If Deputies want to have conversations could they please have them outside the Chamber? We are on questions to the Taoiseach.
Ceisteanna - Questions (Resumed)
Discussions with European Leaders
1Deputy Gerry Adams asked the Taoiseach the contacts that he has had with European leaders since the summer recess. [37878/12]
2Deputy Gerry Adams asked the Taoiseach the issues he will prioritise for the European Council meeting of 18 and 19 October. [37879/12]
3Deputy Gerry Adams asked the Taoiseach if he has been in contact with German Chancellor Angela Merkel since the Dáil went into recess. [37880/12]
4Deputy Micheál Martin asked the Taoiseach if he has met or spoken with Chancellor Merkel recently; and if he will make a statement on the matter. [38800/12]
5Deputy Micheál Martin asked the Taoiseach his plans to visit European capitals prior to Ireland’s presidency of the EU; and if he will make a statement on the matter. [38801/12]
6Deputy Joe Higgins asked the Taoiseach the European leaders with whom he has had discussions with since the summer recess. [38949/12]
7Deputy Joe Higgins asked the Taoiseach if he has submitted any proposals for the EU Summit taking place on the 18 to 19 October in Brussels; the issues he will prioritise; and if he has received an agenda. [38952/12]
8Deputy Micheál Martin asked the Taoiseach whether he has been contacted by Prime Minister Samaras to discuss developments in Greece; and if he will make a statement on the matter. [39017/12]
9Deputy Micheál Martin asked the Taoiseach if he has had any discussions recently with President Hollande; and if he will make a statement on the matter. [39027/12]
Richard Boyd BarrettQuestion:
10Deputy Richard Boyd Barrett asked the Taoiseach the EU leaders he intends to meet in the autumn and winter period; the issues he intends to raise; and if he will make a statement on the matter. [39031/12]
101Deputy Micheál Martin asked the Taoiseach if he has spoken to Prime Minister Monti recently regarding developments in Italy; and if he will make a statement on the matter. [36945/12]
102Deputy Micheál Martin asked the Taoiseach if there is any informal EU Council meeting planned over the next two months; and if he will make a statement on the matter. [36946/12]
I propose to take Questions Nos. 1 to 10, inclusive, and 101 and 102 together.
With regard to my recent contacts with other European Union leaders, I met the Slovenian Prime Minister, Janez Janša, in Government Buildings on Wednesday last. Our discussions focused on the euro crisis and the efforts under way to resolve it including proposals for progress towards banking union, the fiscal position in each of our countries and the challenges we face in reducing our budget deficit. We both welcomed the verdict of the Constitutional Court in Germany that morning, allowing the ESM, a vital part of the architecture for stability in Europe, to proceed. I also took the opportunity to brief the Prime Minister on our forthcoming Presidency.
In relation to my forthcoming plans for meetings with my European Council colleagues, I will meet Prime Minister Monti in Rome on Friday morning next, where our discussions will focus on developments in the eurozone; banking issues, including those related to Irish bank debt; the multiannual financial framework; and the priorities and themes for the Irish Presidency. Arrangements are being finalised for meetings with other leaders who will also be present.
On Wednesday, 3 October, I will travel to Brussels with a number of my Cabinet colleagues for a meeting with President José Manuel Barroso and the College of Commissioners. The meeting will be focused in particular on Ireland's Presidency. Later that afternoon I will meet European Council President, Herman van Rompuy. In addition to preparations for Ireland's EU Presidency, I will discuss with him the key issues that the European Council will address in the period ahead, especially his ongoing work on economic and monetary union, and prospects for agreement on the MFF.
I plan travel to Berlin in early November for a meeting with Chancellor Merkel. In addition, officials in my Department are making preparations for a visit to Paris to meet President Hollande. Prime Minister Samaras has not been in contact with me over the course of the summer recess but I will see him and all my other European Union colleagues at the next meeting of the European Council on 18-19 October.
While the agenda for the October meeting has not been finalised, I expect that discussions will focus in particular on President Van Rompuy's interim report on strengthening economic and monetary union. Ireland has a vital national interest in ensuring a strong and stable currency and I will be engaging positively with colleagues to secure that outcome.
There are no informal European Councils planned for the next two months. However, an additional European Council meeting has now been convened for 22-23 November. It is expected that this meeting will focus on the multiannual financial framework and the Union's budget for the period 2014 to 2020.
Táim buíoch as ucht an fhreagra. Perhaps the Taoiseach could help us in regard to media reports this morning. It is a habit that the Government thinks a lot through the media as opposed to the House. There are reports that the Government is considering issuing a 40-year bond to re-finance the bailout of Anglo Irish Bank. Has this been discussed with the European leaders with whom the Taoiseach has been in contact?
The Taoiseach stressed on a number of occasions the importance of the European Stability Mechanism, ESM, as part of the solution to the promissory note problem that Fianna Fáil left on the shoulders of Irish citizens. Has he encountered political opposition to the use of the ESM as a means of trying to deal with the bad-banking crisis? He may be aware that Chancellor Merkel was quoted as saying there is no change in respect of bank debt relief for Ireland. The quotation I have implies there is no change in her agenda at this time.
Earlier, the Taoiseach was saying he would be glad to hear Sinn Féin's constructive suggestions on health issues. I am very pleased to be able to say that what we have been arguing for from the outset, namely, the need to separate bank debt from sovereign debt, appears to have been taken on board by the Government. I welcome that. The Taoiseach says we are never constructive and that we never welcome what the Government does, but I welcome this initiative. It is a good approach but it is a pity it took the Government so long to get around to it.
A Government spokesperson said October is the deadline for working out an agreement. Can the Taoiseach confirm that this is still the deadline? Is progress achievable within the specified timeframe?
The Government has always put forward the view that the negotiations, which are quite tortuous and very complex, are about restructuring and re-engineering the scale of debt placed on the backs of the Irish people. That has been the thrust of Government activity in this matter. The Deputy is aware that the decision of 29 June, into which Ireland was written, was to break the link between sovereign debt and bank debt. Many people said this could never happen. One should bear in mind, however, the progress the country has made in difficult times, the recognition of the scale of the burden on the Irish taxpayer since the blanket guarantee was given and the recognition of assistance for Ireland.
The view put forward by Commissioner Rehn is that the process should be concluded by the end of October. Clearly, the ongoing discussions in respect of Spain's borrowings for its banks and to deal with its deficit problem are not discussions over which we in Ireland have control. The important point is that the conclusion must involve the right and best deal for Ireland's economy and people. I am more concerned about that than adhering to the deadline that was mentioned as a target by Commissioner Rehn. I pointed out some time ago that there would be some slippage from that.
The Deputy is aware that the Minister for Finance, Deputy Noonan, was in Paris, Rome and Berlin last week prior to the informal meeting in Cyprus and that good progress was reported in that regard.
I will not comment on headlines in the newspapers about different ways of dealing with this; suffice it to say that the focus of the discussions, which are tortuous and very complex, is on the restructuring and re-engineering of debt such that it can be lessened for the people, including the taxpayer. It is a case of getting the very best deal for the people and not just a question of adhering to an intended target date that may not result in the best deal that could eventually be on offer.
I have approximately five questions on this issue and the Taoiseach covered them all in his opening reply. Over recent months, there seem to have been very intense discussions taking place across Europe on actions to tackle the eurozone debt crisis. Prime Ministers have been crisscrossing the Continent holding meetings to promote their national positions and to seek agreement. It seems the Taoiseach is opting out of this role in regard to Ireland's national position on bank debt. It seems from his reply that he has not had any substantive meeting with any key player who matters regarding the bank crisis or bank debt issue and the separation of bank debt from sovereign debt since the June summit. It seems once again that the Government, particularly the Taoiseach, is sitting back and hoping something will fall into its lap such that we can claim a negotiating victory. We know this happened in June with Prime Ministers Monti and Rajoy forcing Chancellor Merkel's hand at the time. To a certain extent, we are beginning to hear her resiling from the June agreement or at least procrastinate with regard to the implementation of that agreement, which the Tánaiste described as a game changer.
The Taoiseach stated he does not want to comment on the headlines in the newspapers. With the greatest respect, they are his headlines. There has been spin. Ministers have been talking to the media and that is what is giving rise to the headlines. We need a little honesty about what is happening.
A restructuring of the promissory note is not actually a separation of sovereign debt and banking debt; rather, it is a cash-flow operation. It is beneficial if one pushes it out far enough but there is no actual separation. Ultimately, it falls on the sovereign to pay.
It changes the creditors.
Yes, but it is not in line with the principle as agreed in June. We do not seem to have any sense of movement in this regard.
Deputy Adams asked the Taoiseach about Chancellor Merkel's comment, as reported today, that she will not countenance any change for quite some time and her statement that Greece and Spain are her highest priority. I refer also to the comment that the banking union issue takes precedence over any discussion on the separation of sovereign debt from bank debt. The Taoiseach needs to comment on the headline this morning and to offer clarity to the House on the promissory note issue. He needs to refer to the utilisation of the ESM in respect of Allied Irish Banks, Bank of Ireland and Permanent TSB. It is time that the House and public heard a more honest debate about these issues. People are at sixes and sevens with all the different messages coming from the Government and the newspaper headlines. There is incoherence, kite flying and serial leaks. It is a case of every Minister for himself and of Ministers saying what is on their minds and what is happening in the latest chapter. It is disingenuous and not good enough for the Taoiseach to say he will not comment on a newspaper headline when it was authored by him or his colleagues. The Minister for Education and Skills, Deputy Quinn, should not be shaking his head because the position on the headlines is obvious. We were told last week we were making great progress; this week we are told something else and next week there will be something else. We need to respect this House and have a genuine debate here on the issues and what is occurring in the negotiations.
The open and honest debate is missing in Europe, France, Spain and Germany.
I accept that.
The Deputy's mantra is that I should be travelling to Europe to meet all the leaders on a daily basis. He states I do not meet any of the key players. He understands, however, that all the key players came together on 29 June. The decision was made in the preparations for that meeting and in the meeting itself. Ireland is written into that decision and is one of only two countries mentioned therein.
Thanks to the efforts of the Taoiseach.
The key players were around the table. Since the markets reacted positively to the 29 June agreement, a factor, I am sure, in the capacity of the NTMA to return to the treasury bill and bond markets in July and last week, and on which platform the Minister for Finance and his officials have sought to build, with a degree of success, I might say, there have been intensive discussions between the officials of the Department of Finance and their counterparts abroad. They have had meetings in Paris, Berlin, Helsinki, Rome and The Hague and have had lots of conversations about specific issues from here to there.
The discussions with the troika, especially with the ECB, on replacing the promissory note have been ongoing for over a year. We had some success in the settling of the 31 March 2012 payment under a long-term Government bond. The direct recapitalisation of Irish banks is clearly and directly linked to developments in Spain and is contingent on the establishment of a single European banking supervisor. The proposals for that, as Deputy Martin knows, were presented by the European Commission just last week.
Those intensive discussions between the officials and their counterparts were followed up last week by the Minister, Deputy Noonan. He has given his progress report on that, which was accepted generally as being satisfactory given that these are very complex issues. There were also statements and comments by the ECB, the IMF and the Commission on the progress this country has made in restoring order to the public finances, in restructuring the banking system and in delivering on more than 120 measures in the EU-IMF programme. This has been recognised as a real strength, although a challenge for us here, in our negotiations on the banking debt.
The question of dealing with the promissory note and the requirement to pay €3.1 billion each March is an issue that is central to these discussions. As the Minister, Deputy Noonan, pointed out on Saturday, there is strong political support for dealing with that problem in respect of Ireland. It is how one deals with it that is the question. It would obviously have beneficial implications for Ireland and our debt level if a way could be found to deal with it that was satisfactory.
I do not really deal in speculation about deadlines. I can echo for the Deputy the comments by the ECB on Friday last, namely, that negotiators are under heavy time pressure, as they called it. I would like to think that the end of October target date could be met but, frankly, I do not see that as a reality. As I told Deputy Adams, I am far more concerned with getting the maximum deal for the taxpayer and the country in the negotiations that are ongoing. As I said clearly, Spain is an issue there. What the Spanish negotiators are doing is obviously an issue that has a direct bearing on us here also.
May I ask a supplementary question?
I will revert to the Deputy.
When in her post-summer press conference the German Chancellor stated that no changes were necessary to the Irish bailout austerity agenda, which, in case we forget, sees working people and the poor salvaging the financial market speculators in Europe, and that everything - the cuts, the crisis and the hundreds of thousands of people who are unemployed - was fine with Ireland, what did she mean? During the general election campaign, the current Taoiseach rushed over to Berlin to be at Chancellor Merkel's side. He sought security, a profile and gravitas in her shadow. Is it not the truth that she has stabbed him in the back and that she has told the real truth about the real thinking of the European elite with regard to the Irish austerity bailout agenda, namely, that the Irish people will continue being forced to pay? Is it not the truth that the Taoiseach has tried to string along the Irish people with fairy tales about miracles emanating from Europe regarding the millstone of debt created by bankers and speculators that our people are forced to carry? How does the seismic shift of which the Taoiseach spoke in June with regard to debt now stand in view of Chancellor Merkel's statement to the effect that Ireland does not need changes, even as another €1 billion goes to the AIB bondholders on 1 October?
The Taoiseach must comment on the claim made by the media today to the effect that the Government is contemplating the stringing out of this massive burden of debt over 40 years, in particular to pay off the Anglo Irish Bank gamblers and others. Is this the truth? Is the Taoiseach prepared to condemn not only the children of this nation or their children, but also their children's children to carry this millstone of debt for which they bear no responsibility? Is it not true that the Taoiseach's claims about major changes that would alleviate the totally unjustified debt burden on the Irish people have been exposed as a sham, given the German Chancellor's statement?
No, it is not. The German Chancellor agreed with and was very supportive of the European Council decision on 29 June. The commitment by the Heads of State and Government on 29 June stated: "to examine the situation of the Irish financial sector with a view to enhancing the sustainability of the well-performing programme". As I said to Deputy Martin, the focus of the discussions that have been and are taking place here and the focus of the political interaction that has taken and will take place are on how best we can restructure and re-engineer the level of debt placed on the Irish taxpayer and get the maximum benefit and result from that in the interest of the country's people. Those discussions centre around how best that can be done.
I have read comments and seen speculation about what is under discussion. I do not deal in speculation, to be frank with Deputy Higgins. I much prefer to have clarity about results that are in our people's interests. It is true to say a range of issues and proposals have been and are being considered as to how best that level of debt should be re-engineered and restructured.
In so far as the Heads of Government are concerned, everyone signed off on that agreement. Many people thought that comment or statement by the Heads of Government could never be achieved. We now have to build on that. As I pointed out to other Deputies, meetings have taken place at an intensive level between Department of Finance officials and their counterparts in a range of European capitals. When I meet Prime Minister Monti, President Hollande and a number of other leaders this weekend - details of meetings are being finalised - this obviously will be a focus of our talks at Heads of Government level. What we are interested in, as I am sure Deputy Higgins is as well, is getting the best deal possible for our people. That has been and will be the continuing focus of our discussions and negotiations.
There is strong political support for implementing this decision of the Council. I would like to think it would be implemented as soon as possible in everybody's interest, but it is to get the best result for everybody.
What sort of formal proposals?
These are not fairy tales.
Last week, the Irish Fiscal Advisory Council, which was set up as part of the troika deal, warned that growth forecasts had been consistently off and overly optimistic and that unless growth targets were met - it is looking highly likely that they will not be met - our debt would become unsustainable. That is what the Fiscal Advisory Council, not the left or the Opposition, is indicating. It has warned that all the growth projections so far have been wrong, and all the dangers are on the down side.
Against that background is the question of us getting some relief on the debt, which is absolutely urgent as it will become unsustainable otherwise. Over the summer months the Taoiseach and the Minister for Finance have intimated there might be some progress on the debt issue but last week German Chancellor Angela Merkel put that to bed and said we would get nothing. She indicated there is no envisaged change and none is necessary. She set out her stall. The only idea those people seem to be concerned with is that we continue to impose austerity and even if there is a restructuring of the debt, it would be conditional on further austerity. We are either in the grips of the loan sharks in the troika and their demands for austerity or the requirements of the markets to impose austerity.
Is there any choice for the people in the country that would give relief from austerity? Is the Taoiseach pursuing any deal on the debt that will allow him to say, in the upcoming budget in December or the following budget, that people will endure less pain or austerity? Will the Taoiseach comment on the fact that, in its report, the Fiscal Advisory Council indicated that three quarters of the way through next year this country will not be spending more than it can afford, with the entire basis of the deficit being interest on debt? Is it an acceptable choice that in 2013, we are saying it is more important to pay bondholders and satisfy the loan sharks of the international markets while subjecting the people of this country, who simply cannot take any more, to further cuts and austerity?
Everybody agrees that the quicker this can be done, the better, but it is not as simple as the Deputy pretends. Other European leaders now recognise that the challenge facing us is being met by the Government and its people. The position is challenging and many people have suffered as a consequence. Nobody will walk in here and write a cheque for €13 billion to sort out the problem.
We have to write a cheque for bondholders.
This is a problem we must deal with ourselves. The discussions which are taking place are focused on bringing a conclusion to the decision of the Heads of Government, including Chancellor Merkel, on 29 June. I do not want this country to see any pretensions about a second bailout. We want out of this bailout as quickly as we can so we can fly economically and run our country as efficiently as I know is possible. The promissory note issue, which has been there a while, means there is a requirement to pay €3.1 billion every year for ten years. The Deputy did not cause that but we must deal with it. It is a central focus for many discussions and the Deputy should believe me when I say it is not as simple as he pretends when he says we should wipe it out or change it in a way to bring the best financial benefit for Ireland.
Commentators got it wrong about Ireland's growth rate and the extent of our economy. Growth figures depend on a range of issues, and it is very difficult to predict what they can be for an exporting nation when other countries in Europe have a range of difficulties. The Deputy is aware of other countries either in programmes or on the verge of them because of difficulties. That has an impact on our capacity for export, as many of these countries buy what we produce.
I understand the Fiscal Advisory Council put forward even tougher measures that would see us emerge from the bailout programme more quickly than the Government proposes. The single most important element of the Government's action in 2013, working with its people, is to produce a budget that will meet our targets and have a direct impact on the fact that we borrow at 5% above the German rate. As a consequence, this economy is capital-starved. Until we can deal with that yield, it will be difficult for banks to borrow on the markets and it is less attractive for investment to flow here. These are external and international factors on which we must work, and this does not in any way take away from the fact that there is a series of very difficult challenges to deal with at home.
I look forward to the Deputy's contributions on how this can be rectified, and I do not want any hallucinations on how he might think it would happen. There are some challenging times ahead and the Government will make its decisions collectively, in the fairest and most equitable way possible. We are three quarters of the way across this river and it behoves everybody in the country to focus on what we can do to pull on the rope and get us back to economic independence and sovereignty. That will help us move on to implement a programme where people can have confidence, strength will return to our economy and opportunities for jobs and careers will filter through. Such action is not always as easy as it sounds but it is the case that we must face up to that challenge with courage.
The Taoiseach is spinning more fairy tales.
In our international negotiations we will continue to focus on getting the best deal, with the maximum benefit for our people. Even if it takes a little longer than was originally targeted, I hope the process will be worth it on its conclusion.
The Taoiseach mentioned hallucinations in referring to other Deputies but it was his own party and the Labour Party that dramatically raised expectations before the last election. It was said that bondholders would be burned and such reckless comments were made during the election; the year and a half since has been a long journey but it is extraordinary for the Taoiseach to use a phrase such as "things are not as easy as they sound". We heard "Labour's way or Frankfurt's way" as a rallying clarion call some time ago. The Taoiseach has since accepted that Europe did not have the right policies at the outset of the crisis and the ECB did not deal with the issue as decisively and effectively as it could have. It imposed debts on Ireland through promissory notes that were unfair. We have a moral basis for renegotiating these as much as anything else.
Mr. Mario Draghi has been a very effective Governor of the European Central Bank and some of his action has had a dramatic impact on the markets. He has a more elastic interpretation of his remit and mandate, which has been positive and had the single greatest impact on market confidence in the eurozone's capacity to emerge from this crisis. We are not there yet. Will the Taoiseach facilitate debate on this in the House? In an earlier phase of this debate there was a famous technical paper going around that involved the Cabinet and representatives of the troika. That seems to have disappeared into the ether. Did that technical paper ever exist and could it be published or at least furnished to Members of the Houses so we can see what scenarios are being worked through with regard to debt sustainability?
There are a number of questions relating to the banking union. What is our position on it? With regard to the regulating and governing role of the ECB, are we in favour of a union that involves all banks or do we support the German position which wants to limit it to 20 major systemic banks or approximately 200 banks? What is the position of the Taoiseach and the Government on the banking union and the extent of the remit of the ECB in terms of regulating the banks?
Has Ireland prepared a position paper on the treaty changes which have been raised by other leaders? It was floated by Chancellor Angela Merkel. Will we again sit back and wait for new treaty papers to arrive and another treaty proposition will come before the people in the form of a referendum? The big debate in Europe has been on the German position, which wants countries to sort out their own fiscal situation first, then wants the regulatory situation sorted and was very reluctant, as we know, to go along with developing the role of the ECB as a lender of last resort or for buying bonds. The June summit represented a shift in this debate when Prime Ministers Mariano Rajoy and Mario Monti put it to the German Chancellor that something had to give. This issue has dragged on and now it seems we are getting a very slow play out of the June decision with the Germans stating they want the banking union first before they go down the route of separating sovereign debt from banking debt. The issue is dragging on again. This is why I believe the Taoiseach should be on the diplomatic circuit. He should meet other leaders. Will Mr. Rajoy submit to a programme and what is happening on this front? These issues are grave and I believe we have a strong enough moral position to argue for a genuine deal on it and it has the support of everybody in the House.
I heard one of Deputy Martin's Deputies state after the collective assertion of their position this week that they were off the leash.
We were in a modest location. There was no Carton House for us.
The repayment of €3.1 billion every year for ten years is what is at stake. It is true to state Mr. Draghi has had a very fresh approach towards the ECB and in how he views the European Union. Ms Lagarde has been very supportive of Ireland as has Commissioner Rehn, the German Minister for Finance, Mr. Schäuble, and Mr. Rasmussen. The focus is on putting all this goodwill and translating it into negotiations that would bring a result for us.
Deputy Martin asked about the banking union. We welcome progress towards a euro area banking union but everybody recognises that as we have 6,000 banks here it is a complex undertaking. However, I must state there is a realisation that work must proceed as quickly as possible. The new arrangements are supposed to be in place by 1 January next year.
What is the Taoiseach's position?
We welcome progress towards a European banking union. It is highly ambitious.
Does the Taoiseach support the Commission's view or the German view?
We will continue to make this an issue when we assume the Presidency and building shared supervision at EU level is a crucial step towards what was decided at the June European Council meeting. The Commission has also proposed a phased approach to the single supervisory mechanism to be in place by 1 January. We believe this should be considered urgently and, significantly, when it is established it will open the way for the ESM to be used to recapitalise banks directly.
Does the Taoiseach want all banks to be supervised?
Deputy Martin asked whether a paper was prepared on treaty changes. No paper will be prepared on treaty changes until these matters are finalised to see in what eventuality a treaty change might have to take place.
Is the Taoiseach in favour of the Commission's position that all banks be supervised by the ECB or of the German position?
What about the technical paper between the troika and the Government? Does the Taoiseach remember the famous technical paper?
The Taoiseach got approximately six months out of it on Leaders' Questions.
Yes, we have moved beyond it.
So it has disappeared.
We have moved well beyond it.
The Taoiseach is one of the best at spinning. He got half a year out of that technical paper which never existed.
Nobody can beat your good self.
Was it shredded?
I certainly cannot find anything on the other one.
With regard to the banking debt and the European Union, I recall a movie from a long time ago called "The Secret Life of Words". Do these words have some secret meaning that I miss? The Taoiseach quoted them. He obtained a commitment in June to examine the situation of the Irish financial sector with a view of further improving the sustainability of the wealth performing adjustment programme. That is it. Would the Taoiseach agree that calling it a seismic shift is investing in very simple words meanings that have no relation to the reality and that his credibility has been badly undermined by Chancellor Merkel? What have the European Union leaders been saying to him concretely as he and the Minister for Finance have been lobbying them in this regard?
Has the Taoiseach read the state of the union address by the President of the Commission, José Manuel Barroso? He called for a more liberalised Europe with more austerity and more flexibility, in order words workers must give more and more to meet the demands of the markets. Does the Taoiseach agree with this? Does the Taoiseach agree with President Barroso's call for more privatisation, which he has been driving for some time? Does the Taoiseach agree with his call for a Europe that is capable of deploying military missions, in other words a militarised union? Does the Taoiseach agree with him when he calls for a federation of Europe, in other words a mirror image of imperialist United States of America, a Europe which can wave a big stick or armaments over poor people throughout the world to get its way? Is this the Taoiseach's vision as well as that of the European elite? Will the Taoiseach explain how in any sense this could mean a better world for the 25 million or 27 million of our people throughout Europe who are unemployed at present and for those who are suffering under the disastrous travails of austerity and the dictatorship of the bond markets and speculators? Is the Taoiseach at one with Mr. Barroso on this?
In all of the comments Mr. Barroso has made in my listening to him at many meetings he has always been careful to distinguish between the role, responsibilities and policies of various countries. He has always singled out this country as a small country making headway in difficult times. His understanding of Ireland's position in so far as other countries are concerned with regard to membership of NATO and their views on the bigger issues of military connections throughout the world is very clear. With regard to these discussions, Deputy Higgins is aware that we receive emergency liquidity on an almost weekly basis and this cannot be translated into long-term finance. This is an issue for serious consideration by the Minister for Finance and his officials and others. What happened as referred to was a seismic shift because very few people who think they know all these things will have contemplated that the Heads of Government at European Council level would make a decision to break the link between sovereign and bank debt. All of those who comment on these things never foresaw that this country would be written into the decision. The reason for that was, in part, because of the decision made by the Irish people, which the Deputy opposed, in respect of the fiscal stability treaty that strengthened the hand of our country and our negotiators in building trust with our colleagues and in having the support, which I outlined to Deputy Martin, of so many influential leaders and so many persons involved in positions of influence to deal with our particular problem. Our problem, of course, is that when the decision was made a number of years ago, we were burdened, unprecedentedly for a country in Europe, with a savage imposition and it is that problem which we need to deal with and why it is in the decision of 29 June. That is why it was a seismic shift for European countries and why the requirement of Italy to roll over billions every month and why the issues being debated and considered in respect of Spain and its enormous economy have a direct impact on Ireland.
Let me repeat that the thrust of the questions asked was, what are we doing about it? Our intention is focused on getting the best and maximum deal for our people and our country and while I would like to think it might be able to be adhered to by the end of October, frankly, I do not think that will be kept. My priority is to get the very best deal for our people, which I am sure Deputy Higgins will welcome when it is concluded.
From that point of view, these discussions will continue this weekend when I meet with a number of leaders, as I outlined to other Deputies, and apace with the officials from the Department of Finance and their counterparts in quite a number of countries. The goodwill and the support is there politically. It is there from the influencers in the Commission and the European Central Bank. Translating that goodwill into reality for our people is our focus and that is where we will continue to keep our priority.
I do not know if Dr. Angela Merkel and EU leaders are making a fool of the Taoiseach or he is making a fool of the people of this country.
Someone is leading the people of this country on a merry dance where we are told there are negotiations and discussions that may lead to something and there are hopes of relief, but nothing materialises. Meanwhile the hammer of austerity falls again. People in this country are quaking in their shoes at the prospect of what may be done to them in the budget in December. The Taoiseach should not underestimate the fear and anxiety out there. He must know it. In the face of that, Dr. Angela Merkel said we are getting nothing. Are these negotiations, which the Taoiseach said he is pursuing, going to bring any relief to the public who are terrified about further austerity?
Does the Taoiseach think it is acceptable, given that Europe and Dr. Merkel are giving us nothing and that we are getting diddly-squat from Europe in terms of debt relief, that we are still going to allow €1 billion to be paid out to unsecured Allied Irish Banks bondholders on 1 October? Does he think our negotiating strategy is working? Does he not think it is time to get tough and say that if they do not give us something that will give relief to the people of this country who have suffered enough, we are not going to pay off these unsecured and unguaranteed bondholders on 1 October?
The Deputy misses the point completely. I do not know where he was all summer. He should understand that we do not hold the cheque book here. We are in a bailout programme.
Unsecured and unguaranteed bondholders-----
The Cabinet cannot just make decisions for developments here and there because we are getting emergency liquidity assistance. The Deputy does not seem to realise that is the case and that our country is in a bailout position. As a republic, we do not have our economic independence. Our ambition is to get that back as quickly as possible. The European Central Bank, which supplies this country with money, has said we will not burn the senior bondholders and most of that money has been paid off. However, there is a recognition from the ECB, the Commission and the IMF that Ireland shouldered an enormous burden in the way this was done a number of years ago. Our job is to try to restructure and re-engineer that with benefits for everybody but it is not a simple as the Deputy pretends, that one can just bang the table and it happens.
When one sits around with 26 other leaders, or 16 as in the case of the eurozone, they all have their problems. Some of them are in bailout programmes too but, unfortunately, we were first out in this way so it is a case of continuing to negotiate very hard in the interests of the people and relieving and restructuring that level of debt that is on our people.
The Deputy says we are not getting anything. We do not control this because we are not economically independent but through our Minister for Finance and our Minister for Public Expenditure and Reform we renegotiated very substantial elements of the troika programme, not least of which was being able to say that when the Government decides to dispose of State assets for best result, that money can be invested in job creation and sustainable programmes for our people. That was not the case previously when it was all to go to debt reduction. There have been a whole series of those renegotiations.
The Deputy should not disregard the goodwill of other governments and other leaders which has been brought about by a sense of their understanding that Ireland, in a difficult position, has made serious progress. We want to continue that progress. As I said, we are three quarters of the way across the river. We have drawn down more than three quarters of the moneys to be allocated under that programme. The way ahead is challenging but the prize is enormous for our people and our country. That is why in the course of the discussions between now and the next ten weeks, I will be interested to hear what the Deputy has to say about what can be done realistically and not his airy-fairy economics that suddenly one can go home and say this is all sorted out.
It is the Taoiseach who is airy-fairy.
My question will follow a few observations that are extremely important. I sense the tension from our leader on the Government side and from the Opposition side. I sense a tension that is playing itself out in the other parliaments of Europe and I sense that over the past number of years Europe has been ruled by powerful vested interests and - I will use a word we all understand - bullies, but no one of stature and courage has stood up to challenge this undemocratic power.
I will pass around to Members a link to a website in which MIT Professor Johnston revealed that one of the world's largest banks, Deutsche Bank, with a €2.2 trillion balance sheet, is far shakier than realised to date. What these people who run these banks around the world, and who are paid multiple times what the leaders of countries and parliaments are paid, are doing to control and manipulate the flows of finance and capital around the markets of the world, which is frightening the leaders of democratically elected governments, is wrong and we have to stand up to it.
I hope the Deputy has a question at the end of this.
This is important. If we keep doing what we have been doing, we will get more of what we have got. What we have got to date has been very disappointing despite really honest efforts, but we have not had the truth from other parliaments. We have not had the truth from the German Parliament. In Germany they have not been told about the reality of the economic and financial standing of their country and their banks, and the debt that exists. Spain's banks have admitted they have a problem worth €100 billion but it is a minimum of five times that magnitude.
I ask the Deputy to frame a question.
He is doing well.
I ask everybody in this House to pay attention to these matters and to inform themselves rather than get distracted by the traditional accusation and counter accusation. We have to bring the truth of the problem to Germany. I will explain this matter of re-engineering more than 40 years of promissory notes very quickly and then I will sit down. The 40 year proposal for a bond means that, instead of a promissory note over ten years, the people of Ireland say they will take on a debt they do not owe to anybody. Fundamentally there is a problem in this. Why should we re-engineer and lengthen a debt that is not properly presentable to the people of Ireland? It is wrong. A 40 year bond at a lower interest rate will become an asset of a busted bank, the IBRC, and will earn income at the lower rate over 40 years while being used as security on a loan from the ECB. The loan from the ECB will repay the emergency liquidity assistance from the Central Bank of Ireland. It is all a nonsense of mirrors. We have to stop this nonsense and say we do not owe at least €70 billion to the ECB or the Central Bank because the origin of that money was the redemption of bonds that should not and could not be repaid from the resources of the banks in which they were invested. We have taken not one hit but €70 billion for Europe and that is wrong. We have to get that fundamental message across.
I thank Deputy Mathews for his intervention. The point he made about massive flows of money is true in the sense that this was raised at European Council meetings before the ESM was set up and was raised in respect of the manipulation of money around the world. Clearly, with the presidential election coming in the United States, issues arise about fiscal cliffs, as they are seen there, and Mr. Bernanke has made his decisions.
Our yields have fallen since the announcement from the ECB. Indeed, the secondary market for Government bonds has fallen to 5.2% for the ten year benchmark and the yield on treasury bills, at 0.7% on Thursday, 13 September, is 1.1% lower than in July.
The answer I have given to a number of Deputies is that our officials from the Department of Finance are focused in the discussions on getting the best deal for our people and our country arising from the decision of 29 June, which was accepted by all the heads of Government. It is in that context that our discussions and negotiations will continue to take place.
That concludes Taoiseach's questions.
May I ask a brief question?
I welcome what Deputy Mathews said.
I support the Taoiseach 100%.
He made a point about honest engagement and debate. The bottom line is that there is no transparency in what is happening. He referred to the 40 year bond. That was a headline in a newspaper today. We asked a basic question about it and the Taoiseach told us he does not speculate on headlines. He would not answer one single question about whether it is true, false or indifferent. That is the problem in this House. I asked a question about the troika paper. We were told for six to nine months that a technical paper was being prepared between the troika and the Government.
The problems are bigger in Spain and Germany.
I know all that.
Europe is in a mess.
That is the point we have been making for the last 12 months. I give some credit to Mario Draghi, in contrast with his predecessor.
He is a former banker, a Goldman Sachs guy.
The troika paper has disappeared into thin air. Apparently it does not exist. It was meant to set out various scenarios. Everyone in this House-----
We are all on the same side.
-----would be supportive in terms of debt sustainability but the position of not answering any questions in the House, not sharing information with the House-----
Deputy Martin would know all about the answers. Was he not there to meet the troika?
-----is not helping an honest debate in this country or across the eurozone in general. That is the basic point I have been trying to make.
The debate here is honest. In Germany it is not.
Our intention is to re-engineer and restructure the level of debt on our people. It is a pity that Deputy Martin was not as forthright and strong when he went off to make the decision in the first place, which left us with the €3.1 billion for ten years.
He is back at it again.
He is not off the leash on that.
We are out of time.
The Taoiseach accepted on the record that Europe made a mistake.
He will not be.
The Taoiseach is back to adversarial and partisan politics.
I call Deputy Adams.
We may have stumbled on a way of having better discussions and informed debates in this House. Deputy Mathews answered my question about the 40 year bond in a clear and concise way. The Taoiseach just ignored my question. I wanted to move on to very important questions about the North. I have been sitting here for nearly 45 minutes listening to a rerun. I suggest to the Taoiseach, with respect, that perhaps in these questions he should allow Deputy Mathews to come forward. The Deputy would answer them in a more concise and clear way.
Forget the point scoring.
We have a lot of questions for Deputy Adams.