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Dáil Éireann debate -
Tuesday, 18 May 2010

Vol. 709 No. 2

Euro Area Loan Facility Bill 2010: Second Stage.

I move: "That the Bill be now read a Second Time."

The Bill before Members today will enable Ireland to play its part along with all other euro area countries in providing financial support to Greece. Our assistance, in the form of repayable loans, will be channelled centrally through the European Commission as part of an agreed euro area package, together with the International Monetary Fund. It is important to emphasise that this assistance comes with strong conditionality attached. This multilateral loan facility represents just part of a series of decisive measures designed to restore financial market confidence and to project a resolute signal that governments will take all the necessary measures to protect the integrity of both the euro area economy and the euro currency. This support is designed to safeguard the fundamental financial stability of the single currency area. Only in this context can our economic recovery be secured. In common with the position in other euro area member states, people in Ireland can be relied upon and indeed have a vested interest in showing solidarity with our partners in these challenging times.

The reason this debate is taking place today is because, in essence, our Greek partners can no longer borrow at sustainable rates on the international bond markets. The authorities there have requested support from other euro area member states and the IMF. As the financial position of Greece deteriorated in recent months, the heads of state and Governments of the euro area reaffirmed their willingness to take determined and co-ordinated action, if needed, to safeguard financial stability in the euro area as a whole. On foot of these commitments the euro area Finance Ministers agreed on 11 April the terms of financial support to be given to Greece. This was to be implemented through bilateral loans centrally pooled by the European Commission as part of an agreed euro area package, with co-financing from the IMF.

On 14 April the Government approved Ireland's participation in the Greek financial support programme and agreed to the preparation of the necessary legislation to permit the provision of assistance. On 23 April 2010, Greece formally applied for the activation of the euro area support mechanism. At our subsequent meeting on 2 May 2010, eurogroup Ministers concurred with the European Commission and the ECB's assessment that Greece's ability to access funding on bond markets was insufficient and that a loan was needed to safeguard the financial stability of the euro area. The eurogroup Ministers unanimously agreed to activate stability support to Greece through bilateral loans to be centrally pooled by the European Commission. This will comprise an overall aid package of €110 billion over a three-year period, of which €30 billion will be funded by the IMF. This financial support will effectively mean Greece will not need to rely upon the sovereign debt markets for its funding needs for a period of time.

On 7 May the Taoiseach attended a meeting of the Heads of State and Governments of the euro area which endorsed the loan facility for Greece. The Taoiseach confirmed, subject to enactment of our legislation, Ireland's participation in this joint loan facility. Also, on the same day, I signed the intercreditor agreement which will govern our contribution to the euro area response. All these steps are, of course, subject to the enactment of our domestic legislation.

On 8 May, the European Commission signed, on behalf of euro area member states, the loan facility agreement — to which I will return later — which sets out the key terms and conditions of the agreement with Greece. While the first disbursement under this facility was released today, Ireland will contribute to later tranches once all of our national procedures are completed. Today is an important step in this regard.

Since the beginning of the year, the Greek Government has shown its determination to address its fiscal challenges. The Greek Prime Minister has reiterated the total commitment of his Government to the full implementation of these vital reforms. As part of the proposed support package and loan agreements, Greece has entered into stringent commitments to undertake fiscal consolidation measures, implement structural reforms and apply financial stability measures. The main pillar of the Greek authorities programme will be public expenditure adjustments with the aim of reducing the deficit to below 3% of GDP by 2014. In nominal terms this represents public spending cuts of €30 billion over this period. Furthermore, to reduce its debt-to-GDP ratio, Greece will have to maintain a primary surplus on their budget of at least 5% for the next decade.

To assess progress towards achieving these commitments and as a condition of further loan disbursements, Greece will be the subject of continuous appraisal by the European Commission, the IMF and the ECB. Make no mistake, there are no easy outcomes when it comes to restoring sustainability to the public finances, either here or elsewhere.

What are the financial implications of this Bill for Ireland? Our financial support package is in the form of loans which will be repaid as the economic position in Greece improves. Central to the overall support package is the commitment that member states' funding costs are to be met in full. In other words, we will not be financially disadvantaged by these arrangements. Furthermore, while our debt level will rise as a result of this additional borrowing, the financial assistance we provide will not impact upon our general government deficit, as it is classified as a financial transaction. A further safeguard underpinning the entire process is that if any euro area member state should encounter higher funding costs than those charged to Greece, there are provisions for these additional funding costs to be recouped. In present circumstances that is most unlikely for Ireland. The NTMA had a successful bond issue this morning of €1.5 billion and it was oversubscribed more than three times.

EU Commissioner Rehn has provided a further reassurance on these important elements of the financial support programme. He has confirmed that there will be no loss to eurozone taxpayers arising from the provision of these loans. In addition, from a budgetary perspective, these arrangements will be taken into account by the Commission in its fiscal surveillance procedures.

Based on the euro area contribution of €80 billion, Ireland's share, which is based on the ECB paid capital, will be just less than 1.64%. Payments will be made on a phased basis and, as such, there is a likelihood that there might be some "frontloading" of our overall contribution. That said, our overall contribution is anticipated to be about €1.3 billion. To allow scope for internal rebalancing within the loan facility, the text of the Bill provides for a precautionary upper limit of up to €1.5 billion.

The overall financial support agreement allows for a loan facility to Greece for the next three years while the component loans cannot exceed a term of five years. When all the funds have been paid back to the participating member states, the mechanism will cease to exist.

The main proposals contained in the Euro Area Loan Facility Bill are intended to provide for Ireland's participation in the euro area loan facility to Greece subject to the terms of the loan documentation; payments to be made from the central fund in respect of Ireland's share of the euro area funding and that such payments be based on our ECB paid capital key of 1.64% and subject to an overall limit of €1.5 billion; the receipt into the Exchequer of interest payments and repayment of principal amounts of the loan funding and any related receipts; and annual reports on expenditure and receipts to Ireland under the loan facility to be laid before Dáil Éireann.

In legislative terms this is a relatively straightforward Bill containing half a dozen sections. Section 1 provides detail on the definition of the various technical terms contained within the Bill. Section 2 provides for payments from the central fund subject to the terms of the inter-creditor and loan facility agreements. These agreements are appended in Schedules 1 and 2. Section 3 provides for the crediting of the Exchequer with moneys received on behalf of the State in connection with the loan facility. Section 4 provides for annual reports on payments made and received to be laid before Dáil Éireann. Sections 5 and 6 cover expenses incurred in the administration of the Act and its short title respectively.

I wish to turn briefly to the agreements and the related memorandum of understanding, which, while not part of this Bill, has been laid before the House. Schedule 1 is the inter-creditor agreement which I signed on behalf of the State on 7 May. It provides that the European Commission will act on behalf of the euro area member states in the management and administration of the pooled bilateral loans for Greece, with the ECB acting as paying agent. It comes into effect once the European Commission receives a commitment confirmation from a critical mass of at least five member states and two thirds of the total commitment amount.

Schedule 2 is the loan facility agreement between the euro area member states and Greece which sets out all of the key details relating to the terms and conditions. The European Commission has been entrusted by the member states to coordinate and manage the pooled bilateral loans to Greece.

The memorandum of understanding sets out the policy considerations required of Greece. It has been laid before the Houses. Briefly, it contains three elements: The memorandum of understanding on specific economic policy conditionality specifies detailed economic policy measures that will serve as benchmarks for assessing policy performance in the context of the quarterly reviews under the assistance programme. The memorandum of economic and financial policies outlines the economic and financial policies that the Greek Government and the Bank of Greece will implement during the remainder of 2010 and in the period 2011-14 to strengthen market confidence in Greece's fiscal and financial position. The technical memorandum of understanding sets out the definitions surrounding the performance criteria and various target indicators. It also describes the methods to be used in assessing programme performance and the various information requirements to ensure adequate monitoring of the targets. Ongoing compliance by Greece with the terms of the memorandum of understanding will be a prerequisite for the drawdown of the loan facility.

In the context of a perceived background risk of contagion from Greece to other member states, the Ecofin Ministers decided to establish a comprehensive package of measures including the establishment of a European financial stabilisation mechanism. This is based on Article 122.2 of the treaty which provides for financial support to member states in difficulties caused by exceptional circumstances.

Under this mechanism, an initial €60 billion from the overall EU budget can be mobilised very rapidly if required. Complementing this, it is proposed that euro area member states, including Ireland, will make up an additional €440 billion in loan guarantees through a special purpose vehicle in accordance with our ECB capital participation. The IMF will also participate in the overall financing arrangements and is expected to provide in the region of up to €250 billion. Separately, the ECB will make appropriate interventions in the debt securities markets if necessary. The governance arrangements of this stabilisation mechanism, in particular relating to a possible activation of support, have yet to be determined but they will be similar to those in the Greek case. It is likely that this mechanism will also require legislation, and in my view it will require legislation. As I indicated, the ECB can make appropriate interventions in the debt securities markets if necessary, and has made such interventions. ECOFIN Ministers also reiterated their commitment to ensure fiscal sustainability and enhanced economic growth in all members states. It was agreed that where warranted, plans for fiscal consolidation and structural reforms will be accelerated across the full eurozone.

To advance this objective, last week the European Commission brought forward various reform proposals to reinforce economic co-ordination and to ensure that the budgetary policies of member states do not undermine the economic and financial stability of the euro area. These will form the basis for further discussion by the task force, chaired by EU President Van Rompuy. I will attend the first meeting of this task force which is scheduled for this Friday. These proposals mark the beginning of discussions on these issues. Like most Commission documents, it is designed to float ideas and stimulate debate. Any policy proposals arising from it will have to be ultimately agreed by the member states. However, to suggest, as some did last week, that these proposals represent a dilution of our sovereignty over taxation matters is, at best, mischievous.

The enhanced co-ordination recommended by the Commission is designed to assist the member states to be better prepared for any future crises. We have all seen over recent weeks how a speculative attack on one member state has reverberations for the economies of all member states in the eurozone. For that reason, we all have a shared interest in increased co-ordination throughout the zone.

Other initiatives decided upon by the Council relate to regulatory and supervisory reform of financial markets, including the derivative markets and looking at the role of ratings agencies. Work is continuing on other proposals including the possible introduction of a stability fee which will ensure that the financial sector will, in future, pay its share in the event of another financial sector crisis.

I wish to discuss our economic prospects, particularly as we are committed under this Bill to borrow an additional €1.3 billion. We are well aware of the enormous challenges that a small economy can face during difficult and turbulent economic times. However, there are welcome indications that we are beginning to turn the corner. Recent economic data and a range of other indicators show that the economy is stabilising. Consumer sentiment is strengthening and we see clear evidence of increased activity in the motor trade and retail sales sectors. Government policy measures in the most recent budget have helped restore confidence. In addition, industrial production data and other leading business indicators are also showing signs of improvement. My prediction in December's budget that the economy would bottom-out by mid-year and that positive growth would resume in the second half of this year is being borne out. Most economic commentators now share my Department's forecast. In fact, many are more sanguine about our economic prospects.

A number of key elements underpin the Government's approach to addressing our economic challenges, namely, the restoration of stability to the public finances, the repair of the banking system and regaining our economic competitiveness. We have demonstrated our resolve to restore sustainability to the public finances. We have shown our ability to manage our budgetary and economic affairs in a prudent, credible manner. We will continue to implement our plan to bring the public spending deficit below the 3% required by the GDP stability and growth pact threshold by the end of 2014.

The most recent set of Exchequer returns covering the period to the end of April were in line with expectations and show that the action taken by the Government in managing the public finances is working. The €3 billion adjustment for next year's budget will challenge us but we will achieve it because we must, because it is the right thing for our country. Our focus now is to continue to engender confidence in households, in the domestic business sector and in the international investment community by adhering to our stated plan and showing that we can look after our own affairs.

Recent developments such as those which gave rise to the Bill before us today highlight the need for us to stick with our plan. The difficult measures the Government has taken in the past two years have been vindicated. If we had not taken this tough action we would now be in the unenviable position of having to take even harder measures to stabilise our economy than those now being put in place by Greece.

I have outlined for the House the background to this Bill. The action it proposes is based on the principles of solidarity and responsibility which lie at the core of monetary union membership. The support the euro area members are prepared to give to Greece will be of benefit to us all. What is at issue here is the financial stability of the euro area and the principle of European solidarity. I hope we can have an informed and constructive debate on this Bill and I commend it to the House.

I welcome the Bill, and Fine Gael will support it on Second Stage. Of course we recognise this is of significant cost. It will cost €1.3 billion, which will raise our public debt by almost 1% of GDP. There is also an additional €7.2 billion guarantee into which the Minister is entering on behalf of the Irish taxpayer. The entire package, at €8.5 billion, is of significant proportions. There is an important element to this debate, which is whether it will work. This is the most central aspect we must debate.

In a crisis there is an instinct to adopt a plan and then demand unswerving commitment to it regardless. Often, the reaction is to brand people who question it as heretics, unpatriotic or populist. Perhaps that instinct is understandable. However, to ensure that the EU initiatives succeed there must be robust scrutiny. I welcome the Minister's willingness to enter into robust debate on this because it is an important debate; perhaps it is one of the most important debates we will have in the context of the development of the European Union.

We need to realise the eurozone is in deep crisis because of design flaws when it was first put in place. Those design flaws were not carefully watched after it was launched and this has developed into a full-blown crisis. We need to understand what went wrong before we set out a firm and clear solution. A number of things went wrong, as the eurozone embraced a range of economies which could not have been said to be convergent. There are clear structural imbalances between some of the economies. Germany runs huge trade surpluses with very tight control on wages and costs and is very competitive on international markets. It is rapidly expanding its exports within the eurozone. Other countries run huge trade deficits and have seen their competitiveness eroded. Some of these countries made wilful mistakes but a proper eurozone strategy should have sought to address others. However, the eurozone never had the tools to promote the type of convergence that was needed to confront these structural difficulties.

The eurozone also lacked stabilisation tools to deal with what economists describe as asymmetrical shocks, which are where crises affect some countries far worse than others. A stabilisation pool of some type is required to deal with this but the eurozone has not had one. We are now seeing the emergence of this.

Besides these very significant design flaws, the biggest missing element was the lack of clear understanding among members states of what was required of them to survive, thrive and prosper in the eurozone and to make their membership a success. We need look no further than Ireland to see how true this is. Our economic leaders forgot what it takes to succeed in a small open economy. This almost coincided to the day we joined the eurozone, perhaps it started a year or two prior to it. Its symptoms are there for all to see and I will repeat them because people tend to want to air-brush them out of history.

Gross spending by Government grew at 12% per annum after we joined the eurozone. This was more than twice as fast as it had grown prior to joining and 50% faster than the rate of growth of the economy. It was plainly unsustainable. Export growth collapsed to less than one quarter of the rate that had applied prior to joining the eurozone. This was an incredible collapse in our export performance and we lost market share consistently for six years in a row, from 2001 onwards. Unit wage costs grew at five times the rate they did prior to joining the eurozone. Significantly, this occurred at a time when Germany was decreasing its unit wage costs to zero growth. In just six years we lost 25% of our competitive edge, relative to Germany. House prices doubled in the years after we joined the eurozone and rose much faster than anything which had occurred there before. The exposure of our banks to foreign sources of funding went from 10%, according to the Governor of the Central Bank, to 60%. No one cried, "Halt". None of the regulators——

We were within the requirements of the Stability and Growth Pact.

Indeed, but no one cried, "Halt" to what was clearly an unsustainable policy. Those who criticised it were treated like pariahs — it came from the Minister's benches. They were told they should go and commit suicide and that they were unpatriotic. They were told the most extraordinary things. Those were the facts. Ireland was not alone in this. Other countries saw the arrival of cheap money as an opportunity to develop unsustainable policies. The most crucial thing which has to change is that there must be an understanding between the elected Members of the Irish Parliament and, through us, the people of this country about what it takes to survive in a small open economy in a difficult fixed currency regime.

I worry about some of the direction of the eurozone thinking regarding the rectifying of the problem which does not see domestic understanding of those issues as the core correction which we have to bring about. At the collective eurozone level there was not an understanding of what was required to make the eurozone work. The Stability and Growth Pact was clearly unenforceable and nothing was done to correct it. The bail out clause did not act in the way people thought it would and it is no longer part of the structure. The growth strategy articulated in Lisbon was simply not carried through and we have the evidence of the Spanish and Swedish Prime Ministers testifying as to the complete failure to implement the growth strategy which was essential to a successful eurozone. It cannot be built on retrenchment alone. That is the narrow focus which we are now seeing.

Member states adopted a go it alone strategy, not only the weak states but also the strong ones. For example, Germany's approach was a go it alone strategy. There was no convergence across the economies and no tools were being developed to deliver that. The European Central Bank chose an extremely narrow target, namely, inflation, when asset price bubbles were building up, in particular in Ireland, and there was no proper response to that. There are deep issues which need to be confronted that do not just revolve around the PIGS countries getting their public finances under control. To listen to this debate one would sometimes think that is the focus and the drive of this debate.

I do not criticise; faced with this crisis the eurozone Ministers and the European Central Bank have been extremely innovative in what they have come up with. The bilateral aid to Greece, the stabilisation fund which was developed jointly with the IMF, the relaxation of the rules by the European Central Bank and some elements of convergence and the co-ordination of fiscal strategy are extremely welcome. They are significant measures. It is hoped this will bolster the eurozone. There has been some doubt as to how successful that has been to date. One increasingly hears key architects of that strategy saying that it is now only a breathing space to undertake reforms; they do not see it as a solution in itself.

There are major missing pieces which are not getting much attention, namely, the continuing lack of a credible European Union growth strategy and supports for structural reforms to create more competitive eurozone economies, in particular in the deficit countries. That has to be part of making this a long-term viable solution for the eurozone. Taken at face value, I can understand how markets look at Greece and see a formula which will shrink the economy in the short term by very tough retrenchment, during which time debt will inevitably grow because it is being supported to allow that to happen and the hope is that in three years' time it will appear to be stronger. One will have a higher debt to GNP ratio after three years of this medicine.

I can understand how markets look in at Greece and ask where its capacity to drive a big export market which will make it a viable strategy is — perhaps they do not see it. It is not surprising that people will look with a jaundiced view at what is quite a narrow dimensional response to the crisis which has been building. I acknowledge that Ireland is fortunate to have a much more resilient export sector and that is the key element which distinguishes us. Greece and Portugal are running deficits of nearly 10%. Ireland is still running a trade surplus.

We are fortunate, notwithstanding the discussion which occurred earlier here, to have embedded sectors which give us an edge and resilience to deal with a crisis of this nature which are not available to others. However, our banking policy, which has essentially involved the transfer of bad loans and failed banks onto the backs of taxpayers, has put us back into the spotlight. It has doubled our debt at a stroke and I have misgivings, as the Minister knows, about the wisdom of that. It is not a least cost strategy and it has put us into the spotlight where one would hope we would not be.

Ireland must also examine whether this process, which has been designed in the eurozone, will work for us. I do not see a credible growth strategy for Ireland coming from the sort of debate and discussion which is occurring in Europe. I have said before, and it is not secret to the Minister, that I do not believe the Government has a credible growth strategy. The approach which I have heard the Taoiseach articulate repeatedly is that we should write whatever cheques are necessary to bail out the banks and correct the fiscal balance — that is the sum total of the strategy. That will not work.

There is a consistent view on the Opposition benches that we simply do not have a credible job strategy and the lack of one is undermining our ability to weather this storm. The danger is that the narrow view of Ireland's needs will now be copper-fastened by an equally narrow perception of the nature of the problem within Europe. We will have the double whammy of an excessively narrow view of what is needed.

Another issue which has to be addressed — the former Taoiseach is hugely culpable for not having addressed it — is that we have a budget system which is not fit for the running of a corner shop. It is a total disgrace. We do not have any system for independent assessment of whether the fiscal stance being taken by Government is appropriate. As a result we have seen numerous reckless budgets introduced which poured fuel onto flames, in terms of economic strategy. Many of those polices were introduced by the former Minister for Finance, who is now the Taoiseach, and his predecessor. There was no system of checks or balances in the House or system to confront the reckless fiscal strategies which were adopted by the Minister's predecessors.

That is a deep flaw in the way we conduct our budget business. The Minister has not suggested any reform, nor did his predecessors. We will not confront the difficulties which we have created domestically by catastrophic policy failures unless we start to change that system. There is no prior scrutiny by Parliament of any of the choices being made in the budget. It galls me to see the Taoiseach trot out and pretend there was proper scrutiny of property tax reliefs. This was an opaque box which would not be opened and Governments and former Ministers, including Charlie McCreevy and the Taoiseach, insisted on keeping them.

Time and again we sought to have the costs and benefits of these reliefs exposed before the budget in order that could have a realistic debate about the sort of choices we made. That was refused time and again. It comes as no surprise that they were left there for too long and built up an unsustainable property bubble because that was the way the system was designed. The Government did not want scrutiny or cross-examination of those measures. It wanted to introduce them like rabbits out of the hat on budget day to curry favour with people who were in the property sector. That is the way the system was run and that must be changed.

It is unacceptable to pretend we can have changes elsewhere and no change at home. No targets were set on what spending would deliver. Year in and year out the Minister came to the House and announced spending in the year was up 12% compared to the previous year. No Minister ever said: "This is what we will deliver and I will stake my reputation on that, and there will be accountability". Instead, we had waste, money was spent, no results were delivered and no one was ever held accountable. That is the system the Minister stands over and will not change. Not today, not last year, not at any stage in this crisis has the Minister shown any willingness to change that.

The system must change if we are to have a grown-up response to the crisis that has been created. The final insult is that the whole package is voted on in one final vote and it is all over at midnight. We end up with a budget that has created many of the problems yet no serious attempt is made to address the nature of the budget and its appropriateness to our needs. The system must be reformed.

I would have been encouraged if the Minister had indicated a willingness to respond to what is needed. To give the European Union its due, it has referred to the need for some parliamentary involvement at an early stage. I would have welcomed a reference from the Minister of the need for serious parliamentary involvement throughout the process and for proper scrutiny and the examination of options. If that had been said we would be encouraged to see that things are changing, but that is not what is happening. The real problem is that we are now having foisted on top of the current dysfunctional budgeting system a pre-vetting system that will take place in Europe. I worry about how that will impact on future budgets. We need to question such an approach and to examine whether it will provide the type of economic strategy that the country needs. There are strong reasons for suspecting that it will not.

It is not just that I am unhappy with the Minister's strategy, but the Commission itself has not been successful in developing a growth strategy. Its understanding or ability to implement the broader element required to make the eurozone a success is seriously open to question. The more I read the clearer it is that the primary focus of European finance Ministers is fiscal retrenchment. It is the sum total of the recipe that is evident. I do not detect a need to confront the fact that Germany is running huge surpluses and is pursuing a strategy that is dramatically different to what is necessary to have a convergence of economies within a single zone. Just as the deficit countries have to learn to live in a eurozone, the strong countries also have to learn what it takes to lead a successful currency zone that will work not just in the short term and for all the members.

I worry too about the pre-vetting process. Before the wider civil society of the community come to confront the problems there will be a grave sense that the thing is stitched up, that a decision has been taken by Government and the eurozone and then we are in a straitjacket. Let us be honest; the only way we will solve our problems is if wider society shares a sense of commitment and a unified sense of purpose around core strategic changes that we will undertake. That is what we must secure and put in place. I do not deny that Europe has a very important input to make into the debate. Nor do I deny that Europe has a right to impose sanctions if we wilfully ignore the interests of the eurozone. I fully agree with that. However, I gravely worry about a system that involves pre-vetting of budgets and pre-setting of sanctions and only when the budget arrives in the House would it be available to the wider civil society to debate the options to resolve the crisis.

The thinking of the eurozone is too narrow. We will not enlist the vital support of the broader community if that is the way it is perceived budgets will be developed in future, namely, the Government will go to Brussels where the parameters will be set out and penalties will attach to any deviance and then one hopes people will rally around. That approach will not work although I would support it.

Far from being a eurosceptic, I recognise that the eurozone has to make serious changes if it is to succeed but I do not subscribe to the view that prior fixing of the budgetary stance will serve us well. Governments in France and Germany are saying something not dissimilar to what I am saying. I am not in a eurosceptic band of one. Many take a similar view about the role of national Parliaments. That is not to say we do not understand the vital importance of the eurozone. We understand its needs and we accept we must integrate them into the way we think.

It is vital that Irish parliamentary democracy and the people we represent takes ownership of the process of becoming successful members of a eurozone that imposes real constraints. In the good years we did not learn to manage with those constraints and we must learn how to do that. Far from dismissing the criticism I have heard from numerous Ministers, the Government should be spelling out how it will radically reform the budgetary system so that we start to get a broader view. We need to internalise those necessary corrections of the catastrophic policy errors that were made in recent years. We can only do that if a new strategy is developed at home for job growth, reform and transformation and creating a much more successful country than the phoney success that passed as achievement in the Celtic tiger years. It was glitzy and garish but it did not represent the sort of success to which society genuinely aspired.

We must get to grips with some fairly unpalatable changes in our community. First, we have to revolutionise the way we spend money. The Minister must take responsibility and commit to that as part of the process. We need to undertake deep-seated reform in the way we structure and deliver public services. The Croke Park agreement is singularly unambitious in terms of the sort of transformation we need in order to provide public services. The change we need must be much more dramatic than what is being envisaged, namely, longer working days and the ability to deploy staff from one place to another. Welcome and all as those changes are the wonder is that it has taken so long to get to them. The highly centralised command and control system that we have foisted on many parts of the public service and that is underwritten by the national agreements are hostile to the kind of reform required to deliver value at local level. We need to recognise that and to start devolving power.

Every analysis of the public service from the OECD report on has been highly critical of our unwillingness to devolve power and make people accountable for results. We set up quangos but they have vague mandates and no accountability. We must embrace serious reform and that is equally important if we are to get our fiscal correction right. We must have an ambitious plan to build strong economic arteries such as the electricity system, broadband system and water system. They are creaking at the edges and are uncompetitive. We will not build a strong export-led recovery based on the current standards of those facilities. That must be core to a successful recovery plan. We need to move rapidly to have policies that will keep young talented people at home.

Eurozone countries looking in at Ireland will regard the movement of people to work in Frankfort, Sydney or New York as a good thing because it represents labour mobility. We have a different view of the issue, however. We do not want to see the talented people who can create a strong economy at home going to other countries to make a living. This is why it is important that we maintain control of our people's destiny.

I support what is being done here but I want to see a more robust agenda of reform at home and an emboldened Minister who can say on my behalf — because I will not have the opportunity to do so — that our Parliament wants to come to terms with the mistakes we made and to shape our own destiny. We do not want to be second fiddle to programmes designed elsewhere. The European Commission is making proposals but many other governments think like I do. Together, we can use this opportunity to create something genuinely better with parliamentary participation at the core. Paradoxically, the biggest obstacle to the scrutiny we need in this House is at home rather than in the Commission.

I would like to raise several questions about the Bill in advance of Committee Stage. What will be the status of the Irish money? It appears that, pari passu, it will have the same status as the rest. The strategy rightly has been criticised as replacing bank loans with state funds. When the IMF deals with this type of situation, does it act in the same way or does it accord preferential status to the new money it introduces? What is IMF practice in regard to supports of this nature and are we applying similar techniques? The Irish taxpayer would be interested in knowing how this will work.

Who decides if Greece is not compliant? There appears to be a vagueness in this regard. I am aware it is supposed to achieve a deficit cut of 11% but how will that work out in practice? If it produces 10.5%, will that be the end of the loan facility and who will make the judgment call? At an earlier stage, I got the impression that each government could decide to be involved on a case-by-case basis after an examination of Greek performance. Is it now a collective decision and, if so, on whose recommendation will it be made? How will that process work? It is important to the credibility of the exercise that it be successful. Clearly, people do not want to see backsliding from the commitments that have been made but equally they do not want such officious application of tests that they become unrealistic or impose unfair terms on the Greek Parliament and people. What happens in response to unforeseen events? If Greece's 11% deficit cut turns out to be based on forecasts of growth that do not materialise, how will that be addressed in practical terms?

I welcome that the Minister will revert to the House on the other dimensions in a legal form because that will give us an opportunity to debate the issue as it develops into a package of measures. Perhaps we will actually see some openness while the Ministers negotiate so that we can hold a parallel discussion.

I cannot fully brief the Deputy because I do not yet have a final text but I will do so as soon as I obtain it.

Back in 1975, US President Gerald Ford spoke about the possibility of a federal bailout for New York city. His response was clear, simple and made famous by the front page headline the following day: "Drop Dead". New York was in a similar situation then to where Greece finds itself today. It was spending too much, taxing too little, at the mercy of the market and threatened with default. So close was New York to bankruptcy that a petition was being filed in the state supreme court, the police cars had been mobilised to serve the papers on the banks and the mayor had written a speech to break the bad news.

What some may remember, but most probably will not, is that the day was saved by New York's trade unions. With an emergency budget already in the pipeline, complete with a doomsday list of spending cuts which would have decimated essential public services, everyone thought the game was up. At the last possible moment, labour leaders selflessly pledged the use of union members' retirement funds to back the city's loans and stave off bankruptcy.

In Europe, we now face a similar choice. What is to be Ireland's response? Do we act in the spirit of solidarity or do we decide to take our chances on our own and condemn our neighbours to the same fate? Is it to be each to its own or one for all and all for one? Solidarity is a guiding principle not just of the European Union but of the Labour Party. We believe in looking out for our neighbours and in helping those in need to help themselves. As a country, Ireland has benefited enormously from the solidarity of our European neighbours. We were the greatest per capita recipient of European Structural Funds and are still a massive net recipient through the Common Agricultural Policy.

Ireland was once the sick man of Europe but look how far we have come. Notwithstanding our recent fall from grace and Fianna Fáil's wrecking of our economy, it remains true that we have converged with European norms in terms of living standards. Through the wise use of European funds by successive Governments, our national infrastructure has enjoyed a quantum leap forward in the decades since we joined the EEC in 1973. Our farms have been able to modernise and to compete at a global level through the judicious use of CAP. When Ireland was on its knees, Europe did not abandon us. With Greece now at the mercy of global bond markets, it is our duty to hang together because, if not, we may well hang separately.

Underpinning the European project and the concept of ever closer economic, monetary and political union is the overarching principle of solidarity. Some say that money makes the world go round but in Europe, solidarity is the glue that binds together nations with a shared history, identity and destiny. The people who founded the European Union wanted to put an end to war on the continent after centuries of conflict. We truly are all in this together, regardless of whether we sink or swim.

Greece needs to reform its budget and to get its economy in shape but without the breathing space provided by this solidarity agreement over a relatively short three year period, its fate will be infinitely worse. In Ireland, we are not without our own direct interest in saving Greece. Greece was identified by the bond markets as the weakest link, but markets are subject to irrational herd instincts and sometimes make the wrong call. While Ireland's economy is very different to that of Greece — with substantial inward investment from the multinational sector — we can just as easily become a target for bond traders who, having finished off Greece, may move on to other weaker countries such as Portugal, Spain and Ireland. This argument in favour of supporting Greece could be referred to as selfish solidarity, calling to mind Richard Dawkins's references to the selfish gene.

The world is in the grip of a form of hyper-financial capital which operates on a global basis at incredible speed. Ironically, a large component of modern funds for investment is made up of workers' pension funds. As has been remarked, these can be as much the holders of sovereign bonds as hedge funds and private equity. It would be ironic if workers' pension funds, a concept developed by Social and Christian Democrats, were to be the instrument for devouring a country such as Greece. This subject will have to be returned to by the trade union movement and the holders and trustees of workers' pension funds.

We have seen in recent weeks the cost of division in Europe and the futility of struggling alone on the rough seas of the global bond market. Caught between Chancellor Merkel's policy of prevarication and the bond market's ruthless rent-seeking, Greece has been subjected to the nation state equivalent of waterboarding, as expressed by the former Danish Prime Minister, Mr. Paul Rasmussen. As moments of light relief go, it is nice to see Mr. Anders Borg, the Swedish Finance Minister, with his earring and ponytail, among the other Finance Ministers. He spoke recently about the wolf-pack behaviour of markets and how they would tear the weaker countries apart. Mr. Will Hutton, the noted British economist and former editor of The Observer was in Dublin last week, at the invitation of the trade union movement, for a series of important debates about Ireland’s future direction. He spoke about hunter gatherers who eat what they kill. That is how he, somebody with long experience of the bond markets, characterised traders. It is not in our interest to let the hunter gatherers in the bond markets kill Greece and eat it because, having done so, they will undoubtedly turn their attention to the next weakest animal in the pack.

The purpose of the package of support for Greece is to prevent the first domino falling in the form of a Greek default. We are not today discussing the €750 billion stability mechanism. Nor are we discussing the draft Commission proposal on reinforcing economic policy co-ordination. Suffice to say the eurozone has a problem, just as we do in Ireland. What is required is substantial reform of public services. We must bring down the deficits, but we must do so while still investing in infrastructure and innovation so that we and the eurozone can maintain and improve competitiveness. If we have the hunter gatherers trying to pick us off as the weakest in the pack, we must work to become stronger. I lived in Africa for a time and often had an opportunity to observe the antics of hyenas and hunting dogs. The strongest pack is the one that shelters its young and ensures that they, as the weaker elements, do not easily become prey.

Too much deflation, too quickly and in the wrong areas, will simply lead to complete depression, huge reductions in income and major increases in unemployment. Ironically, the bond markets, seemingly wishing to have it both ways, reflected this in recent days when they priced down the euro on the basis of fears that growth in the eurozone will not be sufficient. The European Union's Stability and Growth Pact was signed in Dublin. Stability and growth are two sides of the same coin called economic security. If we have one without the other, the system itself will be inherently unstable. To all intents and purposes, the Stability and Growth Pact is dead for a variety of reasons. In better times, it was more honoured in the breach. Before pointing the finger at countries like Ireland, Greece, Spain or Portugal, it should be recalled that some of the larger countries, by virtue of their size, were able to get away with actions never contemplated by smaller states. However, that is now consigned to history.

Yes. It should be remembered that we lived within the terms of the Stability and Growth Pact, which proves its inadequacy.

At a time of crisis, the pact has been found to be a completely inappropriate framework. The reality is that if we are serious about making a success of monetary union, we must go back to the drawing board.

The discussion document published last week was a useful contribution in this regard, but it puts forward only one point of view. Its core aim seems to be to make Europe more German, when what may be needed is also to make Germany more European. Aristotle, the most renowned of all Greek philosophers, is famous for his conception of the golden mean, the desirable middle of two extremes between excess and deficiency. This was a founding principle of the European project, that one's affairs could be managed so that one could, with caution and carefulness, enjoy the fruits of growth. The European Union needs to find its golden mean between a German Europe and a European Germany. Facing the deepest recession since the European project was constructed amid the devastating aftermath of the Second World War, member states have responded with appropriate fiscal stimuli and unprecedented bank bailouts. What began as a financial crisis has become a broad-based economic crisis and latterly a sovereign debt crisis. Those countries in a weaker financial state before the crisis have been left most exposed. Ireland's saving grace has been its relatively low stock of national debt, although when NAMA and so on are priced into the balance sheet, that situation will change. We have only a window of opportunity in this particular game and the headroom on our national debt is one of the few factors separating us from the Greeks.

Advanced economies, in Europe and worldwide, may well be on the verge of an age of austerity as they attempt to get their deficits and national debt under control, but there are two sides to the equation of long-term debt sustainability. Deficits must come down and the size of the national debt must be brought significantly below the size of the economy which supports it. However, we also need growth and investment in innovation. One of the issues in regard to the European Union which causes me to weep is that it has proved to be so long on talk and so short on delivery. The purpose of the Lisbon Agenda was to make Europe a competitive and humane society with good public services, including health and education systems, and active, private markets. It was in achieving this golden balance between the public and private that Europe would secure the best and most optimistic outturn. I am afraid this outturn was not delivered.

I worry that with centre-right governments in power in most European countries Europe will veer towards excessive fiscal rectitude, resulting in more unemployment and job losses and a failure to engage with the innovation and growth that would enable the Continent to become competitive in the world market. Europe's economies must grow if they are to reduce the burden of debt. Every time someone is put back to work, the State no longer has to pay €10,000 per annum in social welfare benefits. After a period of employment, the person also starts to pay PRSI and income tax. This is how one reduces the deficit.

As consumers buy more, increased VAT receipts replenish the Government's coffers. If all European countries were to try to deflate their economies in search of the Holy Grail of an export-led recovery, we would embark on a disastrous downward deflationary spiral with a beggar my neighbour outcome. What makes sense for an individual country may not make sense for Europe as a whole. Put another way, if all of Europe were to try to emulate Germany by having limited consumer spending, we could all end up like Greece, with a collapsed economy coupled with a massive debt overhang. Such a scenario is clearly not in anyone's interest.

When we go back to the drawing board on the Stability and Growth Pact, whether through a European monetary fund or an alternative mechanism, we need to place at centre stage the need for greater innovation, growth in investment and employment and new opportunities for young graduates and apprentices who are the future of European economies. I have spoken to the Minister previously about the Labour Party's proposals to establish a strategic investment bank to invest in innovation and public infrastructure and to introduce a graduate internship system. Under this system, rather than being offered slightly less than €200 per week on the dole, graduates would be taken on in the public and private sectors, including by professional firms, local projects or non-governmental organisations, and their employer would be exempt from employer's PRSI. In return, employers would augment the dole money paid to the graduates they employ. This would get people into work and doing something useful. It is essential that the Minister and his fellow Finance Ministers do not decide to engage in a collective form of depression economics that focuses entirely on making cutbacks and reducing deficits. While these types of measures are necessary, they must be balanced by opportunities for growth.

The Irish contribution to the pooled bilateral loans to Greece to be provided as part of a lenders' club, as it were, overseen by the European Central Bank will be 1.64% or €1.3 billion, while Germany will contribute 28% to the fund. This is a large amount of money for both countries but should be seen in the context of an historical analogy. After the Second World War, when Germany lay in ruins following the disastrous regime of Hitler, the country was boosted by the Marshall Plan and the American dollar. The Marshall Plan had an impact all over Europe, including to a small degree in Ireland. One of the tragedies of this country, however, was that we did not benefit significantly from the Marshall Plan. The money loaned to Europe under the plan was ultimately paid back. Much of what one sees in modern Europe, particularly in Germany, the country that was defeated in the Second World War, was built using the funds provided under the plan. These moneys were used to rebuild the country, to invest in its technology and to create the modern consumer products on which the German economic miracle was built.

Europe has, therefore, experience of structural assistance that worked. We are also long time members of the International Monetary Fund, another club of countries which contributes to countries experiencing economic difficulties, especially in the developing world, albeit not always in a manner of which I approve. Living in Tanzania in the 1980s when the IMF arrived to impose a structural adjustment programme, I saw the men from the IMF, with their shiny briefcases and gold tipped fountain pens, write their reports as they lounged at the side of swimming pools. These reports required the country to cut primary education — African girls dropped out of education in every country the IMF introduced a structural programme — and eliminate primary health care, with the result that increasingly large numbers of children died from preventable and curable diseases such as malaria.

As a country involved in a pooling of interests with the International Monetary Fund, we must think long and hard and keep a tight grip on the fund. While I am aware that the current managing director, Mr. Strauss-Kahn, has changed many IMF policies, we must ensure that what is being done to people in Greece and Ireland is translated into income and employment.

Thinking about the position in Greece brought to mind the contribution of its theatre and authors to our literature and consciousness. In Greek myth, Icarus flew too close to the sun because he believed himself to be invincible. Modern finance capital also flies too close to the sun because it believes the mere human beings who look to those who play the markets like ants on the ground are of no significance. This issue must be addressed globally.

Greece also gave us the legend of King Midas. I hope the Minister is not offended when I say the legend appears to apply to the Fianna Fáil Party. While King Midas worshipped gold, the Fianna Fáil Party worshipped bankers and developers. I will leave the Minister to catch up on what happened to the king during his bedtime reading.

I am pleased the Deputy did not refer to our local Icarus.

What did our King Midas, the Fianna Fáil Party, do? It stoked tax breaks. What did the Minister's predecessor, the Taoiseach, Deputy Cowen, do when a proposal was made to impose a 1% stamp duty on contracts for difference? He argued that such a measure would reduce the power of the market to act as it saw fit. Greeks also talk about hubris, that is, acting in a manner that brings about one's own downfall.

This is an historic moment and we must not think only in terms of the package provided to Greece. While I believe this package is appropriate, it is also tough and I do not know if the Greeks will make it, particularly in the three year timeframe. We also need to examine the proposals the Minister will make in a week or two concerning the €750 billion stabilisation mechanism. We will also have to look in great detail at these initial proposals by the European Commission on oversights and guiding the budgetary process of member states. The Lisbon treaty promised that parliaments would be far more engaged before Ministers went to Brussels and that we would be informed, advised and consulted on decisions. Decision making is the prerogative of a national parliament, and in our system, of the Government of the day that commands a majority. It would be extraordinary if the Commission were to have sight of our budget in broad terms but we in this Parliament were not to have such sight, or more importantly, if the citizens of Ireland were not to be told through a parliamentary forum what exactly our Government was proposing to the Commission.

I heard the Minister for Social Protection at the weekend proposing a serious think about people who had paid a contributory pension in good faith. If such people ended up with more than one pension, then their contributory pension might be taken from them. As somebody who worked in the social welfare area, I do not understand how that can be done. This is an example of a kite being flown by a Fianna Fáil Minister in order to set the terms of a debate. It may well be that in the next budget, Fianna Fáil's real target is child benefit.

I was once a member of a local authority and the county manager explained that the council always came up with four to five proposals for a site for a landfill, three or four of which were non-runners. If the European Commission is to give advice and have oversight of our budget, it would be extraordinary if Fianna Fáil was to withhold that information from this Parliament. It is extraordinary that Fianna Fáil has embarked on a tactic whereby the Minister for Social Protection has been encouraged to run out and suggest that the contributory old age pension may no longer be an entitlement for people who have contributed to it. Fianna Fáil backbenchers may have a comment or two about that, but it is extraordinary that we have no budgetary process in this Parliament.

The Minister for Finance is now entering a round of discussion with the line Ministers in each Department. One line Minister has thrown out this idea. We do not know if it is a serious idea. I suspect it is a kite, but we have no forum in which to discuss it. The purpose of all this is a media setting agenda, and to make this a fevered subject of talk and speculation. Perhaps Fianna Fáil will then back down and reassure people that they are alright, before moving on to its real targets.

The Commission proposal to have oversight of member states' budgetary plans must give rise to long required reforms in this House to allow for a meaningful discussion of the budget. A budget means a plan for the next year, but this House does not even get to discuss the budget until after it has been announced. The Labour Party supports the proposal in respect of solidarity with Greece. We want to get more information about the €750 billion stabilisation fund. In particular, we want provision for a thorough debate of the Commission's proposals on information co-ordination and guidelines for budgets.

I welcome this Bill as it provides evidence of eurozone states supporting each other, and this support has never been more welcome than at the moment.

Over the past few months, there has been severe turbulence in the international money markets. As a result, some states have experienced civil disorder as they try to correct the financial mistakes of the past. It is to the credit of the Government, and particularly the Minister for Finance, that Ireland took corrective action immediately when the problem became apparent. This corrective action has been very painful to all the citizens of Ireland and it would be foolhardy in the extreme to expect that all the pain is over. It is not over and we all know that another €3 billion has to be found in the budget later this year. However, the less well off must be protected.

As a result of the financial turbulence, certain countries are being bracketed with Greece, such as Spain and Portugal. These two countries have announced severe austerity measures in the past few days and are now following the example given by Ireland. However, one of the most alarming consequences of this financial turbulence has been a direct attack on the euro itself. It is vitally important that the euro currency remains strong. The passing of this Bill is a step towards protecting our currency because, should the euro fail, the consequences for Ireland would be catastrophic. That is why I believe, welcome and all as this Bill is, that it does not go far enough.

We all realise that some countries in the eurozone are stronger economically than others, such as Germany and France. Over the past number of days, very worrying signals are emanating from both these countries that they may not continue to support the euro in the future. If they were in any way to weaken their resolve in support of the euro, we would be faced with an economic whirlwind, the likes of which the country has never experienced. We all hope that it does not happen, and it must not be allowed to happen. A stable euro is vital to Ireland's recovery, but the agreement between the eurozone states, welcome and all as it is, does not go far enough to maintain faith in the euro.

Strong, decisive and unambiguous messages need to be sent to the international money markets that the euro will be maintained and international speculators are wasting their time attacking the currency. I want the Government to work with our eurozone partners to show decisive commitment to protecting the euro and any talk of a two-speed euro, which is a possibility if the stronger economic countries withdraw their support for it, will only be speculation. To get out of the financial difficulties Ireland is currently facing, it is vital that we have a stable euro. A two-speed euro would have disastrous consequences for Ireland and there would be an immediate outflow of funds from the country. It would undo all the good work that has been done to correct our public finances. All the pain that the public have suffered would be undone.

I ask the Government to work and secure a firm commitment from all the countries in the eurozone that they will work together to help support the euro. I commend the Bill to the House.

I welcome the Bill and thank the Minister and his officials for all the work they have done on the Bill and on the entire financial situation that pertains in our country and throughout the eurozone at this point in time. Ireland along with all the other eurozone countries has agreed to assist Greece through the issue of loans, which Greece must repay within a fixed time period. We are not paying money to Greece; we are lending it money and it is important that we all understand that. If Ireland needs to borrow money to fund these loans it will be at a lower rate than Greece is paying us back, allowing the State to make a profit. While it should not be about profit, we need to have cognisance of our situation in Ireland.

It is important to remember that not only is there a financial return to the State for providing these loans, but there is also a far wider economic return safeguarding financial stability in the eurozone. That cannot be overstated. It is vital for all of us that we have a stable euro currency and that we safeguard the situation throughout Europe. We cannot under any circumstances allow any undermining of the euro. We cannot even entertain any implied threats that we might have a two-tier system for some countries regarding support for the euro. This cannot be accepted in any shape, make or form.

Stability is essential for businesses, citizens and the State. Businesses need financial stability to trade with our European and global partners. We all know how difficult it now is for businesses to stay alive and have the cash flow they require on a weekly and daily basis to meet their commitments to pay for wages, commodities, imports etc. It is vital to have financial stability for our businesses whether they be big or small. I refer to small and medium-sized businesses right up to some major organisations. Without that stability they cannot have the confidence to continue trading and the banks may not have the funding to support those businesses, which they had a commitment to support heretofore. In many cases they are withdrawing that commitment and are uneasy about it probably because they do not have the financial certainty or stability that is required on a euro-wide basis.

As citizens, all of us need financial stability to spend and invest with confidence, which is vital for every household in the country regardless of their income. I know many of them are very chastened and worried at this point. Above all confidence is required to allow people to be able to go about their business and live as normal a life as possible in difficult circumstances. By spending their money prudently they can give a boost to businesses. It is a holistic situation as far as I am concerned and if the consumer does not have the confidence to make ordinary day-to-day spending or invest in a new car or house renovations etc., we know what that leads to. We have seen too much of that in the past 18 months since the financial crash. In this regard the bankers have a major responsibility. While we have ring-fenced in the business stabilisation fund certain funding for the bankers to lend, clearly they are not doing this.

This bailout needs to be seen as a total commitment by Government and now by extension from governments of all the European countries to stabilise the situation in Greece. Above anything else we will not be at any loss for doing it, but we need to stabilise the euro currency. This country has a proud record of supporting many countries throughout the world in times of dire need going back over generations. In the present situation in which Greece and we find ourselves, I welcome the austerity measures that Greece has introduced despite the upsetting reaction. We understand where we are ourselves that we have had to do a major job of financial rectitude. We are well on the road to doing that but it is not easy. I compliment the citizens of this State for accepting their share. We all need to accept our share. There is no point in having the blame game. We all made many mistakes, including bankers. We are all in it together, ordinary people, investors from Ministers down and bankers. We know where we are and what we need to do. We need to find another €3 billion, which will not be easy this year.

When I came into the Chamber Deputy Burton referred to the comments of the Minister, Deputy Ó Cuív, which was timely. From my point of view there is no question of vulnerable people, including old-age pensioners, being undermined or having money taken from them by the Government, because I, for one, would not stand for it. We need to look at every euro that is spent and examine how it is spent to ensure that it goes to the most needy and deserving. In this context what we are doing for Greece is also vital. It needs to be spent fairly and there needs to be a plan. Here at home we need to examine where every euro is spent and that the most needy are getting it. While I know people have entitlements, if people are in a comfortable position, they may not need as much as the people who are in need and may be on a small single pension in a household. We need to look after those people.

My party has a proud record of looking after the pensioners. I intend to ensure that continues, which I am sure is the intention of the Minister, Deputy Ó Cuív, and the Cabinet. It is a matter of examining the system. It is only May and the budget will not be announced until the end of the year. It is timely. The media have picked up on it which is also welcome. I resent the scare tactics from Opposition parties which understand how bad the situation is. We need to ensure that the most needy are looked after.

EU governments are confident that the new Greek Government is making determined efforts to meet its fiscal and structural challenges. The significant reforms announced on 2 May are clear evidence of this commitment. Those reforms needed to be announced and acted upon before any other European states could give their backing to the euro area loan facility. It is important that we would have the confidence now as partners in Europe given that it has made those commitments. While we see that taking place we should not shirk from our responsibilities and should provide this necessary propping up of a fellow member state. Given the difficult times we are in, we must show solidarity with our European partners and we cannot turn our backs on a fellow European state in its time of need. Those who live in glass houses should not throw stones.

We never know at what time in the future we might have different crises other than financial ones. As we have seen recently with ash problem from the volcanic eruption, we do not know what kind of act of nature or God might defeat us all. We are not mightier than the man above. Anything can happen and we always need to understand from where we have come and where we are going. We should try to support our colleagues as we would expect the same support from them, which I feel we would also get.

We need to send the message to the world markets that the EU as a unit is strong and acting in unison. We need to try to bring all the countries on to a level playing field to ensure that they are supported while they are committed to putting their own houses in order. People can claim that Greece was reckless as they can claim that Ireland was reckless. We were and we are paying the price now but thankfully we are not in the same situation. Nobody knows how long we might be involved or the different reasons. It is not for us to apportion punishment or blame but to realise that mistakes were made, be man or woman enough to admit them and support everybody who admits to making a mistake. A person who never made a mistake never made very much and that applies also from a business point of view.

We all made mistakes and Greece probably made them to a bigger extent but now it is trying to sort out its problems. It is vital that we, as a Government and as a country along with all EU countries, provide that necessary shoulder and support for a colleague country in a difficult time. However, we must not contemplate any undermining of the euro. That is vital for all member states. We must not give any credence, lip service, engagement or discussion to the mention of a two-tier euro. I know where such talk comes from, as we all do. That would be totally counterproductive and bad for the eurozone. It would send out the wrong messages and we cannot afford that.

We are making a profit on this, not that we wish to crow about it, but it is important that the citizens of the State should understand that. It is not throwing money into a black hole as has been enunciated by some people but a matter of supporting a colleague state and, in so doing, making a profit. There will be a risk for the three-year period during which we must pay our share. I hope all member states will play their fair part although a bigger portion is involved for other countries. It would be an undermining of the entire eurozone if any of our colleague states did not engage fully, step up to the plate and support Greece at this time.

I thank the Ceann Comhairle for listening and I commend this Bill to the House.

Deputy Kieran O'Donnell has 20 minutes. I understand he is sharing time.

I am sharing time with Deputy Mitchell.

My party will support this Bill. However, I find it strange that the Bill was signed by the Minister for Finance on behalf of the State on 7 May yet we had to wait ten or 11 days before the House could debate the issues. The debate we are having is based on the legislation but the first tranche of money went to Greece this morning. I agree in principle with what we are doing but we need more debate, detail and disclosure which, to date, we have not got from this Government.

What is proposed is like the bank guarantee scheme the Government brought in that fateful night of 29 September. We did not debate that scheme until it was already in place. Concerning that scheme and Anglo Irish Bank, Michael Somers, the former chief executive officer of the National Treasury Management Agency, stated that for a long period prior to the scheme he was reluctant to give deposits to Anglo Irish Bank. Alarm bells were going off.

The Government should have had contingency plans in place for Anglo Irish Bank. It treated it in a different way when the guarantee scheme came into place where, effectively, the bondholders in Anglo Irish Bank were not guaranteed unlike those in the other institutions. There should have been a contingency plan. If there was one, was it acted upon or why was it not acted upon? These questions must be asked. I hope the Minister for Finance will answer them when he replies to this debate and that the bank inquiry will deal with the matter.

The measures proposed in this Bill will deal with short-term liquidity for Greece but will not address the country's long-term solvency issue which is key. We must look at this and ask whether this measure will bring about a situation whereby the euro will be protected, Greece will solve its financial crisis and will be in a position to repay the loans advanced to it from the other member states. I would also like to have detail on another matter. It appears that Ireland and other EU member states, although I can only speak in respect of Ireland, will lend money to Greece, ranking pari passu with existing private bondholders to the Greek State. The private investors in Greece would have known what they were investing in but Ireland is entering a bail-out package. I ask the Minister whether this will be ranked in the same way or to explain the position.

The Minister stated this assistance programme is to have quarterly reviews but according to section 4 of the Bill the Minister will provide only an annual report. This latter report should mirror the quarterly reviews to be carried out in respect of the assistance programme and should be given to the House on a quarterly basis. This sum of €1.3 billion is a significant amount of money for the State and there will be another €7.5 billion to come for the European financial stability mechanism. That would be our share.

We must support the eurozone and I am very pro-European. However, in this House, as I have noticed since I was elected, there is a lack of detail and willingness to debate issues. This happens consistently every year in regard to budgets. There is no proper debate in advance. We are presented with a pre-budget outlook and the actual budget on the day, with no discussion. I reiterate there was no prior discussion on coming into place of the guarantee scheme when it is clear there were advance warnings in the banking sector, particularly in respect of Anglo Irish Bank. The guarantee scheme was brought in on the day and tucked into it was the detail that subordinated debt of lower tier 2 was guaranteed. There are questions to be answered.

In terms of what is provided in this Bill, the annual report should be a quarterly one. We must ask where our debt ranks in regard to other debt. We must also look to protecting the euro, which is important. People will say the euro is depreciating in value against other currencies and that is happening. It will boost our exports but the currency is falling especially against the US dollar, although not so much against sterling. This will increase the cost of imported fuel which is denominated in US dollars. The actual fuel may not rise in price but the price will rise for us because of depreciation of the euro. Furthermore, with the depreciation of the euro the cost of borrowing may increase. The money raised today on the bond market by the National Treasury Management Agency was at 4.7% although it was offered at 4.5%. These are issues we must look at.

Deputy McGrath, unlike the Taoiseach, is now on the record of the Dáil as saying the Government was reckless and mistakes were made. However, we find the Taoiseach unwilling to admit these things. I saw his recent 7,500 word monologue described as like the excuse of the little boy who came into class and said the dog had eaten his homework. What we got was, effectively, an abdication of responsibility. The Taoiseach must attend the House and admit the Government was reckless during his period. He referred to the property tax schemes that were implemented and said he stopped them. He became Minister for Finance in December 2004. Most of those schemes did not finish until July 2008.

The markets are nervous at present.

Debate adjourned.
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