and stands ready to further these efforts with the new finance minister.

Ireland, together with the other member states, understands and empathises with the difficult situation faced by the Greek people which has been exacerbated by the expiry of the second programme and the current uncertainty created by the referendum. This is why there is still a willingness to negotiate a way forward which takes account of the realities of the situation in Greece and the political priorities of its new government. We have engaged as quickly as possible. It is now up to the Greek authorities to come up with a credible plan which will undo the damage created by this uncertainty and put Greece on a sustainable path of growth.