Dáil Éireann debate -
Tuesday, 25 Oct 2011

Vol. 744 No. 4

Leaders’ Questions

Deputy Micheál Martin

I wish to express my sincere sympathy to the family of Garda Ciaran Jones who, though off duty, was trying to assist others in the very sudden flooding which occurred yesterday. His last act was one of great bravery and courage and our sympathies go to his family and friends and also to the young woman who also died. She was found dead this morning as a result of the flooding. I pay tribute to all the emergency personnel for the work they did.

From the little that has been revealed so far, it is hoped there will be sign-off this week on a package of measures which will see the eurozone out of crisis mode. Unlike the governments of other countries, the Taoiseach has not told the House or the people about either his negotiating position or what has been proposed. The Bundestag is receiving a very detailed presentation on exactly what is being discussed, yet all we have heard from the Taoiseach and members of the Government is vague generalities that he expects everything to be all right on the night. Separate to this, his Ministers had been accepting praise for a budget which they voted against.

Will the Taoiseach tell the House exactly what is Ireland's position in regard to these negotiations? Are we supporting a Greek restructuring of up to 60% in terms of a debt write-down? If Greek sovereign bondholders are being burned widespread recapitalisation of banks will have to be undertaken. This represents the first and probably only opportunity we will get to force bondholders to share the burden in Ireland. That is hugely important for us as a country because the two consistent road blocks to burning bondholders in the Irish banks will be removed. A sovereign default and bank recapitalisation are what we were told would be risked by unilateral action.

Has the Taoiseach put this issue on the summit agenda for discussion? Will he insist there will be no deal unless our concerns are addressed? To miss this first and probably only opportunity to burn senior bank bondholders would be an opportunity lost. Will he confirm if he discussed the specific issue of not restructuring Ireland's bank debt with Chancellor Merkel on Sunday last?

The Taoiseach

I join with the Minister for Justice and Equality and Deputy Martin in respect of the tragic incident in which Garda Ciaran Jones lost his life. I am aware of the general circumstances that Garda Jones, who was off duty, was attempting to help persons in distress when this tragic accident occurred. I am also aware of the death of a Filipino national. We extend our sympathies to the two families on what is a tragedy for them arising from the excessive rainfall yesterday and the consequent flooding.

In response to Deputy Martin's question on the euro, this is a serious matter. The German Chancellor must have the authorisation of the Bundestag for any agreement beyond what was already approved in September. That is why she is addressing her Parliament in respect of that approval.

A broad range of issues was discussed at the meeting of the 27 member states of the European Union. It was not strictly related to the eurozone crisis but that was a central part of the discussion in the latter part of the meeting. The fundamental questions to be answered were raised by a number of speakers. On behalf of this country I made the point strongly, which received support from other countries, that the decisions which it is hoped will be taken on Wednesday, cannot be taken in isolation. They are all interlinked and connected. The fundamental questions being asked were whether we can afford to let Greece default; if €109 billion is sufficient to rescue the situation; to what extent and by what method the ESFS fund can be leveraged; and how a guarantee and to what extent the so-called firewalls can be put in place to prevent contagion and serious issues arising for other countries. Those central questions were the focus of a response from leaders.

For our part I voiced that opinion exceptionally strongly and it received support. The discussions that are ongoing are complex and technical in respect of what needs to be done if the situation is to be rescued. I cannot give any further detail beyond what was discussed at the meeting, both of the eurozone and of the 27 European Union member states. Deputy Martin indicated that the German Chancellor is giving a detailed response to the Bundestag, but that level of complex detail was not discussed at the meetings of the eurozone or the 27 member states.

There was an agreement on the range of the discussions that would take place between the technical people who are looking at the involvement of the private sector in the banks in the Greek situation. Suffice to say that although Prime Minister Papandreou was of the opinion originally that his country could get back to the bond markets at the end of 2012 it is now clearly the situation that Greece will not be able to get back to the bond markets until 2020. That means the situation for Greek citizens will be severe and austere for the next ten years.

The ECOFIN meeting which was to be held tomorrow is now cancelled. Either that means there has been some conclusion at the technical discussions or else that all of this will go to the leaders meeting tomorrow evening at 6 p.m. I cannot give any further update on the matter because officials from the Departments are in Europe at the moment.

Deputy Micheál Martin

I asked the Taoiseach a specific question not about detail. This has always been a serious and complex issue that has involved technical detail. The fundamental question I asked the Taoiseach was about his negotiating position. What is he putting on the table in respect of the Irish position? Is he putting on the table that we——

Deputy Bernard J. Durkan

What was Deputy Martin's position last year?

Deputy Leo Varadkar

Does Deputy Martin expect us to put our negotiating position on the table now?

Deputy Micheál Martin

——would seek a restructuring of Irish bank debt, in particular for Anglo Irish Bank? Have we put that on the table? Is the answer "Yes" or "No"? This Parliament is entitled to a basic response to the question. The reason I ask the question is because the Taoiseach made a big deal of that not so long ago, as did the Minister for Transport, Deputy Varadkar, the Minister for Finance, Deputy Noonan, in New York, and the Minister for Jobs, Enterprise and Innovation.

Deputy Bernard J. Durkan

Deputy Martin made a very small deal out of it. He was part of the Government that got us into the mess in the first place.

Deputy Micheál Martin

The Taoiseach said that the banks would not get another red cent beyond the agreed €35 billion until they showed how they would impose losses on all bondholders and creditors. The Tánaiste, Deputy Gilmore, said it would be "Labour's way orFrankfurt's way". Has the Taoiseach resiled from that commitment?

Deputy Michael Noonan

If there was no guarantee there would be no losses.

Deputy Micheál Martin

Do we now take it that all that sort of talk, hype and commitment is dead and buried and is no longer on the table and that the Taoiseach is no longer pursuing it with his European colleagues?

The Taoiseach

No, Deputy Martin cannot take that for granted and he cannot assume that. The negotiating stance of the Government is to reduce the overall debt burden on Irish citizens.

Deputy Micheál Martin

That is not the question.

The Taoiseach

A number of changes have been negotiated in the Memorandum of Understanding that was signed off by the previous Government for the benefit of Irish citizens by the Minister for Finance and the Heads of Government. The interest rate reductions in July will amount to savings of approximately €10 billion over the period of the programme.

Deputy Micheál Martin

The Greek crisis——

The Taoiseach

Deputy Martin asked whether I put the specific question of Anglo Irish Bank on the agenda. The question is why we have to pay Anglo Irish Bank if Greece gets a write-down. Deputy Martin should know that because the Government of which he was a member——

Deputy Micheál Martin

No, Greece is going to default.

The Taoiseach

——provided Anglo Irish Bank with €1 billion that it will have to pay later.

Deputies

Hear, hear.

The Taoiseach

That is the first point.

Deputy Micheál Martin

I asked the Taoiseach first, if the European Central Bank would——

The Taoiseach

The second point is that Deputy Martin came to the House with other Ministers——

Deputy Micheál Martin

The Taoiseach has gone back to the old games.

The Taoiseach

We are dealing with the consequences of the old days.

Deputy Micheál Martin

I did not say "days".

The Taoiseach

The promissory note signed off——

An Ceann Comhairle

Deputy Martin should please allow the Taoiseach to reply.

Deputy Micheál Martin

It is very difficult to get an answer to a question.

The Taoiseach

——by the Government of which Deputy Martin was a member has had devastating consequences for every taxpayer and citizen in the country. That is the fact of the matter. What we have to try to do in dealing with that horrendous legacy——

Deputy Micheál Martin

The Taoiseach said he would burn the bondholders.

Deputy Niall Collins

The Taoiseach has a chance now.

An Ceann Comhairle

Deputies.

The Taoiseach

——is to take all opportunities when we see ways of dealing with a reduction in the overall debt burden on citizens.

Deputies

Hear, hear.

The Taoiseach

We are not Greece. We are not in the same position as Greece.

Deputy Micheál Martin

That is because of decisions that were taken by the previous Government.

The Taoiseach

We are not facing ten years of austerity whereas Greece will never get back to the bond markets.

Deputy Bernard J. Durkan

Despite the previous Government's best efforts.

The Taoiseach

We do not seek a haircut in the way that Greece must have one, and the consequences for their citizens——

Deputy Micheál Martin

Greece is about to default on its debt. I am talking about the banking debt.

Deputy Michael McGrath

The Taoiseach should not say it is our debt.

The Taoiseach

——we will continue to negotiate in a variety of areas to reduce the debt burden on citizens. That is our agenda.

Deputy Micheál Martin

The Taoiseach will not tell us.

An Ceann Comhairle

I thank the Taoiseach.

The Taoiseach

I am pursuing that on a number of fronts.

An Ceann Comhairle

I thank the Taoiseach. I call Deputy Adams.

Deputy Micheál Martin

How many bankers——

Deputy Bernard J. Durkan

Where were the Deputies opposite for the past 15 years? It took them 15 years to sink the country to where it is.

An Ceann Comhairle

I called Deputy Gerry Adams.

Deputy Bernard J. Durkan

I am sorry a Cheann Comhairle. My apologies.

An Ceann Comhairle

I thank Deputy Durkan.

Deputy Billy Kelleher

Deputy Durkan should not trivialise a serious debate.

Deputy Alan Shatter

Deputy Martin has amnesia. His brain only started working after 9 March 2011.

An Ceann Comhairle

Please.

Deputy Gerry Adams

Mar a dúirt mé roimh an tseisiún seo, tá an-bhrón orainn faoin gharda óg, Ciarán Jones, a fuair bás inné agus faoin duine eile a fuair bás fosta.

I have asked the Taoiseach many times how he squares the Government's support for a write-off of Greek debt — I have no objection to that — while insisting that Irish people are impoverished and denied their rights as citizens in order to pay the debts of private bankers. On 2 November, the Government will authorise the payment of €700 million to unguaranteed senior bondholders in Anglo Irish Bank. That €700 million would pay for special needs assistants, new hospitals and resources for hospitals. Not paying the money would mean no welfare cuts, household charge or universal social charge. Ar bharr ar sin fosta, tá an Taoiseach sásta brú a chur ar ár muintir. Idir seo agus Mí Eanáir beidh €2 bhilliún á thabhairt do shealbhóirí. Sin airgead arbh fhéidir a chaitheamh ar leapacha d'othair agus ar dhaoine atá faoi strus ag an uair dheacair seo.

Ba mhaith liom go ndéarfadh an Taoiseach go soiléir go mbeidh sé ag cur stad leis seo. Ná bíodh sé ag tabhairt brontannais eile do Anglo Irish Bank. Why is it acceptable to write down Greek debt while Irish people have to pay private bankers? Why is money being cut from special needs assistants, hospitals, schools and other essential services while billions of euro are being given to unguaranteed bondholders?

The Taoiseach

Thug mé freagra don Teachta Adams ar an gceist seo go minic le cúpla seachtain anuas. Tá a fhios againn gur thug an Rialtas roimhe an t-airgead seo do Anglo Irish Bank chun na sealbhóirí a íoc. Is é atá ar siúl anois ná díospóireacht idir an Roinn Airgeadais agus an Rialtas ar thaobh amháin agus ár gcomhghleacaithe san Eoraip ar an taobh eile faoi chostas na híocaíochta atá ar dhroim mhuintir na hÉireann.

Ní hionann muidne agus an Ghréig. Níl an dá thír cosúil lena chéile ar chor ar bith. Tá a fhios ag an Teachta go bhfuil sé socraithe faoi láthair go mbeidh ar mhuintir na Gréige déileáil leis an bpróiseas seo are feadh deich mbliana as seo amach agus go mbeidh sé an-dian agus an-chrua orthu. Tá a fhios aige freisin go mbeidh an cóimheas idir an t-easnamh rialtais agus an olltáirgeacht intíre sa Ghréig ag seasamh ag 162% ag deireadh 2011 agus go n-éireoidh sé go dtí 187% ag deireadh 2013. Ní féidir leis an tír déileáil leis sin.

Deputy Gerry Adams

Ní féidir linn déileáil leis.

The Taoiseach

Sin an fáth go bhfuil ar mhuintir agus ar cheannairí an eurozone cinneadh a dhéanamh faoi seo. Sin an fáth go bhfuil na díospóireachtaí ar siúl faoi láthair. Ní hionann sinn agus an Ghréig agus níl ár muintir cosúil le muintir na Gréige ó thaobh chúrsaí eacnamaíochta de. Is é atá i gceist ag an Rialtas agus ag an Roinn Airgeadais ná déileáil le costas na híocaíochta atá ar mhuintir na hÉireann a laghdú. Táimid ag déileáil lenár gcomhghleacaithe ar thrí nó cheithre phointe.

Níor thagair an Teachta Adams nó an Teachta Martin do phoist, do infheistíocht nó do jabanna chur ar fáil.

Deputy Dara Calleary

Níl jab déanta ag an Rialtas fós.

The Taoiseach

Sin atá in gceist againn go lárnach. Ní féidir le tír ar bith ná le Rialtas ar bith déileáil leis an bpróiseas seo gan postanna a chur ar fáil do mhuintir na hÉireann agus do mhuintir gach uile thír eile. Sin atá i gceist againn.

Deputy Dara Calleary

Cá bhfuil siad?

The Taoiseach

Beimid ag déanamh díospóireachta ar na cinntí sin oíche amárach. Níl a fhios agam an gcríocnóidh an cruinniú sin go luath, ach beidh mé ann ar feadh na hoíche ar fad.

Thug an Rialtas roimhe an t-airgead seo do Anglo Irish Bank. Tá sé ann agus tá sé le híoc taobh istigh de chúpla seachtain. Táimid, mar Rialtas, ag déileáil le torthaí an chinnidh sin. Níl sé éasca.

Deputy Gerry Adams

Chuir mé ceist shoiléir ar an Taoiseach agus ní thuigim cén fáth nach bhfuair mé freagra soléir uaidh. The question is very straightforward. On 2 November the Government, and not the previous Government or Fianna Fáil, will pay €700 million. There is no onus on the Government to do so. It is not legally, morally or politically bound to do so. The money will be paid to unguaranteed bondholders. The money has been taken away from special needs assistants, hospital facilities and other necessary public services. Chuir mé ceist ar an Taoiseach why it is acceptable to write down Greek debt — I have no objection to that — while Irish people have to pay private bankers. It does not make sense.

It would be a great boost to people to know the Taoiseach is standing up for the citizens of the State. Two Irelands are developing under Deputy Kenny's leadership. There is the Ireland of the banker agus an ciorcal órga — the golden circle — and the Ireland of the ordinary people, who are suffering at the bottom.

Deputy Derek Keating

Deputy Adams is not suffering.

Deputy Jerry Buttimer

Deputy Adams know all about golden circles.

Deputy Bernard J. Durkan

Let us not go there.

The Taoiseach

I do not deal in the rhetoric of despair.

Deputy Billy Kelleher

This is the rhetoric of deceit.

Deputy Bernard J. Durkan

The deceit took place over a long number of years.

Deputy Timmy Dooley

Was Deputy Durkan not part of it?

The Taoiseach

I prefer to take an optimistic view of how our people and Government together can work through this economic challenge. This country is not Greece. Our citizens, while they are faced with a challenging position, are not in the same league as the Greek people.

Prime Minister Papandreou expected to be back in the bond markets by 2012.

Deputy Micheál Martin

He never really meant that.

The Taoiseach

It is now clear that with a debt to GDP ratio of 186% by the end of 2013——

Deputy Gerry Adams

Can the Taoiseach talk about Ireland? An labhróidh sé faoi Éirinn?

The Taoiseach

It will be another ten years before Greece emerges from this difficulty.

Deputy Adams asks what about Ireland. Every international commentator, except Deputy Adams, is now pointing out that the deal which was signed and which has already been renegotiated on three of four occasions by the Government is making serious headway.

Deputy Micheál Martin

The Taoiseach should come off the stage.

Deputy Jerry Buttimer

The Taoiseach is on the stage, and not Deputy Martin.

Deputy Micheál Martin

He voted against everything.

The Taoiseach

I would like to think there is a real understanding of just how serious this issue is, from a European point of view.

Deputy Billy Kelleher

At long last.

Deputy Gerry Adams

Can the Taoiseach give us the Irish point of view?

The Taoiseach

As was stated at last week's meeting in very trenchant terms, people are absolutely focused on the decisions that must be made.

Deputy Timmy Dooley

They are now. Can the Taoiseach tell us who was not focused?

The Taoiseach

First, can we let Greece default? Second, is €109 billion enough? Third, how will we leverage the EFSF to provide a firewall that will allow for the purchase of bonds and not cause catastrophe for any country? The focus of the eurozone may be on the bigger potential of Spain and Italy. However, as a country that is meeting the challenges of the memorandum of understanding and of our bailout situation, we want to ensure the decisions made are interlinked so all countries are protected and the Greek situation is recognised as being unique and that the decisions taken by the countries of the eurozone see to it that Greece is unique and that every other country is protected by that firewall.

Deputy Micheál Martin

It is interconnected. It is all related.

The Taoiseach

I assure Deputy Adams that the discussions and negotiations I am conducting on behalf of the Government, the Minister for Finance is conducting at ECOFIN——

Deputy Gerry Adams

On behalf of bankers.

The Taoiseach

——and the Minister of State with responsibility for European Affairs at the General Affairs Council are focused on attempting to get down the overall burden of debt on our people. We have achieved €10 billion by the reduction of the interest rate and we are exploring a number of options to get it down further. I am sure Deputy Adams welcomes that.

Deputy Shane Ross

I join the Taoiseach and other leaders in offering my sympathy on the tragic deaths of the member of the Garda and the Filipino national today.

One of this morning's newspapers used an unfortunate turn of phrase. I believe it was The Irish Times, which talked about the Italian Prime Minister getting a dressing down from the German Chancellor and the French President. It is important to ask the Taoiseach questions about burning bondholders and Irish default. However, the Taoiseach put his finger on the issue. Greece is not now the only problem in Europe. The game has moved on to Italy, which is a much more serious potential problem. Yesterday, Chancellor Merkel and President Sarkozy confronted the Italian Prime Minister and told him it was time for him to introduce far more stringent austerity measures. That is undoubtedly true. The Italian austerity measures are unsatisfactory.

Where does Ireland stand on the great quarrels that are going on among the European leaders? It is obvious there is a huge split given the Italian Prime Minister's robust response to France and Germany that he will not take dictation from them. Where does Ireland stand on the need for austerity in Italy? Where does it stand on the split between Prime Minister Sarkozy and Chancellor Merkel in regard to how much pain should be taken by those who invested in Greece?

The Taoiseach

I spoke to all of the personalities and leaders mentioned by Deputy Ross. For the first time in my attendance at these meetings there was a genuine focus on the fundamentals of what needs to be done. I too have heard the reports of the conversations between President Sarkozy and Chancellor Merkel with Prime Minister Berlusconi. However, I do not know the details in that regard. I am aware that the Italian Government approved an austerity programme. The question now is its commitment to implement it.

Deputy Ross asked where Ireland stands on austerity. No more than anyone else, we do not like it. However, we recognise that following the lifting of political carpets in departments one often finds a great deal of unseemly activity that went on in the past which must be cleaned up in the interest of getting out of a bailout situation. In regard to where Ireland stands on austerity, our people understand the challenge we face. We all want to get out of this situation as quickly as we can. I do not have any direction over Prime Minister Berlusconi. However, there were at the meeting which took place during the week some direct political comments about what needs to be done.

Deputy Timmy Dooley

What did the Taoiseach say?

The Taoiseach

To be honest, a number of prime ministers or leaders may not have been as sufficiently aware of the situation in other countries as they now are. At the conclusion of that meeting there was an understanding of how serious this is in the European context. The Deputy will have heard the comments of President Sarkozy about Ireland echoed by others. While we have done well, there remains a long way to go. No more than Portugal or any other small country, we want everyone to understand that if we are to get out of the bailout, we will need continued support for the path we are on.

My contributions to the various discussions on this matter were to remind people that all the decisions that must be made must be interlinked and must focus not alone on the bigger countries, but on all countries. As the Deputy correctly pointed out, contagion is not limited to the Greek situation or to any other individual country. The decisions to be made by the eurozone leaders tomorrow night must deal comprehensively and conclusively with this issue. It may well be that following those decisions details will have to be worked out, in some cases by the ECOFIN Ministers. There were serious expressions of concern by the leaders in regard to the potential that now exists to deal conclusively with this matter. That discussion went on for some time.

Deputy Shane Ross

I understand the Taoiseach's reluctance to become involved in another European spat. However, it is important that Ireland is not only perceived as the good poster boy of Europe who is abiding by the rules imposed on him by the IMF-EU and not getting involved in any of the great arguments taking place. The Taoiseach stated in response to my question that he is not in favour of austerity but that it is necessary. Where does the Taoiseach stand when it comes to other nations having to impose austerity on their people? It is all very well saying we have done it and done so successfully, but that is not the position in which I want to be. Where does the Taoiseach and Government stand on the two big powers of Europe saying that another country must impose austerity? Does the Taoiseach stand on one side or the other or is he neutral on the issue?

The Taoiseach

France and Germany never said at the meeting that country X or Y should now impose austerity measures. There was general discussion and agreement on the need for fiscal discipline and control over countries' spending. Ireland is in the difficult situation it is in because of such lack of control. It is not the case that Chancellor Merkel or President Sarkozy stated what a particular country should do, rather there were strident comments from many people about what needs to be done, including a discussion in respect of governance of the eurozone for the future. Comments were also made by countries not members of the eurozone in regard to their individual economic interests and so on.

Rather than focusing on the requirement for austerity measures in any individual country, there was a clear understanding that there needs to be far greater fiscal control in respect of any individual country and how it does its business. I pointed out for the benefit of the meeting that being in a bailout situation brings with it detailed and complex analysis on a fortnightly basis by a troika of the country's economic circumstances and that no money will be paid if it exceeds what has been agreed. The marker for Ireland is a return to the bond markets. We do not want that stymied or prevented or for there to be any loss of understanding of just how much encouragement and further assistance a country like ours needs as we proceed.

As pointed out by the Minister for Finance, Deputy Noonan, on many occasions we have achieved a saving of €10 billion for our taxpayers and we need more. In this regard, a number of options and alternatives are under discussion and negotiation. It is not a case of the big powers saying who must impose austerity measures and so on. There is a general acceptance that if Europe is to get this right, and if the eurozone is to plough ahead in a prosperous fashion, countries must ensure fiscal discipline in the manner in which they do their business. We are measuring up to the conditions of our programme. However, I do not want anyone to lose sight of the fact that while we have come some of the way, there remains a long way to go. We need further assistance and will continually point this out in the context of the overall decisions that must be made.