Dáil Éireann debate -
Wednesday, 8 Jun 2011

Vol. 734 No. 4

Leaders’ Questions

Deputy Micheál Martin

During his put-down of the Minister, Deputy Varadkar, last week, the Taoiseach stated unequivocally that Ireland is funded until 2014 in all circumstances. Both the Taoiseach and the Minister for Finance, Deputy Noonan, repeated this on a number of occasions. They both also stated that a 1% reduction in the interest rate payable on the bailout would be worth more than €400 million per year to Ireland. The Taoiseach could not have been clearer on this.

Yesterday, without warning, the Minister, Deputy Noonan, changed that scenario when he told the House that, in fact, we are not funded for 2013. Almost in the same breath he halved the projected saving we would get from an interest rate cut. Clearly following the Taoiseach's lead when he downgraded the jobs budget, the Minister then attacked others for supposedly exaggerating the importance of this issue and the figures involved, saying they are to blame for hyping it up. The fact is that this issue was hyped up by the Taoiseach, his party and his partners in government — we remember the talk of Frankfurt's way or Labour's way. That happened throughout the election and in the weeks after it. Trying to whitewash away those promises will not work.

What was made clear on these two key issues last week has now been directly and entirely undermined. Are we fully funded for 2013, as the Taoiseach said last week, or are we not, as the Minister, Deputy Noonan, said yesterday?

Deputy Bernard J. Durkan

Why is the country broke?

Deputy Micheál Martin

Are we still negotiating for reduced interest rate payments of €400 million, as the Taoiseach and the Minister said last week, or have we settled for the €200 million the Minister talked about yesterday?

The Taoiseach

Deputy Martin started with an assertion that I said we are funded until 2014 in all circumstances. That is not what I said. The Deputy is aware that the bailout deal goes well into 2013. The position is that the Minister, Deputy Noonan, yesterday set out clearly the situation in so far as answering the questions he was asked. He said quite clearly that he is not prepared to negotiate on the basis of giving up Ireland's corporate tax rate for a basis point reduction that would be worth approximately €150 million to Ireland. He is right in that. On 11 March, one or two days after the Government was formed, at the first European leaders' summit I had the privilege of attending, I made it very clear that Ireland would not concede an increase in our corporate tax rate. We had a very healthy scepticism about what I viewed as tax harmonisation by the back door in respect of CCTB.

A total of €15.6 billion has been drawn down from the financial packages, comprising €11.4 billion from the EFSM and €4.2 billion from the EFSF. This means that any interest rate reduction would apply in respect only of the remaining moneys of €24.6 billion. The Heads of Government devolved the negotiating right for the reduction of interest rates to the Ministers for Finance, and that is being pursued. I have been to Washington and New York, where I confirmed to business interests Ireland's message that we are not shifting from the 12.5% corporate tax rate.

Deputies

Hear, hear.

The Taoiseach

I made that clear to all and sundry at the first meeting of the European Heads of Government. It is time for Europe to focus on what it needs to do to help countries which are making a committed and genuine effort to get out of the economic difficulties they face.

Deputies

Hear, hear.

The Taoiseach

It is also a necessity to focus on restructuring the kind of system that will apply under the ESM when it comes into operation in July 2013. We do not want a situation where one enters a mechanism out of which one cannot get. That is an issue I intend to raise at the meeting of the European Heads of Government later this month.

In essence, Ireland is not conceding on its 12.5% corporate tax rate, and we will continue to push for the interest rate reduction to which the OECD, the IMF, Commissioner Olli Rehn, other Commissioners and other countries have said we are entitled. It is unfair, having renegotiated in the circumstances of the austere set of conditions in which we found ourselves, that some are of the view, because of national interests, that we should not have an interest rate reduction which has been applied to others without extra conditions being imposed on Ireland.

Deputy Bernard J. Durkan

Hear, hear.

The Taoiseach

When Mr. Papandreou spoke to me before the meeting in Brussels, he was seeking a 2% reduction in the interest rate, as well as an extension of time, and I told him we would be highly supportive of helping the Greek people and Government in their difficulties. As matters stood, Greece was not within the EFSF but was outside that mechanism and a 1% reduction was given, as well an extension of time that he had requested. The agreement was that countries within the EFSF bailout mechanism could have an interest rate reduction applied to them. The Minister for Finance continues to negotiate in this regard on our behalf.

Deputies

Hear, hear.

Deputy Micheál Martin

In essence, if the Taoiseach is being honest, the Government has negotiated nothing of any real substance since it came to power. That is the fact of the position.

(Interruptions).

An Ceann Comhairle

Sorry, Deputies.

Deputy Micheál Martin

It is over——

Deputy Jerry Buttimer

Can Deputy Martin spell "honesty"?

Deputy Micheál Martin

It has been more than three months——

Deputy Brendan Howlin

It is Fianna Fáil's deal that the Government is trying to renegotiate.

Deputy Micheál Martin

If the Deputies opposite would listen——

An Ceann Comhairle

Can we have some order please?

(Interruptions).

Deputy Micheál Martin

——and allow Members on this side of the House to have their opportunity to articulate their point of view——

An Ceann Comhairle

Can we have some order please?

Deputy Micheál Martin

There should be less arrogance now please.

Deputy Paul Kehoe

I agree there is arrogance.

(Interruptions).

Deputy Micheál Martin

It is more than three months——

An Ceann Comhairle

Sorry Deputy——

(Interruptions).

A Deputy

The Deputy has supreme arrogance.

An Ceann Comhairle

Could I have some order please? The same voices are appearing every morning. I ask Members to please give the speaker an opportunity to make his case.

Deputy Bernard J. Durkan

I apologise, a Cheann Comhairle.

Deputy Finian McGrath

Put him out, a Cheann Comhairle.

An Ceann Comhairle

The same courtesy will be extended to the Government and Opposition sides.

Deputy Finian McGrath

Fair play to you, a Cheann Comhairle.

An Ceann Comhairle

I do not wish to be obliged to repeat that.

Deputy Micheál Martin

I thank the Ceann Comhairle. The Taoiseach has now just confirmed that close to half of the bailout fund is beyond any reduction in interest rates. More than three months have elapsed since all governments in Europe agreed that funding costs, as it was put, "should be lowered to better take into account debt sustainability of the recipient countries". Since then, the only thing that has been lowered is the amount for which we appear to be negotiating. Delay, uncertainty and regular leaking by different countries is causing immense damage——

An Ceann Comhairle

Has the Deputy a supplementary question?

Deputy Micheál Martin

——and is putting off the day when some certainty about the future needs of Ireland and other countries can be settled. Last week, the Taoiseach refused——

An Ceann Comhairle

The Deputy should ask his supplementary question.

Deputy Micheál Martin

I am asking it, a Cheann Comhairle. The Taoiseach refused to ask for this issue to be discussed at the next European Council meeting. He made the incredible statement in this House that he would talk about it if someone brought it up.

An Ceann Comhairle

The Deputy should ask his supplementary question, please.

Deputy Micheál Martin

The Taoiseach also has informed the House that he has not raised the issue at a number of meetings with Heads of Government. Since he became Taoiseach, his approach appears to be——

An Ceann Comhairle

Sorry Deputy, ask your supplementary question.

Deputy Micheál Martin

I am about to ask it.

An Ceann Comhairle

The Deputy has one minute but has gone way over it.

Deputy Micheál Martin

I have been interrupted by a lot of Members.

An Ceann Comhairle

I have allowed for that.

Deputy Micheál Martin

The Taoiseach has enjoyed the adulation and the protocols. Given the abject failure of the finance Ministers——

Deputy Jerry Buttimer

Is the Deputy reading his briefing notes?

Deputy Micheál Martin

——to fulfil the mandate given to them by the European Council leaders to deliver lower funding costs to all countries, will the Taoiseach now finally agree to raise the matter at this month's meeting of European leaders?

Deputy Emmet Stagg

To undo the previous Government's dirty deal.

Deputy Billy Kelleher

Chancellor Merkel has let the Taoiseach down.

Deputy Timmy Dooley

The negotiation was a complete sham. Members saw the one between President Sarkozy and the Taoiseach.

The Taoiseach

First, the reason we are having this discussion this morning and many other discussions for the last number of years is because in the first instance of the lousy legacy left by the inability of Deputy Martin's colleagues when in Government.

Deputy Emmet Stagg

It was a dirty deal.

The Taoiseach

I refer to the deal negotiated by the Government of which Deputy Martin was a member with the IMF, ECB and EU, when he refused to tell the truth——

Deputy Timmy Dooley

At least we got something out of it.

An Ceann Comhairle

I ask Deputies to stay quiet, please.

The Taoiseach

——about Mr. Chopra being here in the first place. It has been renegotiated by the present Government in respect of a reversal of the cut in the minimum wage——

Deputy Timmy Dooley

Just as the Minister, Deputy Varadkar, and the Taoiseach could not figure out who was telling the truth last week.

The Taoiseach

——which affected a raft of lower paid workers. There also has been a renegotiation in respect of introducing a jobs initiative to stimulate the indigenous economy, with regard to changes made to dysfunctional banks, which the previous Government refused to face for more than two and a half years——

Deputy Timmy Dooley

When will the Taoiseach answer the question?

The Taoiseach

——and in respect of no further transfers to NAMA.

Deputy Timmy Dooley

Answer the question.

An Ceann Comhairle

I thank the Taoiseach.

Deputy Micheál Martin

There was nothing of substance there.

The Taoiseach

I trust the Minister for Finance, Deputy Noonan, to continue his negotiations in respect of the responsibility given to all the Finance Ministers regarding the capacity to have a reduction in the interest rate. However, I will raise the points I have just made at the Heads of Government meeting. I believe there is a clear need for Europe to consider where Europe is headed at present——

Deputy Peter Mathews

Hear, hear.

The Taoiseach

——because from a political perspective, the European countries must understand and appreciate, as many do, it is necessary to help countries that are meeting serious challenges, as is Ireland, on their way to economic independence and prosperity. From that perspective, it is unfair that this has been allowed to drag because of national issues that are blocking Europe's progress as an entity and not simply Ireland's return to economic independence.

Deputy Peter Mathews

Hear, hear.

The Taoiseach

All Members have discussed the Single Market, the 500 million potential consumers and about what can be achieved by the European Union. However, the projections for the next 20 years do not rate Europe and one reason for this is that Europe must consider where it is headed. One measure it can take and which I will raise at the meeting in June, is the need to consider how the ESM can be structured in a way to help countries to help themselves when it comes into effect in July 2013.

Deputy Peter Mathews

Restructure.

The Taoiseach

Second, in respect of those countries that are meeting serious austerity and economic challenges at present, Europe should be prepared to help and not hinder their progress towards economic prosperity. From that perspective, the Minister, Deputy Noonan, on behalf of the Government and the country, will continue with his work with the Finance Ministers. For my part, as Head of Government, I am prepared to debate this matter at the Heads of Government meeting and will signal that to the other leaders well in advance.

Deputy Micheál Martin

That is a welcome change from last week——

Deputy Bernard J. Durkan

It also is a welcome change from Deputy Martin's time.

Deputy Micheál Martin

——when the Taoiseach stated he would raise it if someone else raised it.

The Taoiseach

No.

Deputy Pat Rabbitte

Given the Deputy's party left us in this mess, one would think he would support the Government.

An Ceann Comhairle

Sorry, Deputies please. I once again remind Members that we are on Leaders' Questions. The person asking the question has two minutes and those replying have three minutes.

Deputy Billy Kelleher

No answers are forthcoming.

An Ceann Comhairle

Thereafter, there is a minute for each supplementary question and reply. We spent more than four additional minutes on that last question and I cannot allow this any further. Members are complaining about a lack of time for other business and we now are going to adhere to the Standing Orders. I call Deputy McDonald, without interruption.

Deputy Mary Lou McDonald

I wish to read something to the Taoiseach, which states:

The IMF-EU bailout deal has not and will not restore investor confidence in our country, and must therefore be renegotiated to reduce the interest rate and to ensure a fairer sharing of the cost of fixing Ireland's broken banks. The current deal is bad for Ireland — and bad for Europe

The Taoiseach of course recognises those words because——

The Taoiseach

I do. I know them well.

Deputy Mary Lou McDonald

——they come from the Fine Gael general election manifesto and comprise that party's reflections on the lousy legacy left by its friends in Fianna Fáil, now on the Opposition benches.

Deputy Jerry Buttimer

It makes for good reading, does it not?

Deputy Niall Collins

It is a "Riverdance" moment.

(Interruptions).

An Ceann Comhairle

Sorry, Deputies.

Deputy Mary Lou McDonald

I wish to ask the Taoiseach about the sustainability of the so-called bailout. Yesterday, despite what the Taoiseach stated in the Chamber this morning, the Minister for Finance, Deputy Noonan, performed yet another of the U-turns for which the Government is fast becoming famous. He informed Members that he now is backing down on Fine Gael's stated and hyped demand for a reduction in the interest rate in the face of French intransigence. While the Minister was quick enough to embrace French Finance Minister, Christine Lagarde——

Deputy Paul Kehoe

The Taoiseach never said that.

An Ceann Comhairle

The Deputy, without interruption please.

Deputy Mary Lou McDonald

——in her bid for the top job at the IMF, Ms Lagarde has shown very little regard for the position in Ireland.

An Ceann Comhairle

Can we have a question?

Deputy Mary Lou McDonald

On 11 March, the Taoiseach set out his stall in a bullish fashion at EU level in respect of corporation tax. I remind him that on 15 March, he told the Dáil that a cut in the interest rate had been secured.

An Ceann Comhairle

The Deputy's two minutes are nearly up. Can I have a question please?

Deputy Mary Lou McDonald

On 23 March, the Minister for Finance reiterated this point.

An Ceann Comhairle

Can I have a question please?

Deputy Mary Lou McDonald

Here is my question.

(Interruptions).

An Ceann Comhairle

Please, the Deputy is over time.

Deputy Mary Lou McDonald

If I may pose it.

Deputy Brendan Howlin

Posing overtime.

Deputy Mary Lou McDonald

There is no point in the Taoiseach crying over how unfair is the world.

An Ceann Comhairle

Sorry, could I have the question?

Deputy Mary Lou McDonald

Will the Taoiseach raise the issue of the interest rate reduction for all of the deal? More importantly, will the Taoiseach urge our European colleagues to finally look in the eye the issue of the unsustainability of the debt burden and take measures to resolve that issue, which is at the core of our problems?

An Ceann Comhairle

I thank the Deputy.

Deputy Caoimhghín Ó Caoláin

Hear, hear.

Deputy Peter Mathews

Of course we are looking at it.

Deputy Caoimhghín Ó Caoláin

The Government would want to do something about it.

An Ceann Comhairle

Can we have a reply of three minutes?

The Taoiseach

The Deputy is very good at quoting from the Fine Gael manifesto. What I stated on my return from Brussels was that the principle had been agreed of interest rate reductions for countries in the EFSF bailout. The Deputy indicated that I had stated that it had been secured.

Deputy Michael P. Kitt

Dúirt bean liom go ndúirt bean léi.

The Taoiseach

I never said that. If the Deputy intends to quote me, I ask her to do so accurately.

Deputy Niall Collins

It is like the Taoiseach and Obama.

The Taoiseach

What I said was that the principle had been accepted and the decision was made subsequently to devolve responsibility for that negotiation to the Finance Ministers, which matter is being pursued. The Deputy should appreciate that both myself, the Minister for Finance, the Tánaiste and the Minister of State with responsibility for European affairs, Deputy Creighton, have raised the issue of the interest rate reduction with very many countries and very many connections such as Hungary, Poland, Germany, France, the Netherlands, Slovakia, Greece, United Kingdom and others and we will continue to do so. I expect that the principle that was accepted here of an interest rate reduction is what is now being pursued by the Minister for Finance. I make the point again that I believe that the difficulties being encountered in Greece and to a lesser extent, in Portugal, are of serious concern to the eurozone countries and must be looked at in a very serious light. From that point of view, I believe that Europe must look at where it is headed and how it can best support those countries in a bailout situation. In Ireland's case, we are meeting very difficult and challenging circumstances but are on track to and the assistance that has been agreed in principle should be applied to our country. That is why the Minister for Finance and his colleagues are pursuing this at their level of responsibility. Deputy Martin asked if we are funded until the end of this bailout and I answer that we are, until well into 2013. One could ask the question about the United States, whether that country is funded through to 2013. President Obama has had to make some serious changes.

(Interruptions).

The Taoiseach

I wish to be very clear that we are not shifting from our position of support for corporate tax; we are not moving from negotiating an agreed principle of a reduction in interest rates which would be of some assistance to Ireland. I might point out that the deal which was done has been renegotiated by this Government in respect of no further transfers to NAMA, a reversal of the minimum wage cut brought in by the previous Government and the approval for a jobs initiative to stimulate our indigenous economy.

Deputy Michael McGrath

It did not save us a cent.

The Taoiseach

All of those were negotiated with the troika by the current Government.

An Ceann Comhairle

I will allow a one minute supplementary question.

Deputy Mary Lou McDonald

I am beginning to suspect that the ten years of the bailout agreement will have run out and the Taoiseach will still be coming in here telling us that he will do the business on the interest rate.

Deputy Pat Rabbitte

Deputy McDonald will still be making the same speeches.

An Ceann Comhairle

A supplementary question, please Deputy.

Deputy Mary Lou McDonald

The Taoiseach continually refuses to deal with the issue of burden-sharing, an issue which he was very keen on during the election campaign. Last week, senior unsecured and unguaranteed bondholders in Anglo Irish Bank were paid in full for a bond of €200 million. At the same time, the Government was running around looking for €100 million in respect of the fair deal scheme to give some comfort to the elderly.

An Ceann Comhairle

A supplementary question, please Deputy.

Deputy Mary Lou McDonald

When will the penny drop with the Taoiseach and his colleagues that the issue of the private debt with which the State has been burdened must be dealt with? He correctly said that other member states act in their national interest.

An Ceann Comhairle

The Deputy is over time.

Deputy Mary Lou McDonald

Well done to the Taoiseach for figuring that out; the challenge for him is to act in the interest of this State and its citizens and so far, he and the Minister for Finance, Deputy Noonan, have abjectly failed in that task.

(Interruptions).

The Taoiseach

The Deputy can be assured that this Government will always act in the national interest and will never be afraid to say so. In that regard, the Minister for Finance has taken action in respect of subordinated bondholders. The Deputy will be aware of court actions, some of which are being withdrawn and some are still proceeding. What was not an area in which we could go before now has the capacity to yield substantial funding and savings in respect of burden-sharing. The Minister for Health has completed his analysis of the difficulties in respect of the fair deal scheme and will report to the House tomorrow.

Deputy Finian McGrath

I wish to raise the important issue of education and I ask the Taoiseach to join with me in wishing well all students sitting the junior certificate and leaving certificate examinations this morning, to wish them well for the future and also to thank the teachers and parents for their magnificent effort and the often extra hours devoted to providing this educational service. Will the Taoiseach agree that education is a major strategy for ending poverty and disadvantage? Will he also agree that education should be top of the agenda to achieve economic growth and social inclusion? Why then are the Taoiseach and the Minister for Education and Skills cutting supports by 10% for children with special needs?

Deputy Simon Harris

We are not.

Deputy Finian McGrath

Will the Taoiseach agree that cutting educational services will affect the neediest in society?

Deputy Emmet Stagg

That is scaremongering.

An Ceann Comhairle

Order, please.

Deputy Finian McGrath

It is time to face reality. Why is the Government giving €100 million per year to 55 fee-paying wealthy secondary schools and €8 million of taxpayers' money in building projects for the most privileged in our society while cutting services to the most needy pupils? Many Labour backbenchers agree with those sentiments.

Deputy Colm Keaveney

Did the Deputy vote for Bertie?

Deputy Finian McGrath

Where does this fit in with all the talk of fairness and promises not to cut front line services as promised before the general election? In simple terms, this means that a school with 25 hours——

An Ceann Comhairle

Please ask a question, Deputy.

Deputy Finian McGrath

——of special teaching services will now have 2.5 fewer hours per week.

Deputy Simon Harris

Wrong. This is not the case.

Deputy Finian McGrath

Can the Taoiseach explain and justify this situation to the Irish people?

The Taoiseach

I too wish all young students, boys and girls all over the country, the very best in their examinations which start this morning. It is a trying period for many of them. Like many others I had to send a text this morning to wish somebody the best of luck. I too wish to be associated with the Deputy's remarks about the teachers and parents and all who support the next generation. Yesterday, on the steps of Government Buildings, the Dell Corporation announced that its first global siting of a cloud computing facility here was built around the capacity of our young people to meet the various challenges coming down the line. From that point of view, I share the Deputy's sentiments completely.

I also agree that education must be regarded as a priority by any government as a country faces the challenges of the future and the Minister for Education and Skills, Deputy Quinn, has said so on many occasions. Indeed, I read his report in this morning's newspaper about his own leaving certificate and he was honest and truthful enough to say that the leaving certificate he sat in 1964 would not now qualify him for architecture, his chosen profession in which he was very successful ——

Deputy Billy Kelleher

He was not honest and truthful with regard to college fees.

The Taoiseach

Deputy McGrath has raised a number of issues about the funding of fee-paying schools. The Oireachtas committees will be established today and they will start their work next week. There is clearly a need for a discussion about many of the issues raised by the Deputy. As regards the special needs assistants, the Minister announced 90% of the allocation and there will be more special needs assistants teaching and doing their work this year than previously. However, in order to comply with the regulations and conditions, the Minister announced 90% of the allocation as a start. The report into the position of special needs assistance deserves serious debate by this House because it contains some recommendations and revelations that are quite startling in respect of the pressure on professionals to declare children as being in need of special needs assistance when many of them might well not require that assistance for the duration of their school days.

Deputy Finian McGrath

I thank the Taoiseach for his response. I urge him to prioritise education so it is given stronger support. I understand the state of the economy but I ask him to re-examine the €108 million given to wealthy schools. A cut of 50% or €54 million would have a major impact on disadvantaged schools.

People regularly ask the Technical Group to put forward proposals. I have made a sensible proposal. I again ask the Taoiseach to examine the use of money, such as the €17 million overtime bill for unheard court cases. This is an example of the waste of public money.

I ask the Taoiseach to speak out about the cuts in educational services. It is not an option. I have put forward sensible options. We cannot run literacy campaigns and, at the same time, cut the very services that will help children to read and write.

The Taoiseach

The Deputy is aware that the Government has initiated a comprehensive spending analysis and review for the first time ever under the new department for public expenditure and reform. The new Minister, Deputy Brendan Howlin, will have clarity about the value for money we are getting for moneys voted for in this House. This is the place where the issues raised by the Deputy should be debated.

He is aware of the difficulties we had in respect of fee paying schools. It is not as clear as he might indicate. There are allocations for religious denominations in that Vote——

Deputy Finian McGrath

That is what I said. There has been a 50% cut.

The Taoiseach

——and there is a sensitivity about that. I share the Deputy's view that no more than any other Department, the Department of Education and Skills is and should be subject to a comprehensive spending analysis to determine, within the constraints that are upon us, what best effect we can get in delivering services for children in order that they can give of their best and achieve their potential in later life. The Deputy will have ample opportunity to give his view on that as time goes on.