People before Profit and the United Left Alliance will not be supporting this Greek loan facility, as they opposed the previous ones. This so-called new bailout arrangement for Greece is parading itself as a helping hand for the people of Greece when, in reality, it is a further death grip on the Greek economy and its citizens.
It is poison parading as medicine. It requires further locking the people of Greece, who have already been battered with cuts and austerity that have devastated their economy over the past four or five years, into several decades of brutal cuts and austerity.
The terms of this loan facility and what is happening in Greece are very relevant to this country. The deal being done for Greece will be similar in many respects to the deal that the Government is now seeking from European leaders and trying to spin as some positive development that will alleviate the burden of austerity and recession on the backs of the Irish people. In reality it will do nothing of the sort. There is a key point for people to understand when they hear the merry-go-round of spin that has been evident over recent days about the debt deal the Government is trumpeting as being almost achieved for Ireland. The reality of any such deal is that its terms will be even worse than those in so-called deals done for Greece that have utterly devastated the Greek economy and society. These terms are, crucially, strictly conditional on an even more rigorous imposition of cuts, austerity and privatisation of State assets and natural resources in order to secure the so-called debt deal.
The evidence is absolutely clear when we consider the Greek economy. That country is now on its third so-called deal, with each one making the Greek position successively worse. This action has deepened the crisis, increased levels of unemployment and poverty and is creating a staggering increase in the levels of homelessness, suicide and despair in the Greek people. The more austerity is imposed while dressed up as economic reform, the bigger the financial hole gets for Greece and the more economic growth is crippled. It also leads to higher unemployment. This necessitates a requirement to borrow more money to fill that hole, locking the country even further into the death grip of debt and austerity.
At what point will the Government and the leaders of Europe realise that this is just not working and is making the problem worse? The last thing we need is a deal on debt that looks anything remotely like this, although the Government is pursuing it and presenting it as some great hope for the country. The telling characteristic of all the statements made by the Minister for Finance, Deputy Noonan, indicating how he was close to a deal that would give us relief, was the fact that every cent that had been borrowed would be repaid. The condition of any so-called deal is that this State will take full responsibility for the financial crisis, repaying to bondholders, financiers and the European Central Bank every red cent. A profit will be made on those loans, and it will come from the misery imposed on the Irish people, just as it has been forced on the Greek people to pay for a recession caused by others. Ironically, it was caused precisely by those who will profit from these deals.
I heard the Taoiseach speaking earlier about the restoration of confidence, both in the Irish economy and the financial markets in Europe. Of course there is more confidence, as this Government and those in Europe have made it absolutely clear that they are willing to force 100% of the cost of the recession on ordinary people, including youths, pensioners, the unemployed, young workers and all the vulnerable sectors of society. This signal is being sent out and it is no wonder stock markets are surging or the money available in the world economy is being poured into bonds. This Government and European leaders have been implying that if people invest in bonds, they will get every cent back as the cost of the recession will be imposed on the people. No matter what happens, the people will pay the price and bondholders will make a profit. It is no wonder these people are delighted and confidence is being restored. There is an inverse correlation between the surging of confidence in the bond and stock markets and the despair, demoralisation and depression that is being seen in ordinary citizens, workers, the unemployed and pensioners.
When the Taoiseach is pressed on the issue, he is forced to acknowledge that people are having a hard time and we are enduring some pain, although he argues that it will be worth it in the end if we restore the confidence of the markets because the people behind the markets - who caused the crisis - will come charging in on a white horse with investment and jobs. He claims that if we get down enough on our knees, beggar ourselves sufficiently and agree to work for nothing, at some point the capital markets will come pouring in with large-scale investment and jobs. This is an illusion or, more accurately, a delusion, as all the evidence suggests quite the opposite.
The Minister for Finance is trotting off to Davos for the World Economic Forum and he might have a word with the chief executives of some of the big multinational companies. There are reports in today's newspapers of a survey of those chief executives and investors which shows that their confidence is plummeting and they will invest less this year than they did last year. They will lay off more people rather than employing more staff. These investors are not confident because of the so-called reform agenda that is being imposed and because austerity is savaging the incomes of ordinary people, producing chronic mass unemployment, so they know there is no point investing in a depressed market. There would be nobody to buy goods. These investors are rational in that sense as their business is the making of profits.
Those with capital believe it is too risky to invest in jobs, enterprise and industry so they are putting their money where they know they can get a profit. They know they can get such a profit in government bonds and they are using their money to that end.
They are using their money to speculate and gamble on government bonds because the Irish Government and other European governments informed them that if they invest in government bonds, they will get back every cent and make a profit to boot.
Rather than engaging in productive investment that would return people to work, this policy is leading to another speculative bubble in government bonds. This comes against a background in which the Chinese economy is beginning to slow down, the European economy is in recession, the US recovery has petered out and confidence in Africa, a region that is frequently heralded as showing signs of growth, is fading. The impact of austerity measures is depressing the economy and leading to a crisis in confidence that has reduced the willingness of those with money to engage in productive investment which would return people to work and generate economic growth.
When we make these points, the Government argues that there is no alternative to the current difficult approach because our enormous deficit leaves it with no choice. It is important to nail the lie that Ireland and Greece are spending too much. The vast majority of the money provided in the euro loan facility to Greece is to be allocated, yet again, to recapitalising the country's banks. Similarly, the vast bulk of the money Ireland is borrowing is to be used to repay debts, most of which were incurred as a result of the requirement to recapitalise Irish banks. Most of the money we are borrowing is not being used to fund public services or make the economy function but will be allocated for the repayment, with interest, of money Ireland borrowed to prop Irish banks and the European private financial system.
Greece is close to achieving a primary balance, with only a small gap remaining between expenditure and revenue. The vast bulk of the country's deficit is the result of debt repayment. By forcing the country into a straitjacket of debt, control over the Greek economy passes to the European Central Bank and the bondholders and financiers it represents. They are given the power to demand that Greece sell off its natural resources and State assets, precisely the resources that could serve as vehicles for investment to create jobs and growth.
One of the startling features of the Greek loan facility is the sentence on the title page that the Greek Central Bank will act in the public interest, "subject to the instructions of and with the benefit and guarantee of the Federal Republic of Germany". Germany is singled out in the document which also specifies that it will dictate the process. The real story here is that the German financial system, the European Central Bank and others are acting in the interests of large financiers by putting Greece into a vice grip of debt which requires the imposition of ever more austerity and, crucially, the sale of resources and assets which the speculators and financiers who caused the crisis will then take from the Greek people to make even greater profits. Precisely the same process is under way in this country. While the Government forlornly waits for the private markets to arrive on a white charger with money to invest, the assets and resources we could invest to create jobs and growth are being taken from us. If we were to invest in forestry, gas, oil and the State companies, we could generate wealth, a degree of self-sufficiency and tens of thousands of jobs. It is criminal that these resources are being given away. We are locking ourselves into a scenario in which any deal we secure will be conditional on further monitoring and policing by the European Central Bank and Germany, both of which will act as agents of the international markets and will be able to dictate policies, budgets, economic priorities and their so-called reform agenda, which amounts to nothing more than the slashing of our public services to make way for private multinational interests to move into the relevant markets and make yet another killing. I do not understand how the Government believes this policy could possibly benefit Irish people.
The Government's own projections for employment do not offer anything. According to the Department of Finance, the net level of employment growth in 2013 will be 0%. Why does the Government not honestly state that there will be no net increase in jobs by the end of the year? If its best projections come to fruition, and there are many who seriously doubt they will, the vista of hope the Government holds out is that unemployment may decrease by 1.5% in 2015. In other words, even in the best case scenario, we will still be left with chronic mass unemployment at the end of 2015 and 400,000 people will be without work. Is this what we have to look forward to? In what sense does the Government's best case scenario offer reasons for hope or optimism?
The much more likely scenario is that as the impact of the cuts and austerity that have crippled the Irish and Greek economies will be generalised across the rest of Europe, the European economy will contract further and the market for our exports, the only area on which the Government is relying to generate jobs, will be further choked off. The alternative to this hopeless policy that offers nothing in the short to medium term and, I suspect, the long term, is to invest ourselves. With the private markets continuing with the gambling and speculation that got us into the current mess, let us invest in the young, educated people who are flooding out of the country. The Government constantly claims we do not have sufficient resources for investment. This year, the banks we recapitalised will pay out to senior bondholders €17 billion, a sum that would finance several stimulus programmes. Was is not the point of the bank recapitalisation programme that the banks would reinvest this capital in enterprise to create employment? They have not done so and have instead used this money to pay senior bondholders.
Since they know that there is a large mortgage crisis, they are afraid to lend money into the economy. If they were not paying that €17 billion to senior bondholders, it would be available to invest in our young people, vital infrastructure, State enterprises, the development of our natural resources, including the agrifood, renewable energy and forestry sectors, and support for small and medium-sized enterprises, SMEs. Instead, we have signed up to a plan under which all of the funds that we desperately need are being siphoned out of the country and into the pockets of speculators on the financial and stock markets. It is insanity and makes no sense.
At what point will the Government acknowledge that this approach is not working? Is it not time that the Government turned upside-down its way of viewing this matter? We know what keeps the markets happy, namely, making large profits. The stock markets are surging and bond yields are decreasing because we are keeping them happy, but this does nothing for the real economy. Why do we not start the other way around? The key issues would be jobs, our young people and the education system, which generates real wealth. The creative activity of human beings generates wealth. It is not created by people sitting behind screens speculating on currencies, stock markets and bond yields. Instead of generating anything, they are pushing buttons, moving paper money around and sucking money out of the real economy. Why does the Government not start the other way around and prioritise investment in the human beings who have the education, skills and abilities to generate wealth, in the infrastructure that would allow them to do so and in funds to develop our natural resources, State enterprises and so on?
How much time have I remaining?