Before I call Deputy Martin, I remind those involved that they have two minutes to ask questions, the Taoiseach has three minutes to reply and one minute is allowed for supplementary questions.
Leaders’ Questions
The Taoiseach said last week that the European Union deal was unique to Greece, would not harm Ireland and cause no damage. Despite the pre-election promises of Fine Gael and the Labour Party on the burning of bank bondholders, they subsequently did nothing about them. Although they had spent months promising the people that they would burn bank bondholders, the Taoiseach did not even put the issue on the negotiating table. This was in sharp contrast with Fine Gael's pre-election promises and the commitments made by him and the Minister for Finance, Deputy Noonan, in regard to what it would do in the Government's first 100 days in office.
In June the Minister for Finance announced in New York that the Government did not intend to give another cent to the banks, without burden sharing with senior bondholders. He described Anglo Irish Bank as a warehouse as it received no deposits and gave out no loans. These bank bondholders were not part of the EU-IMF deal or any bank guarantee, yet the Government is planning to sign-off on a payment to them today of €775 million. It is worth pointing out that it was Fine Gael's and the Labour Party's promises to burn these bondholders that drove down the price of the bonds. The investors who bought them will have doubled their money in the past nine months on the basis of the commitments given by Fine Gael and the Labour Party. The Government can hardly complain about speculators making money on these bonds when it was its empty promises that drove down their price and created the opportunity to make these gains. Last December, the Minister for Finance, Deputy Noonan, spoke about the obscene situation in which the poorest of the poor, through taxes and welfare cuts, were being asked to guarantee the speculation of investors in hedge funds and he declared that Ireland has no moral or legal obligation to cover this debt, yet this is exactly what he intends to do today.
A question, please Deputy.
The Taoiseach has failed to deliver and has failed even to put the issue on the negotiating table.
A question, please. The Deputy is over time.
This is a Second Stage speech.
Does the Taoiseach now regret making——
The Deputy is over time and he should put the question.
In short, does the Taoiseach regret misleading the Irish people on this very specific issue?
The Deputy should know all about that.
The Taoiseach has three minutes in which to reply.
I thank Deputy Martin for the history lesson. He left out some of the important bits. Politics is never a case of——
Telling the truth.
——swanning around making easy decisions——
(Interruptions).
The situation in this country was clarified by the people last February when they gave this Government, comprised of the Fine Gael and Labour parties, the largest majority in the history of the State, to pursue a policy of growth and not default. That is the first point.
Under false pretences.
Frankfurt's way or Labour's way.
On looking at the books as we found them, a total of €17 billion had been paid to bondholders in Anglo Irish Bank by the previous Government. I wish to say directly to Deputy Martin that I would love to stand up here and say it is not necessary to pay this money——
The Taoiseach said it before.
We made a case to the European Central Bank when I spoke to Mr. Trichet in March when we were considering bondholders and the other Irish banks. It was not possible to get the consent and the agreement of the European Central Bank. As the Deputy will be aware, 17 governors make up their minds in this regard——
Why did the Minister for Finance, Deputy Noonan, go to New York on day 99 and make comments to the contrary?
When the Minister, Deputy Noonan, spoke on a number of occasions and negotiated with Mr. Trichet about the question of bondholders in Anglo Irish Bank, the European Central Bank would not give its agreement. I admit it has not been possible for this Government to unravel the agreement that was made by Deputy Martin's Government——
(Interruptions).
Following this, we have pursued an alternative——
Deputies should listen to the reply, please.
——policy of having the debt burden reduced——
The Taoiseach is misleading the House.
(Interruptions).
If the Government had defaulted on these bonds, we would not have had the support of our colleagues to get a €10 billion reduction in interest rates.
(Interruptions).
A Deputy
Jerry, you are very quiet over there today.
He is some liar, I will tell you that.
A Deputy
Pull the trigger Willie.
He is some liar.
Every member of this Government, including the Taoiseach and those sitting behind him, was elected on a commitment not to pay the full €700 million to the Anglo bondholders, which is being repaid today. He can dress up his position in all of the brazen nonsense he wants——
I will read it out for those opposite.
——but he cannot wriggle out of his own clear words. In fact, the value of the bond collapsed in February as a result of Fine Gael and Labour statements and commitments and since then, the Taoiseach has done absolutely nothing to implement his commitments. It is incredible the lengths to which he has gone not to burn these bondholders.
We would have gone down the tubes.
Could I have the Deputy's supplementary question, please?
The Taoiseach stood on many occasions and on many a platform saying he would not pay these bondholders. At the four crisis summits he has attended——
A supplementary question, please Deputy.
——he did not table any measure to allow the burning of these bondholders; he did not meet Mr. Trichet about it; he did not meet Mr. Draghi about it when he was appointing him as the president of the ECB; and he did not raise it with his close friend, Chancellor Merkel. The Taoiseach made a solemn promise of not another red cent more. If he was told in March——
I must have the Deputy's supplementary question.
——what was the Minister for Finance, Deputy Noonan, doing in June in New York telling the world he would not pay these bondholders? He told RTE but he did not have the guts to say it to the bankers on that occasion.
The Deputy is over time.
Everything the Taoiseach says in here means absolutely nothing; his words mean nothing——
The Deputy should please resume his seat as he is over his time.
——his words mean nothing in here.
(Interruptions).
Could we do without the chorus for a minute, please?
There is no question in Deputy Martin's comments. I remind him he was not present at any of the discussions that took place during the four meetings I attended, nor at the discussions I had with either Chancellor Merkel or Mr. Trichet.
The Minister of State, Deputy Creighton, stated the Taoiseach would not put this on the agenda for the Dáil. I did not need to be at the meeting.
I know that——
(Interruptions).
This is very serious.
Resume your seat, Deputy Martin. Cut out the play-acting.
I beg your pardon, a Cheann Comhairle, this is not play-acting.
Look up at the media.
The Fianna Fáil Party——
Deputy Buttimer spent a fair bit of time looking at the media.
Heckler of the year.
In the past, the Fianna Fáil Party had ways of finding out what people were saying when it was not supposed to be listening. We remember that in this House.
That was more than six months ago.
I remind Deputy Martin that when we found it was not possible to unravel the agreement his Government made with our external partners, we pursued an alternative strategy.
The Taoiseach did not even try.
The Taoiseach is misleading the House again.
Will Deputies stay quiet, please?
Any comment I made on this was on the basis of not committing another cent to Anglo Irish Bank beyond what was already committed. It has not asked for more money and it will not get more than has been committed.
Thank you, Taoiseach. We are over time.
We would not have got a €10 billion reduction in interest rate appreciation if we had defaulted.
You had nothing to do with that. Stop spinning.
(Interruptions).
We would not have got long-term guarantees of this money and would not have got the support of our colleagues.
The Taoiseach is the best man I ever saw for claiming he scored goals with his hind legs.
What is required is a clear head, the retention of our confidence and our reputation. We are not going to scuttle this ship while there are challenging waters ahead.
Hear, hear.
People know we are proceeding with our reputation enhanced. Ireland always pays its way and although I do not like to have to do this, in the interests of our people and the long-term future of our country, we cannot unpick what Deputy Martin's Government did. We are pursuing alternative strategies to have the debt burden reduced.
Deputies
Hear, hear.
Is the Minister, Deputy Howlin, going to Greece to give it a hand with its referendum?
I call Deputy Adams.
We will send Deputy Durkan to Greece too.
Deputy Durkan should get in contact with Deputy Kelleher and they should do a course in how to behave themselves in the Chamber.
Is leis an phobal an t-airgead seo, ach inniu tabharfaidh an Rialtas €700 milliúin d'airgead an phobail d'Anglo Irish Bank. Seo rogha an Taoisigh. Ni bhaineann sé le Fianna Fáil ach leis an Taoiseach agus an Rialtas. This is the Taoiseach's choice, his decision. He did not even allow a debate on this issue yesterday in the House. Why is the money being paid? This bank is fully nationalised. A total of €30 billion of taxpayers' money has been ploughed into it.
I offer a suggestion as to why it is being paid. The golden circle is still in place. The chairman of this bank, formerly known as Anglo Irish Bank, is a former leader of Fine Gael. He still keeps his double pension, worth €100,000 a year, as well as receiving €150,000 in yearly salary from his present position as chairman. He thinks these bondholders should be paid with the people's money and the Taoiseach agrees. It is the Taoiseach's choice and the people have to pay for it.
Why does the Taoiseach not telephone Mr. Alan Dukes before 12 noon and tell him not to pay this money? Will he name the bondholders? Who are they? Let us have their names and a wee bit of transparency on this issue.
The answer to the Deputy's question is twofold. I do not know the names of the bondholders, nor does the Government.
You should know.
I have no intention of getting on the telephone to Mr. Dukes. Any decision we take will be made in the best interests of our people and our country. I do not like the unfair situation in which we are not able to unravel an agreement made with external parties.
Rubbish.
There is no agreement.
What agreement is that?
I have no intention of turning this country into some kind of sub-Saharan state, by virtue of reckless decisions that might be made. We are pursuing an alternative strategy based on growth and the reduction of the overall level of debt burden. That has been achieved to an extent in respect of the interest rate reduction and the changes to the memorandum of understanding, which have enabled us to reduce PRSI and VAT, to create jobs and to provide a jobs and growth stimulus that is getting our people off the dole and back into work. That is what good politics is about. The decisions that were made last Sunday at the European Council meeting and by the members of the eurozone——
The Greeks will not agree to it.
——guarantee funding for Ireland and other countries that are in a programme. They guarantee that if we measure up, we will have the support and confidence of our colleagues. That is the way we want to be. The longer-term picture for this country is a return to growth, rising employment, expressions of confidence by means of deposits in the Irish banks, continuing investment from abroad and rising confidence in small and medium sized enterprises, one in five of which will be back in the employment business next year. We require a clear focus and a steady head so we can retain our reputation and our confidence. If Deputy Adams goes to his local furniture store in Dundalk and offers the owner half the price of a suite of furniture, I am quite sure his reputation and his integrity will suffer as a consequence. Similarly, with this country——
This is more serious than furniture.
This country has always paid its way and has always paid its debts.
There is no agreement on the bondholders.
We are pursuing an alternative strategy in the interests of Ireland and its people.
I have to say the Taoiseach's metaphors are suffering a lot, but not——
They are inappropriate.
——as much as the people on trolleys and in hospital corridors, the half a million people on the dole, the thousands of young people who have been forced to emigrate and the children who cannot get special needs assistance. The Government intends to pay a further €1.25 billion to these unguaranteed gamblers and speculators. It is not part of the memorandum of understanding. These bonds are unsecured and unguaranteed. Sinn Féin will do its very best to stop the Government from giving the people's money to these elements. We will propose an amendment to today's Order of Business asking that a motion be taken. I am giving the Taoiseach notice of it so he will have a chance to think about it.
The Deputy should ask a supplementary question.
I will. The motion we would like to propose asks the Dáil to oppose the handover of €700 million of taxpayers' money by Anglo Irish Bank — Irish Bank Resolution Corporation — to unguaranteed and unsecured senior bondholders.
That is totally out of order.
We are calling on the Government to instruct the chairperson of Anglo Irish Bank, Mr. Alan Dukes, to withhold this payment, which is due to be made today. Will the Taoiseach do that?
No, I will not do that. The Deputy has said it is not part of the memorandum of understanding. It is not.
I thank the Taoiseach.
It is following on the commitment entered into at the highest level by the previous Government and our external partners.
You are the new Taoiseach.
It is not part of the memorandum of understanding that the European Central Bank should pay €150 billion into the Irish banks. It is not part of the memorandum of understanding that our European colleagues should give this country a €10 billion reduction in interest rates.
We are paying their banks.
It is not part of the memorandum of understanding that this Government is in a position to renegotiate the memorandum in a way that creates jobs and employment opportunities for every person in this country.
How can we create jobs by sending our money overseas?
Our programme is based on growth rather than on default. The sort of nonsense the Deputy is going on with is a road I will not follow.
It is fair to say that nobody in this House blames the Government for the situation in which it finds itself today vis-à-vis the bondholders. The Government was elected with a mandate to choose to remedy the situation or to repudiate the last Government’s agreement on this. It has decided to do neither. It has decided to go down exactly the same road that was adopted by the last Government. I would like the Taoiseach to put himself into the minds of some of those traders who bought these bonds since he came into Government earlier this year. They made a judgment. When they looked at the market, they had to decide whether the Government would sting or burn them, or would give them a bonanza. Let me remind the House that earlier this year some people were picking up these bonds at a price below 60 cents in the case of larger volumes. They decided to buy because they believed the Government would sting taxpayers as opposed to buyers of bonds. The individuals or dealers in question have made a profit of nearly 70% on the back of the Irish taxpayer. They got it right because, unfortunately, they measured the Government correctly. The Taoiseach had two opportunities to act and I ask the reason he did not take them.
The Deputy should ask a question.
Yes. The straightforward option was to tell the bondholders the Government would not pay. The second option was to instruct the bank to embark on a buy-back campaign at a price of 60 cents or higher. Why did he not do so given that he would have saved the taxpayer a fortune?
Deputy Ross makes the point that the Government was elected with a very strong mandate either to remedy or repudiate the situation. The Government sought the agreement of the European Central Bank to repudiate the situation in so far as bondholders were concerned. The ECB refused to give its agreement or consent for such a move and did so in the most trenchant fashion, both when I spoke to Mr. Trichet and on the numerous occasions on which the Minister for Finance spoke to him. As it was not possible to reverse the position, the Government pursued an alternative strategy based on trust, confidence, integrity and Ireland paying its way. The consequence of this strategy has been that we have secured the support of our colleagues in Europe. This is self-evident in the changes that have been made to the memorandum of understanding in so far as the Government's priority for job creation and providing incentives for employment is concerned and in the support shown by our colleagues by agreeing to a substantial interest rate reduction, one which will result in a saving for the Irish taxpayer of €10 billion over the period of the programme. It is also self-evident in the support, even at last Sunday's meeting, for countries such as Ireland which are in a bailout scenario.
While the agenda for last week's meeting was focused principally on Greece, the restructuring and recapitalisation capacity for leveraging the European Financial Stability Facility, EFSF, and future governance requirements, Ireland, as a small country that was not directly in focus — no more than Portugal was — was the recipient of very strong support from our eurozone colleagues. The concern, which resulted in Prime Minister Berlusconi having to bring a 15-page document to the eurozone meeting, speaks for itself about the priority attached to the situation in Italy. At the meeting, a good deal of comment was made about the potential catastrophe facing the eurozone if things were suddenly to go wrong. From that point of view, Ireland has pursued a very steady course. We are pursuing alternative approaches to having the burden on our taxpayers reduced. The decision made last weekend allows for further discussions and negotiations in that respect and the Minister for Finance will pursue the matter with other Ministers for Finance. I did not instruct the bank to buy back the bonds at a reduced rate.
As I did not hear the final part of the Taoiseach's reply, I apologise in advance if I ask a question he has already answered. I do not accept the premise that we must seek the permission of the European Central Bank for everything we do, particularly in areas such as this. Did the Taoiseach consult the ECB about a buy-back of Anglo Irish Bank bonds and if not, why not given that a buy-back would have saved a substantial amount of money?
What we agreed to here was the facility made available in respect of the flexibility provided by the EFSF and that is the facility by which this issue can be pursued. As has been pointed out on a number of occasions by the Minister for Finance, were the Anglo Irish Bank position to be captured by the EFSF and dealt with in Ireland over a longer maturity period with a lower interest rate, the savings that would accrue to the taxpayer would be substantial. The facility agreed to last Sunday will allow that to happen. In a situation where we are not in control of our economic sovereignty, it is critical that the conditions we have signed up to and those we have renegotiated and changed be adhered to. While the economic turmoil and confusion are challenging and difficult for the people, it is the longer-term picture of employment, getting out of the bailout and restoring our economic sovereignty which is at stake. Obviously, I do not speak for bond investors on the decisions they make. However, the flexibility allowed for will, with the continued support of our colleagues, help us through this difficult period. I know we will get through it with our reputation and integrity intact which will in itself attract future and continued investment and support from our eurozone colleagues.