Promissory Notes: Motion (Resumed) [Private Members]

The following motion was moved by Deputy Shane Ross on Tuesday, 5 February 2013:
"That Dáil Éireann:
in view of the imminent danger of Ireland's humiliation in the negotiations with the European Central Bank over the Anglo Irish Bank promissory notes, calls on the Government to:
— make a public declaration that Ireland is unwilling to, and will not, pay the €3.1 billion payment due on 31 March;
— assert that the debt is not the moral obligation of the Irish people; and
— demand from the European Central Bank that a prerequisite to a settlement of the promissory note issue will require a negotiated write-down of the debt embracing fair sharing of the burden across the eurozone.”
Debate resumed on amendment No. 1:
To delete all words after “Dáil Éireann” and substitute the following:
"recognises the importance of completing an agreement on the issue of the promissory notes before the next scheduled payment on 31 March 2013;
recognises that the current negotiation approach is the best course of action in order to achieve agreement with our European partners; and
notes that the Government will continue in its negotiations with the European Central Bank to achieve the best possible outcome for the Irish taxpayer."
-(Minister of State at the Department of Finance)

I thank the Technical Group for tabling this important motion. Any pressure on the Government and the agencies to move on this €3 billion is welcome, but I am not optimistic about what kind of deal we will get. Last month Government Deputies had to grin and bear it as they voted through one of the most regressive budgets in recent years. More than €3 billion in cuts were voted through. Child benefit was affected and there was tax on all income through PRSI as well as cuts in allowances for carers and so on. It was a very regressive budget that can only dampen the domestic economy.

By the end of the year we will have suffered €31 billion in cuts and tax hikes over the past five years. We are now being asked to throw away €3 billion more. There are no grounds for paying the €3 billion promissory note this year. It cannot be justified especially while working people and children suffer. While I am not optimistic, I hope at least this debate will shed more light on where we stand with the ECB and the debt on the promissory note in particular. I hope there is some news on that, but it seems we are not allowed to raise questions about how it is being negotiated and if we do we are labelled as being negative and somehow against it, but nothing could be further from the truth. The Minister knows that, but is simply using it as a means of deflecting questions from us.

Last year we had a stunt of pushing the promissory note off until this year. We had a big announcement, much back slapping and then it turned out that we would pay the full amount anyway. The public have grown tired of that type of spin and want to see progress. We have had two years and very little to show for it. The refusal to engage with the Dáil on this issue shows contempt for those of us on this side of the House. We continue to pay diligently the costs of this failure of capitalism even if the payments are pushed down the road. We will pay up for whatever time period without a whimper - that is what we are supposed to do.

People who believed the Labour Party would challenge Frankfurt have been let down in a very obvious way. However, there is still time for those on the Government benches to stand up and put the people first. Our position on this has been very clear. We have been completely consistent in our policy. We do not believe Ireland should pay the promissory note. We have been completely consistent in our policy on this. It is not the people's debt and should not be turned into a sovereign debt and socialised. It should not be paid by us. We as a people have shouldered more than any other people in Europe the cost of the banking collapses. It is time that some solidarity was shown. It is time the welfare of our people was put before protecting a flawed system.

This should not mean cobbling together a deal that would not satisfy anyone. Simply extending an unfair debt over a longer period does not make the debt any fairer. This evening's leaked news that IBRC may be liquidated with the assets going to NAMA, the debts sent to a bridging bank or the Central Bank - which will mean Joe and Mary Taxpayer picking it up - and creating a bond to push it down the road by between 25 and 40 years would simply be extending it. That is like my mortgage being changed from ten years to 30 years - I will still pay. The other problem is that it is further confirmation that it is still a sovereign debt. Will we wind up paying more in the longer term when the interest is added to the capital? Pushing it down the road or sideways means we - or our children - still have to face it. The big scandal of all of this is that we are lumbering our children with the huge burdens of the excesses and craziness of the previous Government which had no regulation of the banks or financial institutions. It seemed as if Anglo Irish Bank wrote the financial policy of the previous Government - shame on the then Government for that.

We need to take a stand on this and ensure we get it right. Time is running out. People have an expectation that should be met. The debts should be reduced. People have a greater level of knowledge now than ever before of the importance of these promissory notes and what they mean in terms of cuts to public services, lack of money for investment and extra taxes. There is no mood in the public for a half-baked deal. Any progress to improve the debt sustainability and more importantly to lift some of the burden of austerity from low and middle-income earners, who have borne the bulk of it, must be genuine and must be real.

After two years the best proposal put forward by the Government presented by the Governor of the Central Bank, Professor Honohan, was roundly rejected by the ECB. The Minister has said the negotiations are where he would expect them to be. This evening they could have moved on and we need to know what that is about. If all we are going to get is a prolonging of the agony and more interest and it is still ending up on the backs of the public as a sovereign debt, the Government's ambitions are even more minimal than I thought.

We fully support the motion. The promissory note and the €30 billion bill that comes with it is the Fianna Fáil legacy to the Irish people and yet it is being kept alive to date by Fine Gael and Labour. When people voted out Fianna Fáil, the Anglo Irish Bank mess was a big issue that we all heard on the doorsteps. There was an expectation that there would be change and progress, but to date we have not seen any change. What we have seen is Frankfurt's way and Fianna Fáil's way, but we have not seen Labour's way yet. We would welcome anything that genuinely reduces the debt burden and makes it more sustainable and lifts the burden off working people.

Last week the troika indicated any deal extending the maturities would be considered as a windfall for Ireland and that we would be expected to use this to pay off the wider debts. In other words any so-called deal does not necessarily mean one cent less in cuts or new taxes. This is the yardstick by which our party will measure any deal the Government might announce. We want to be able to count how much is available to invest in new jobs through a stimulus. We want to be able to judge how many of our sons and daughters we will be able to welcome back from Australia and Canada to work here. Those are the calculations. Simply playing a game with this debt and moving it around and pushing it off into some other institution or turning it into a bond and crystallising it as a sovereign debt even further will not satisfy people. We, and our children, will still have to face it down the line in ten, 20 or 30 years' time.

I appeal to the Government to deal with this in an honest way and take this burden, which is not ours, off us. We are really concerned about it. We, on this side of the House, are accused of everything, but we really are concerned about this. Like Deputies on the Government benches we are meeting ordinary people who are absolutely tormented with their debts and tormented with financial hardship for the past four or five years because of the mess created by previous governments. We need to change this. We need to put down a marker on this and we need real and sustainable changes.

I call Deputy Mathews, who is sharing time with Deputies Twomey, Kevin Humphreys, Donohoe, O'Donnell, Mitchell O'Connor, English, Spring, O'Reilly and Fitzpatrick. Is that agreed? Agreed.

How many minutes is that?

A softly boiled egg.

There are ten speakers with three minutes each.

Was the Minister, Deputy Noonan, anywhere in that list?

It is absurd. I have spent four years on this subject.

Deputy Peter Mathews is going to tell us the news about the-----

Does anybody recall the photograph in the Irish Independent on 10 October 2009? It was a picture of Professor Patrick Honohan, President Barroso and Joaquin Almunia, the wise men who said that the Irish people needed to make up their minds quickly and called on the Irish Government to move fast to have the NAMA legislation enacted. That was done around 7 November.

The next landmark day was in March 2010, following the first PCAR, when we were told Allied Irish Banks needed €7.9 billion and Bank of Ireland needed €3.5 billion. It was admitted on 30 September 2010 that losses in Anglo Irish Bank amounted to €22 billion and that the total loss of the banking system was €50 billion. The 30th of September is significant because it was on that day the surreptitious payment of €7.9 billion by the then Anglo Irish Bank was made to senior unsecured bondholders, the guarantee on those bonds ran out and my telephone calls in this regard to the Central Bank, Financial Regulator and Anglo Irish Bank went unanswered.

The European Central Bank can move fast when the interests of the euro system and others is at stake but moves slowly when it comes to addressing the promissory note, which was a wrong move for the Irish people. The promissory note was created for the first time ever in the euro-system to validate and regulate the advances of a greater amount of exceptional liquidity assistance. The rumours tonight are that the ELA will move back to the Central Bank of Ireland and that a long term bond will be created. However, there will be no debt write-down. The ELA created in IBRC was to allow for the redemption in full, without any losses, of senior unsecured bondholders. The system was maintained by the establishment right up to 29 November 2010 when the troika came to Ireland concerned only with the €135 billion to €140 billion of exposure of the ECB to the Irish banks.

It is wrong that there will be no write-down of the ELA, which is secured by the promissory note. It is absurd that I do not have the time to explain this properly, as I have done on several other occasions. People have chosen not to inform themselves on this issue. It is wrong that the ECB can move as fast or as slowly as it likes to protect the system. The people of Ireland have been at the receiving end of this. I heard it mentioned last night that although we have no moral obligation to pay this debate, we have a legal obligation to do so. We do not have a legal obligation to pay it and I will explain why.

Guarantees require uberrima fides, which is a policy of insurance and indemnity. There was no uberrima fides at the time because the assets of the then Anglo Irish Bank and the other banks were grossly overstated. I note KPMG is advising on this particular move. KPMG was the auditor of Irish Nationwide Building Society, which had losses of €6 billion on a balance sheet of only €10 million or €11 million.

The previous Government on behalf of the sovereign State of Ireland signed contracts which bind us to the promissory notes. Those who are prepared to support the Technical Group in a vote on this motion should be prepared to tell the people of Ireland the consequences for them of defaulting on the €3.1 billion payment.

There will be no consequences.

Deputy Twomey was not in the House during debate on the motion last night.

There will be consequences. Many Members opposite are either deliberating misleading the people of this country-----

That is not true.

-----or are financially ignorant of what is happening in saying-----

That information is coming from that side of the House.

Acting Chairman (Deputy Sean Kenny)

Order, please.

-----that we can default on this repayment and walk away.

Defer, not default.

That is nonsense. It will be interesting to know the Members of this House who would like to see Ireland default-----

-----leaving us unable to meet social welfare payments or nurses' and teachers' pay.

That is nonsense.

Deputy Mattie McGrath was previously a member of Government at which time he made decisions on behalf of the people of Ireland, about which they were not too happy.

Yes. I made mistakes.

If we go the road suggested by Deputies opposite we will end up like Argentina in the early 1990s.


There is a huge amount of foreign direct investment in Ireland and we are moving as a country to being a massive exporter. Do Members opposite believe that having just recovered our reputation, which was on the ground only a short while ago, this Government is going to risk ruining it again? Some of the arguments being made by Members opposite are morally and politically irresponsible. This is nothing but cheap political gimmickry.

Spare us the lecture.

The Technical Group is trying to gain some notoriety by way of this nonsensical motion. I do not believe that Deputy Mattie McGrath, who is also a business person, actually believes his own nonsense.

I do not believe that other Members of the Opposition, who claim to have a better understanding of economics than I do, believe some of the nonsense spoken in this House. We know what will happen if we default. It would not be pleasant for the most vulnerable people in our society, whom some Members opposite claim to support.

We have heard all of this before.

This Government has done a great job during the past couple of years in restoring our international reputation and stabilising our economy. It will soldier on for the next couple years despite that what it must do is difficult and will be tough on the people of Ireland. We will do what is right for this country in the next couple of years and will not engage in cheap political gimmicks. I do not for one moment believe that Members opposite believe any of what they have been saying.

We are in the middle of a fast-moving offence this evening with respect to the promissory notes and the ECB. As we await confirmation of the facts in this regard, I take this opportunity speak about an element of our national debt which I believe has not been part of the public debate but should be considered in any deal with the ECB and EU, resulting in fair treatment for Ireland.

In 2010-11, the European Central Bank purchased almost €20 billion of Irish sovereign bonds on the secondary market through the security market programme. At that time, these bonds were trading at well below par. When Ireland redeems and pays out on these bonds the ECB will make a substantial profit. This profit will be shared proportionally among the eurozone nations and Central Banks, according to the ECB capital base, GDP and population. We should seek the return of this profit, which I estimate will be between €3 billion and €5 billion. If the profits amount to €3 billion, Germany will get the greatest share of 19% or €600 million, France will get 14% or €420 million and Ireland will get just over 1% or €30 million. Greece has been given a deal worth more than €7 billion. We should seek a similar deal. There is no reason we should not be treated the same as Greece on this aspect of its debt deal. This is not about asking for a write-down or interest holiday, it is about being given some of the profits on Irish debts, of which each European country will receive a share unless we are treated the same as Greece.

On the motion before the House, it is important to note that the proposers completely ignore the consequences that Ireland will be faced with should it go down the path advocated by them. Interest rates could be increased and the European Central Bank could refuse to lend to Irish banks or to accept Irish assets by altering the risk control framework. This Government does not have the luxury afforded to the Technical Group of grandstanding on issues like this. If Ireland were to default they would be complaining about the consequences of doing so.

The timing of the Opposition on this matter could not have been worse. Instead of getting mud in their faces they will be hit with whole pies.

There is no doubt about it.

We hope so. There must be good news.

Deputy Mattie McGrath would not wish for good news if it meant the salvation of the country and that is the reality.

Go and look in the mirror.

For every step we have made to recover the sovereignty of the country, and I stand here as a member of a party which opposed the bank guarantee which ultimately led to the position the country is in now-----

Labour's way or Frankfurt's way.

Deputy Spring supported it for the past two years.

The Deputies voted for it and went in behind Bertie Ahern, as the boy band always did, and sang along with the chorus.

Deputy Spring supported it for the past two years. He should look at his own Dáil record.

I for one would say there is nothing popular about being in government at present but there is prudence in government.

We are doing the right thing by the people to regain the sovereignty of the country. Default is a word many people do not understand. It might mean the system one puts one's phone to should one not be able to answer it. I made my maiden speech on the day we went into government. People spoke lightly about the idea we could just do away with money borrowed by Irish banks and Irish people spent-----

Speculators and unsecured bondholders.

Contractors made money out of it.

Unsecured bondholders.

Individuals in business and people throughout the country-----

What about the barristers?

-----benefited at some level. However this money cannot be done away with, eradicated or defaulted on. I would like to bring to the attention of those in the Opposition a paper written by Mark Joy on the consequences of default in a world where for the past 30 years no country has come out of default unscathed. If one wants an example one should look at every country which had to reduce not so much its debt but its deficit. We borrow €45 million every day to keep the country afloat. Many people in the Opposition are hearing this for the first time. Some people should be quite knowledgeable about this. I fear if we were to implement what they suggest, they would be found sitting in a puddle of their own making on the far side of the Chamber.

Unparliamentary language.

I would like to see redress and a rehabilitation fund put together for the Magdalen women we discussed today. There is no doubt it is because of movements and getting breaks on promissory notes that we will be in a position to try to tackle this serious issue and other social, education and health issues. Reckless is the only word I can associate with this motion. It is absolutely reckless, and to have the audacity to provoke anger and then charge people into a hall to listen to this anger is not what political representation is about and not how I want to be associated with politics in this country. The Deputies should front up and welcome any good news associated with this country.

With open arms we will welcome it.

Do not be found wanting when we are trying to redeem the country from the mess that Deputies now in opposition made.

Sinn Féin, Fianna Fáil and Members of the Opposition will not have done anything to regain the sovereignty of this country, not taken one step.

I support the Government amendment. Much of the debate on the promissory note has been headline grabbing and I want to give my thoughts on the issue. How will this affect real people's lives? The consequences of default do not bear considering because it is too risky. Everything is about risk so what is the risk to the ordinary person of default? The risks are enormous. In any person's language it is too risky. The key components of the promissory note are the interest rate and the repayment schedule. How does it affect real people's lives? In the negotiations on the promissory notes an interest holiday was taken and 8.2% will go in from 2013 to 2015.

After deferral.

It was done as an election gimmick. I believe Deputy Mattie McGrath was with Fianna Fáil when it was put through. Subsequently he was not.

This is about bringing us out of the bailout programme in a twofold manner, by reducing the interest rate and the amount of interest we pay from the current budget each year, which will have a benefit in real people's lives, and rescheduling the repayments. A key reason for this is we are now in the rundown to exiting the bailout, and to ease the impact of this on the ordinary person, anyone giving money to Ireland must be able to see they will be repaid first and that repayment of the promissory note will be put down for a good number of years.

The proposal put forward is about default and those who tabled it should look into their hearts. Anyone in business would say the risks are way too high. I do not agree with it because countries should pay their way. I know the background to the promissory note. We want a proper negotiated settlement dealing with the interest rate and repayment schedule which will have an effect on real people's lives. It is important we get our sovereignty back and this is about coming out of the programme in an easier rather than a more difficult fashion.

The most important challenge for the people we represent is for the State to be in a position to borrow from banks and financial markets at a rate it can afford to fund hospitals, schools, social welfare payments and pension payments in a few weeks, months or years. The most important challenge we face if we want to rebuild confidence in our economy and if we want people to invest, consumers to spend and jobs to be created is to have certainty in the future regarding from where the money for the public services we all cherish will come. The question for those supporting the motion, therefore, is how unilateral action against the European Central Bank aids our State in doing this. How does unilateral action against the lender of last resort help our country to borrow in the future at a rate we can afford? Next year interest payments on our national debt will be between €6 billion and €7 billion, which is equivalent to the amount of tax collected in many of the big tax headings. If our country was to decide to renege on an agreement to the lender of last resort - which I wish had not been given but it was - why would other lenders decide to make money available to us? This is the challenge.

I have heard people on the other side of the House advocate going down the Argentinian route. I have not heard anyone else suggest the Argentinian route since a court in New York-----

Deputy Donohoe is the only one mentioning Argentina.

Deputy Ross did on Leaders' Questions a number of months ago. I was here. He stated the Taoiseach should look at this route.

That is right.

As Deputy Ross knows, a number of months ago a court in New York stated Argentina had to pay back money to people against whom it took unilateral action. One of the reasons an Argentinian naval vessel was impounded recently in a foreign port was because creditors stated Argentina broke its word. It is the reason the Argentinian state aircraft cannot leave its boundaries for fear of being impounded. This is the nub of the challenge we face. I wish this commitment had not been given, but the risk of us unilaterally breaking it is too high when we need to borrow so much to fund what we cherish.

Listening to many Opposition Deputies speaking on the promissory note, calling on the Government to throw its toys out of the pram, throw its weight around, make noise and be a general nuisance reminds me of immaturity and having no common sense, life experience or understanding of how to negotiate. It reminds me of a junior soccer team trying to line out against the experience of a Premier League team. My father had a great saying: "Empty vessels make the most noise."

You are not so bad at it yourself.

My experience in this Chamber proves that this saying is correct in listening to the Opposition's constant bleatings. The Opposition wants this Government to act foolishly and naively.

They are doing it anyway.

To succeed, however, we must negotiate in a professional, balanced and mature manner - no messing, fooling, erratic behaviour or acting in toddler's mode. Thankfully, common sense has guided our negotiations throughout. The Minister has demonstrated prudent judgment. Make no mistake about it - slow and steady progress produces results. Slow and steady wins the race.

In all conscience, to table this motion and expect responsible politicians to pass it would have been madness. The markets would have interpreted it as an intention to default. This motion would have had a detrimental effect on our country. This ill-advised motion would have jeopardised all the work done by this Government to restore Ireland's name among foreign direct investors and the financial markets. It would have jeopardised jobs.

If we had defaulted, as the ill-advised Opposition wished, we would have no roadmap, plan or vision. The Opposition should remember that it can only throw its toys out of the pram once. The reality then is that it has nothing to play with. It is time to back off, stop the nonsense and leave the tough negotiations to the Taoiseach of our country, Deputy Enda Kenny, and the Minister for Finance, Deputy Michael Noonan. We can rely on them to do the job. I would advise the Opposition to leave it to the premier team of this Government, as minors have a lot to learn.

Is Deputy Phil Hogan on the team?

She is looking for a junior Ministry.

She is goading us.

I call Deputy English who has three minutes.

He might do a proper job.

Should I put that on my CV? I welcome the chance to say a few words on this matter. If I had more time I would go into bashing those who tabled the motion, but I will not do so. I understand what the Opposition is doing here, however, and why it has tabled this motion. There is unbelievable anger out there about the promissory notes and banking debt.

I share it and hate every bit of it. I wish that none of the debt had anything to do with us. Intelligent Members of the Opposition, which most of them are, will recognise that when the previous Government gave the guarantee, it made it our sovereign debt. As much as we may dislike it, it became Irish debt. I hate it as much as those who voted for me and whom I represent in here, but I also deal in practicalities. The problem is that at the moment it is this country's debt, so what will we do about it? We could renege and not pay it, but that would not do good for our reputation abroad. The Government has tried to repair that reputation over the past two years and it is slowly getting there. The proof is that we can see investment coming into the country. We are winning jobs and money back into the country. I accept it is happening at a slow pace and we would all like it to be quicker but it is getting there. It is going in the right direction compared with what it was. That is happening because people like to invest in a stable, sound country.

We are now regarded as stable and sound. If we really want to make the country unstable again we will see what happens to investments. As historical research proves, if one reneges on debt, there is no doubt that it will take about four years before one can win back investment and people's confidence. The public cannot wait another four years to win back investment and jobs. We need them now.

The Government is trying to make debt more sustainable in the short term. Hopefully tonight we might hear more news about the negotiations over the next couple of weeks. The aim of these talks is to make the promissory note more sustainable. We would love to wish it away but that will not happen overnight. We first have to make it sustainable, thus managing the interest a little bit better and easing the cashflow. That is the start. In the years ahead we will continue negotiations about what happens to the €30 billion plus that is still there. We will work on that but it could take at least two or three years to get the initial deal on this. Hopefully we will hear something in this regard. We must get the interest rate down and extend the repayments as long as possible. Inflation and growth will deal with a lot of that but we can continue dealing afterwards. Firstly, however, we must make the debt sustainable so that we can manage it. We cannot afford to continue paying out €3 billion plus every March plus €1.8 billion in interest. That is what the Government is trying to avoid and I believe it will be successful.

One must accept that these deals are never done in a week, a month or a year. It takes time. Deputy Stanley said earlier that the public are growing tired. They are growing tired but they still expect us to do the right deal and get the best we can, even if it takes a little bit longer to get that.

Regrettably, I must put it on the record that I consider the motion to be an opportunistic exercise in populism of the worst kind. While Deputy English is correct in saying that there is public concern and anger, this motion is a cynical exploitation of that and it is misleading people.

The Governor of the Central Bank, Professor Honohan, has confirmed to the Joint Committee on Finance, Public Expenditure and Reform that the negotiations are ongoing to achieve a solution to this problem at a very high level. That has also been confirmed by senior Cabinet Ministers. Professor Honohan told the committee that by reneging on the debt, as some people opposite would suggest, we would put welfare payments to vulnerable people at risk. In addition, we would be putting people's savings at risk.

International confidence in this country has been restored, which was an important backdrop to the negotiations. The Taoiseach, the Tánaiste and the Minister for Finance have done a huge job internationally. Good work has been done at all levels, including diplomatically. The recent support for Ireland's case by President Van Rompuy of the European Council is a testament to that. Many other significant people in Europe have also supported our case. We have already achieved €10 billion in savings on interest as well as restoring confidence and attracting inward investment. Achieving money at competitive rates through the sale of our bonds is an indication of our success on bond markets.

We have developed international confidence, while the negotiations which are at a critical stage are being conducted admirably. It is not helpful to rush those talks, conduct them in public or create the illusion that some easy populist solution exists. It is time that people were straight about this. They should know better.

Read the script, Joe.

Ireland settled the first two tranches of €3.1 billion in 2011 and 2012. The first tranche was paid in full on 31 March 2011, while the 2012 payment was settled by way of a long-term Government bond. That means the State did not pay the €3.1 billion in cash in March 2012. The bond was a complicated arrangement financed with the Bank of Ireland. While this arrangement reduced the level of the emergency liquidity assistance provided by the Central Bank to the IBRC, the Government will still have to repay the bond. This Government is confident of a deal before 31 March 2013 and is engaged in continuing talks with all relevant parties in Europe.

The Government is examining all options, including the source of funding, the duration of the notes and the interest rate applicable. Ireland has been recognised as a special case. The Government has made painful sacrifices in successive budgets to hold up our part of the bargain. Any suggestion that we move away from this agreed approach will only bring additional risks to the table and raise the stakes at a critical time in the discussions.

The Opposition motion, if passed, is a threat of default that would further increase the cost of credit in the economy and tie us permanently into relying on support from the IMF, the EU and their associated conditions. It would also undermine 250,000 jobs which are directly and indirectly supported by foreign direct investment.

This Government has delivered success through agreements to date, including a reinstatement of the minimum wage and an agreement to retain half the proceeds from State asset sales for investment in job creation projects.

In addition, there has been renegotiation of many of the conditions of the programme, as well as a reduction in the interest rate of the European Union funds, which will save the taxpayer almost €10 billion. Moreover, on 29 June 2012, there was an agreement on breaking the vicious circle between the banks and the State and specific reference was made to improving the sustainability of the programme. I urge Members opposite to withdraw this ill-conceived motion and thank the Chair for allowing me this opportunity to respond to the motion tabled by the Independent Members.

The next speaker is Deputy Finian McGrath, who is sharing time with Deputies Richard Boyd Barrett, Thomas Pringle, Michael Healy Rae, Catherine Murphy, Luke 'Ming' Flanagan and Tom Fleming.

I thank the Chair for the opportunity to discuss the Private Members' motion on the Anglo Irish Bank promissory notes and the negotiations with the European Central Bank tabled by Independent Members. I thank and commend Deputy Ross and my independent colleagues on introducing such an important motion at a critical time for the Irish people. All Members must accept this promissory note issue is of great importance for the Irish people and the country's future. I must also note I am getting sick and tired of listening to Government backbenchers regularly putting it up to the Opposition to come up with ideas and solutions. Opposition Members have been doing so for the past year and a half but the Government party Members have not been listening. First, a decent deal on this particular debt to the European Union is required. At present, it is choking Ireland's potential for economic growth and is not sustainable. Next, the domestic economy must be kick-started by supporting actively the small business sector and creating employment. This can be done by reducing VAT, developing a seed capital scheme to be made available to certain individuals who are starting up new businesses, implementing a three-year tax relief for start-up companies and halving the rate of PRSI on jobs that pay up to €356 per week. In addition, those who have savings, particularly those who are over 65, should be encouraged to spend an additional €20 per week in their local small businesses and shops. These constitute some sensible proposals to try to get us out of this mess and Government Deputies should not say Members on the Opposition benches lack ideas.

Over the past hour or two, rumours have been flying around this House about a potential deal. There are rumours that the IBRC will be liquidated and, in respect of the promissory notes of €3.1 billion, a number of 25 year bonds and some 40 year bonds with the average length being 27 years. In addition, the payments might be stretched over a longer time. My question to the Government is whether the stock of debt will be reduced. This is a key point, as last June's summit decision will not be implemented unless this happens. Moreover, will the next budget be less severe on the people the Government already has shafted?

Failure will force Ireland into a second bailout. The worsening position in Italy and Spain over recent weeks has actually strengthened Ireland's negotiating position. We are now in a much stronger position than we ourselves think. Last night, a well-known German economist spoke on RTE and got a great reception by putting forward the policies of the Independent Deputies. Moreover, it was widely accepted to be a balanced view. I also consider it to be a bit rich of Deputies Spring and Twomey to have a go at the Independent Members in this Chamber. The Independent Members are putting forward sensible policies. They are putting forward the views of the people, are making the point that the promissory note issue is outlandish and are telling people to consider reasonable solutions.

I note that in the last budget, children, families, the disabled, senior citizens, PAYE workers and small businesses were hammered. I urge Members to consider seriously this motion. It will strengthen the Government's hand - it already has done so - and I commend it to the House.

During Leaders' Questions on Tuesday last, I suggested to the Taoiseach that the Government was engaged in an elaborate charade designed to draw the media and the public into a heightened sense of anticipation and anxiety on whether the Government was going to get a deal on the promissory note. The carry-on that has been going on in this House tonight makes this absolutely clear. Questions on whether the Minister for Finance, Deputy Noonan, will come into the Chamber to make a statement or whether there will be a big announcement or a deal are almost up there with the Tánaiste in Chile talking about governments collapsing. They make clear this is precisely what is going on, namely, an elaborate charade or the politics of illusion. It is an attempt to sell a puff of smoke as some sort of great victory which the Government will announce and will claim to be a great stride forward for the country. However, as the Government has stated very clearly for the past year and a half when pressed on the issue, the deal it seeks involves paying every cent of the gambling debts of Anglo Irish Bank. This is the reality and this is the deal the Government intends to announce. One should be clear about what that means. However it might be structured, each cent and euro that we pay back on the gambling debts of Anglo Irish Bank is a cent or euro that is not going into public services, infrastructure or job creation. The Government simply cannot wriggle its way out of that fact.

My point is we should not do that. We should not pay back gambling debts that are not ours, our children's or our grandchildren's, as they will be if the Government does the deal it proposes Instead, this money should go into jobs and public services and into alleviating the misery that is being inflicted on ordinary citizens in this country. The Government claims that were we to do this, there would be catastrophe because of the reaction of the markets. Even Patrick Honohan, when speaking at the Joint Committee on Finance, Public Expenditure and Reform last week, admitted the claim that money would not come out of the ATMs was nonsense. He made that point, not the members. This is a scare tactic on the part of the Government. The reality is that if we did not pay the €9.1 billion in interest next year - not just the €3.1 billion for the promissory note - we would be left with a manageable deficit of €6 billion. We could manage that by imposing taxes on wealth, on the corporations and on higher income earners and by using that money to generate growth and employment, which is the only way we can recover. One cannot recover by saddling this country with billions of euro in debts for 40 years. It is not a victory; it is a puff of smoke and I hope the public see through it.

I welcome the opportunity to contribute to the debate this evening on the Private Members' motion tabled by the Technical Group on the promissory notes. It is interesting that Members are debating this issue tonight while rumours are flying everywhere on Twitter, on news headlines and so on about the deal that supposedly is being done in respect of the promissory notes. Members are being told by the media that the Minister will make a statement in the Dáil and is scheduled to come in at 9 p.m. While this has been seen on Twitter and everywhere else, the Members of the Dáil know nothing about it. They are in this Chamber debating in a vacuum because they do not know the detail of what is being discussed. They do not know the detail of the basis for any deal on which the Government might be negotiating because the Executive does not believe in briefing the Dáil on the work it does. Consequently, Members cannot know what a likely deal might look like, except by looking at Twitter and the rumours that are flying around.

However, Members do know the Taoiseach is adamant that Ireland has not and will not ask for a write-down of any debt. They learned over the weekend that the European Central Bank had rejected the proposal from Governor Honohan because it would be in breach of Article 123 of the Treaty on the Functioning of the European Union. It is very interesting to hear the bank make this point because it proves the treaties and rules of the European Union are, once again, a moveable feast. When it suits those concerned, they can use those rules to reject a deal but if they wish to do a deal, they will bend the rules to make sure a deal happens. By any estimation, the granting in the first instance of emergency liquidity assistance was a breach of the treaties, as was the purchasing of distressed Government bonds, as the ECB has done in recent years to the tune of more than €240 billion. Similarly, the provision of loans to European banks in order that they could purchase Government bonds also is in breach of Article 123 of the aforementioned treaty. However, last weekend the ECB chose to ignore these issues and to claim it could not do a deal on the promissory note for Ireland because it was a breach of the treaties. I very much doubt whether the Government negotiators have pointed this out to the ECB. When Europe wants to do something, the treaties are not a barrier to making it happen and this is something we all should have learned by now. The Government should have learned this and should put it up to them in the negotiations on the promissory note.

Media reports indicate the board of the IBRC already has been stood down and the receivers are in place but the nature of the deal still is not known. The rumours suggest the deal will be on long-term bonds, on which we probably will pay more over the years and will make our grandchildren liable for the debt with a balloon payment at the end.

There is no legal basis for the debt and we are not legally obliged to pay it but we will be making it into senior Government debt, bringing all the legality that this entails. If legislation comes forward over the next couple of days, the Labour Party will vote on the replacement of the promissory note; the party may not have voted for the bank guarantee but it will vote to ensure that our grandchildren will carry the debts of this illegal promissory note.

I thank the Technical Group for allowing me to use some of its time. What is happening tonight is an absolute shambles. I compliment the Technical Group on the motion, which I support, but what is happening outside the Chamber tonight borders on the ridiculous. We have been told the Irish Bank Resolution Corporation, IBRC, or the former Anglo Irish Bank, will be broken up immediately. We were told by this and previous Governments that it would take years to bring about an orderly dismantling of the bank but we are now being told that, miraculously, it can happen tonight if the Minister comes here to make an announcement. It is a sudden magic wand.

Following from the correct comments of the previous speaker, there will not be enough grandchildren or great-grandchildren to pay this debt; there will not be enough children born in future to repay this money.

The position is unsustainable, which is why this motion is sensible. People on the Government benches are pointing their fingers at us and I am thinking of them when the parties were in opposition, as they were going to do everything right then. The parties are now in government and all they can do is kick the can down the road.

The Seanad is standing by tonight but where is the Minister for Finance? The rumours are flying and the motion appears to be timely. I compliment the Technical Group on bringing this forward. We are being seen as the lap dog of Europe.

This Government is being treated as such. I do not want to see our children, grandchildren and great-grandchildren being saddled with a debt that we are neither morally nor legally bound to repay. It should not be that way. What we are hearing is being proposed over the next couple of hours is an act of kicking the can further down the road, burdening our youngsters not yet born. They will be brought into the world with a massive debt over their heads.

We were told by the Taoiseach that we will not have "default" on our foreheads. I remember the day he said it. Any other country could do it and it would get away with such action. The Government is wrong and I strongly support this motion. If there is to be emergency legislation or an announcement, it will amount to another rushed decision made by people in a panic, like a rabbit caught in the headlights of a car. That is what the Government is like now, and it is not good enough that people supporting the Government are constantly criticising motions like this coming before the House. People should vote with their conscience.

We can see those people in their constituencies, telling people in public meetings that it is shame this or that is happening, with this or that being cut. What do the same Members do when they arrive here but row in like ducks behind the Government, waddling along to vote through every issue?

When they return to the constituencies they say it is a terrible fright but this does not come out of the blue. The Government cannot do what they are doing to the people without the support of the backbenchers. We will hold them to account yet.

I strongly believe in democracy, and we all agree that what happened in the small hours of the morning that the banks were bailed out and secured was fundamentally undemocratic. The Irish people decided to make a major change in who was returned to this Chamber in an action described as a democratic revolution. As an elected representative, I am tonight relying on Twitter rather than anybody from the Government side to tell me what is going on.

A tweet from Mr. Alan Dukes has indicated that the IBRC board has been stood down and KPMG, which I believe are the former auditors of Anglo Irish Bank, are now the liquidators. I have seen from a tweet from Bloomberg that the final European Central Bank decision on the Irish plan may not come in the next 24 hours, as ECB officials are said to want more time to weigh the decision. We seem to have already put a liquidator in place and Bloomberg has told us the ECB is considering the plan but I cannot reconcile that paradox. As a public representative, I am offended that we have not been trusted with some measure of information on the issue when it is being widely reported on social networks that changes are being made. That is an absolute disgrace.

I listened to Deputy Mary Mitchell O'Connor-----

She threw her toys from the pram.

She asked us to do two things. She asked us to trust the Taoiseach and the Minister for Finance.

The premier team.

In a terrible time, the people trusted others who occupied the same offices in the small hours of the morning when bank debt was guaranteed. The public does not want trust to be placed in such a narrow confine but they wanted this Dáil to be different. We are not seeing any difference and there is absolute outrage at the idea that this promissory note, which was expected to be a temporary measure, will be turned into a bond and formalised. People are not only offended that they will have to pay it but they are doubly offended that their children and grandchildren will have to pay it.

One can consider the negotiating strategy of other countries which worked because, in many cases, they forced institutions to take notice and pay attention. They have nothing like what we have in the most costly banking crisis since the Great Depression. Taking into account the full cost of the banking crisis, the figure is €42 billion to date spent just on our banks. Working done by the Nevin Economic Research Institute and Michael Taft indicates that the average amount falling on the citizens in Europe will be €191, with the average burden placed on the citizens placed on the citizens of this country at almost €9,000. It is unsustainable.

This is not our debt and we should not be paying it. I can live with it if it is called default but let us not treat the people of this country as imbeciles. We will paying every penny of this debt with interest, which is a disgrace.

I have always wondered how Jack's mother felt when he returned with beans, having sold the cow. I now know exactly how she felt. Sadly, however, this story will not end as well as the story of Jack and the beanstalk because when we plant our beans, they will not produce a beanstalk with riches at the top. Instead, the Government will guarantee emigration for my children and my neighbour's children, just as members of my family and my neighbour's family had to emigrate in the past.

The Government has told Opposition Deputies we would make poor negotiators. How can it claim the deal emerging in media reports this evening amounts to good negotiation? Deputies should imagine being woken by a knock on the door tomorrow morning to be told their house had been remortgaged without their permission and they would have to repay the sum involved. Imagine if the messenger then said he would return later, possibly with better news, leaving them to wait and wonder what would happen. Eventually the messenger returns with the better news that, having mortgaged the house behind their backs, he has now secured a better deal on the mortgage that was never sought in the first place but that it will cost more in the long run.

I and many others agree with the comments by the Minister of State, Deputy Brian Hayes, and Minister for Education and Skills, Deputy Ruairí Quinn, that the debt arising from the promissory notes is unsustainable. If that is the case, how will the proposed deal make the debt sustainable? In recent weeks, I asked the Library and Research Service to produce figures based on a scenario in which we secured a deal such as that which has been mooted. It modelled the figures and worked out that a deal spread over the term that has been indicated and repaid at the current rate of interest of 3.78% would save approximately €870 million in the first year, €760 million in the second year and €660 million in the third year. If the debt is unsustainable, how would this level of savings make it sustainable? It does not do so. The Government told us the debt would be unsustainable if we did not secure the right deal. The proposal we have heard about is not the right deal.

I will not use the word "default" in connection with the promissory notes because one cannot default on a loan one did not take out in the first place. We must repudiate this debt because it is not ours. We are told, however, that to do so would mean teachers, doctors and so forth would not be paid. The figures show clearly that if we refused to pay the promissory notes, we would be left with a primary deficit of €3.6 billion this year from a total spend of €57.3 billion. I am sure we could find a way to make a saving of €3.6 billion. We could, for example, refuse to pay the Roscommon county manager the same salary as the US President Mr. Barack Obama receives, or stop paying hospital consultants the same salary as Brian O'Driscoll. Perhaps we could be given control over local authorities to allow me to fillet my local authority and save the country a fortune. There are ways of achieving this saving and while they would mean the big guys would no longer be paid their current salaries, we would be able to balance the books.

We are told such moves would be illegal. Since I was elected to the Dáil, Deputy Peter Mathews has proved he knows more than the vast majority of Deputies, with the possible exceptions of Deputies Stephen Donnelly and Shane Ross. When he states it would not be illegal to take such measures, I believe him because he tells the truth. If we defaulted on or repudiated this debt, we would be better off in the long run.

Whom has the Government asked to do the job on its behalf? From what I heard earlier, it will ask KMPG to do it. This brilliant company has a brilliant past as it was the auditor of a bank that cost the country €6 billion. Well done, lads. Maybe they should bring back Jack and the beanstalk.

On the night of the bank crisis in 2008, one of the greatest scandals and con jobs ever, even in international terms, was perpetrated on the Irish nation. The previous Administration was sold a pig in a poke, to put it in mild terms, and fed false information regarding the solvency of Anglo Irish Bank and Irish Nationwide. This was done in the hours leading up to midnight and it was revealed at five minutes past midnight that this information was a complete fabrication. As a result, a crippling burden has been imposed on this generation and future generations.

D-day or 31 March is fast approaching. As recently as 19 December 2012, the International Monetary Fund warned that Ireland's economy could stagnate, leaving the country in a distressed state for years. It insisted that the European Union help reduce the burden of the bank debt and urged agreement to restructure the €31 billion Anglo Irish Bank promissory notes well before March when the €3.1 billion repayment falls due. The IMF sent a strong signal to the European Central Bank that it must act decisively on this issue and stressed that Ireland also needs a deal on the additional €31 billion it pumped into the zombie pillar banks before the bailout. One option suggested by the fund was the implementation of the European Stability Mechanism.

The managing director of the International Monetary Fund, Christine Lagarde, made some strong statements recently in which she accepted that the IMF's economic model was wrong. The implication of her admission is that the fiscal compact to which we signed up will eventually destroy Europe's economy. The IMF realises that the Merkel-Sarkozy axis focused on achieving debt reduction through austerity and increased competitiveness and considered these measures the most effective means of controlling the crisis. This view was strongly supported by Ireland. In October 2012, however, the IMF concluded that the economics underpinning its assumptions may have been wrong and conceded not only that austerity does not work but that it is counterproductive.

I and many others believe we should, at a minimum, obtain an agreement extending the timeframe for repaying the promissory notes to at least 30 years and reducing the annual repayment to a nominal amount. Such an agreement would not be new in Europe, as Germany only recently finalised its reparations to the Allies agreed after the First World War. This bond, which extended for more than 90 years, established an international precedent. If we were to adopt a similar mechanism for repaying the promissory notes, it would have the least possible impact on Irish citizens and enable us to regain our sovereignty and return to the international financial markets.

The €30.6 billion promissory note will, with interest, eventually cost €47.4 billion. We need to secure a notional interest rate of 0.2% at most. These compromise measures could be pursued in the event that all else fails.

Relevant to the moment, the ECB recently-----

The Deputy has gone over his time.

-----rejected the Government's proposal to replace the promissory note with long-term Government bonds. We must redouble our efforts and revisit matters immediately.

Having listened to the contributions to this debate, I am of the view that there is some common ground on both sides of the House. We are agreed that every effort must be made to reduce the cost to the Exchequer of the promissory notes. We are also agreed, to various degrees, that the State should continue its interaction with our European partners as to how this can be achieved.

As many Deputies will have noted from this evening's media commentary, the ECB is considering a proposal from the Government as part of our ongoing discussions in seeking to reach an agreed position on resolving the promissory note issue satisfactorily. The leaking of some elements of the ongoing discussion is unfortunate. The Minister for Finance has taken action to secure the stability of the Irish Bank Resolution Corporation, IBRC, in the face of these leaks. He has appointed persons to assume the powers of the board for the interim.

The ongoing discussions with the ECB illustrate that the Government has taken the initiative in dealing with our problems, has taken difficult decisions and will take other decisions that are necessary to get the country back on track as quickly as possible. We must ensure, and our European partners must have regard to the need to ensure, that Ireland's capacity to repay its debts is maintained and enhanced.

The Minister for Finance accepts that the necessary adjustments in State expenditure have impacted and will impact on people's level of services and living standards. He also accepts that the impact of the adjustments must be fair and proportionate. He accepts that it is galling to have needed to pump State resources into supporting the financial sector. We must return to the financial markets for funding. We are continuing to work to re­establish our financial credibility.

We need to return to growth and prosperity for the good of our people. The Government is committed to delivering a return to a successful and vibrant economy. We are targeting to exit the programme of assistance from the troika by the end of this year.

Turning to the motion before the House, it is clear that all parties to the current arrangements have something to gain from the current discussions and from an agreed approach to the resolution of the issue. It is in this context that the Government has been working extremely hard to secure a deal. I reiterate that we are optimistic that an arrangement, agreeable to all parties, can be found in the format of the current discussions. The key objective of any new arrangement will be to make the banking-related debt more sustainable. This is central to the Irish position in all negotiations with our European partners.

I am satisfied that any potential agreed arrangement on the promissory notes reached will benefit this country, improve our debt sustainability position and represent a major step in facilitating an early and sustained return to the financial markets.

In the current environment, it is not realistic to consider default as an option or to assume that the Central Bank or the ECB would continue to fund the bank in the circumstances described above. The essence of the Government's amendment to the motion before the House is that an approach centred on agreement is a more effective approach to the gunboat diplomacy proposed in the motion.

The Government's engagement with our European partners and its approach to the discussions has always been constructive and consensual. This approach has been successful to date and, by meeting our commitments and engaging in constructive dialogue with our European partners, we expect to achieve a result. An agreed basis for the renegotiation of the IBRC promissory notes would be the next step on the road to achieving full market access for Ireland by the end of 2013 and would serve to re-emphasise the positive achievements of the Government to date.

Given the critical point at which we now find ourselves, it would not be in our best interests to take unilateral action without the support of our European partners, as proposed by the Opposition motion. To do so when we hope to reach a positive result for the State through constructive dialogue would be nonsensical and would result in negative repercussions for the State and the Irish taxpayer.

Our programme is working. We have met all of our targets to date and have met the quantitative fiscal targets. We beat our deficit targets in 2011 and 2012. We have implemented financial sector restructuring and deleveraging. We achieved banking recapitalisation at a significantly lower cost than initially envisaged.

The Minister of State has gone over time.

We imposed burden sharing on junior debt holders and we are implementing structural reforms with a view to enhancing the growth potential of the economy.

What about his time, Acting Chairman?

A significant increase in cost competitiveness has provided a much needed boost-----



The Minister of State to-----

He has read out enough.

-----to our export sector. We are introducing-----

Will the Minister of State conclude?

This debate is to be guillotined at 9 p.m.

I have almost concluded. It is important that I conclude.

Why is it important?

Of course it is. What about the Government?

It's all on the journal-----


The rules of the House-----

The Minister of State is concluding.

We are introducing fiscal reforms to improve the management and control of our public finances.

On a point of order-----

A stabilisation in the level of unemployment and positive expectations-----


-----regarding employment growth have been experienced recently.

Why is the Minister of State allowed to conclude?

We are in the minority.

The Minister of State is concluding.

Why is the Minister of State allowed to enter the Chamber and go over time?

On a point of order-----

There have been increased activity levels in the commercial property markets, particularly among overseas investors.

On a point of order, why is the Minister of State allowed to go outside-----

The Minister of State must conclude now.


On a point of order-----

Why is he allowed to go over time?

He has been asked to conclude.

Residential property prices have stabilised and there has been an uptick in the volume of mortgage approvals.

He is not taking any notice of the Acting Chairman.

We now know that Deputy Ross does not have the national interest at heart. He is playing politics.

At what point will the Acting Chairman throw out the Minister of State?

Above all, the renewed confidence in Ireland has been reflected in the significantly lower yields on sovereign bonds.

The Minister of State has gone over his time. I ask him to conclude.

Let me conclude.

The Minister of State can do whatever he wants. Keep talking.

The motion before the House seeks to force Ireland's hand-----

Will the Acting Chairman give us more time?

-----in the current negotiations while discussions with our European partners are ongoing.

On a point of order-----

We cannot hear what he is saying.

The Minister of State must conclude.

The Government's amendment reinforces the current approach to the issue of the IBRC promissory notes and avoids placing a restriction-----

On a point of order, will there be more time for the Opposition?

The Minister thanks the Deputies for this constructive and helpful debate-----

Let the Minister of State put the icing on the farce.

-----and reassures them that we are working to bring matters to a speedy conclusion.

Will more time be added?

Deputy Donnelly is next. He has ten minutes.

Or as long as he wants, apparently.

Yes. He can go on for as long as he likes.

We are hearing news that the Government will make an announcement in the House at 10.30 p.m. In that context, this motion is extremely important. Under the motion, we in Dáil Éireann call on the Executive to ensure that any restructuring of the promissory note is done on the basis of a fair sharing of the burden. If it is not possible for Ireland to share the burden of bailing out Anglo Irish Bank and Irish Nationwide, then and only then should we assert that we will not continue with the payments. This is the motion that we have proposed to our colleagues in Dáil Éireann.

Why are we making this call? In total, the Government has pledged €35 billion to Anglo Irish Bank and Irish Nationwide, €31 billion of which is in the form of the promissory note, the topic for this evening. It was pledged to ensure that those banks could pay everyone they owed when they collapsed. Who did we guarantee? In September 2008, Anglo Irish Bank and Irish Nationwide had combined total liabilities of €110 billion. That is what we guaranteed. Three quarters of this amount was in deposits and the remainder, €28 billion, was in bonds.

Had the market and the rule of law been allowed to take effect, the bank would have been closed down and the creditors would have been paid out of the remaining diminished assets. It is certain that the holders of the bonds worth €28 billion would have taken heavy losses. It is entirely possible that some of the depositors would have taken losses, too.

At that point, Dáil Éireann and the Irish people could have decided what level of guarantee we would provide to those depositors. I expect we would have focused on Irish depositors. However, that is not what happened. The Irish people are on the hook for €35 billion to Anglo Irish Bank and Irish Nationwide. The Irish people bailed out everybody. One could ask why the Government did that. It was not to protect depositors. That could have been done for a fraction of the price. It was not to protect the other Irish banks; there was no risk of contagion because they were all guaranteed anyway. It certainly was not because Anglo Irish Bank or Irish Nationwide were of any relevance to the economy other than that they were trying to destroy it. Why did the Government do it? It did it because of a diktat from Europe that said no European bank could fail, no eurozone bank could fail and no senior bondholders could incur any debt. That is why the Irish people handed €35 billion to Anglo Irish Bank and Irish Nationwide - to protect the European and eurozone banking system.

In issuing the promissory notes, the Government loaded every citizen with more debt than any other European citizen has had to take on - in fact, several times more debt. The motion says that we require a negotiated agreement that results in fair burden sharing. That seems pretty reasonable. At the time the State and the people took the hit for Europe. We stabilised the eurozone system. It was of no benefit to us to do so as our banks were already guaranteed. We took the hit for Europe and now we are saying that because of that, we need a negotiated agreement that spreads the burden in a fair and reasonable manner. That is the motion before Dáil Éireann this evening.

The Government’s motion also seems reasonable. It says we are in the middle of negotiations and we are going to do our best so leave us alone. That is good, except for one point: the Government’s stated position is that it has not sought, is not seeking and will not seek a write-down of the total quantum of debt. It will seek to extend the terms and reduce the borrowing costs through interest rates but as a point of principle it will not seek a write-down. On his way out of the Chamber last night, Deputy McNamara said a guarantee is a guarantee. The Taoiseach has said we will not have "Defaulter" written across our foreheads. The Government will not even seek a write-down. It is not that it cannot get it. It has stated that it will not seek one.

We do not know what deal will be announced in the House at 10.30 p.m. this evening. We do know that one option the Government was pursuing was a 40-year bond. I understand that it could alleviate short-term financing pressures and stop us potentially putting €3.1 billion into two dead banks this year which could be used for investment or closing the deficit. I accept that, but there would be no burden-sharing. The people who benefited from that act of lunacy - namely, the rest of Europe - would not be sharing the burden. In fact, the total payments to this country would increase. We would be getting a 40-year interest-only mortgage. That is not an acceptable solution for the Irish people. It is not European solidarity.

If the Government accepts such a deal, it is putting its hands up and surrendering. It is saying that the Irish people will, after all, pay its debts and everyone else’s debts as well.

That is why I support a strategy that says that if there is no burden sharing or meaningful solidarity with our European colleagues, then and only then should we simply not continue to pay the debt, because we cannot. I accept that such a strategy is not risk-free. It would be less risky to continue to be the chumps of Europe and try to pay all of the money. It would be less risky, at least in the short term.

There has been much catastrophising about what might happen were we to unilaterally say that, on the basis that Europe is not willing to share the burden, we are not going to continue to pay the debt. Last night the Minister of State, Deputy Brian Hayes, spoke of the potential loss of hundreds of thousands of jobs. He referenced the possibility that current deposits in Irish banks could be wiped out, because that is what happened in Argentina. That is a bit like saying there are mountains in Wicklow and there was a volcanic eruption in Japan so people should be careful.

There was a volcanic eruption in Wicklow as well.

I make a plea to my fellow Deputies who catastrophise about what would happen if the Government took a stand to look at the literature and examine what happened in similar situations. They do not need to believe me. John McHale, who is the chairman of the Irish Fiscal Advisory Council, said at a conference a few months ago that the consequences of this sort of crisis were significantly less than most people believe. I urge my fellow Deputies to look at the literature and, please, not to quote the example of Argentina. We are in no way similar to Argentina.

I accept there will be consequences if the Government accepts the motion and Dáil Éireann insists that the Executive we hold to account act in this manner. However, there does come a point when one must take a stand. There comes a point when we must say, on behalf of the Irish people, that we have done everything asked of us and we are now into our fifth year of this. The European Commission's analysis shows that we have paid more than any other country to stabilise the European financial crisis. When the figures are adjusted to account for our small size, they show that we have paid 18 times more than German citizens. There comes a point when we must say that we have done what was asked, we cannot do it anymore, and we are not willing to allow our country and our people to continue to bleed. We must take a stand.


Hear, hear.

The first sentence of the motion mentions the danger of imminent humiliation of the country at the hands of the European Central Bank if we agree to a deal which does not include a write-off. I do not know what deal we will get in the next few weeks or in the next hour, but my guess is that this House and this country will be humiliated by midnight.

Deputy Durkan should know all about that.

That is unpatriotic rubbish.

This debate, which is one of the most important in the history of the State, has been marked by a great deal of interruption and some frivolous remarks which, I inform Deputy Durkan, have nothing to do with the debate.


Hear, hear.

A Deputy

Deputy Ross is the frivolous one.

Some of the most shallow remarks have come from those on the Government side who have reduced themselves to insulting Members on the Opposition side who have presented an opinion with which they do not agree but which they have not countered. I accept from those remarks-----

Deputy Ross is the fellow who predicted that we would all be broke.

Deputy Durkan, would you be quiet for a moment, please?


Hear, hear.

That is something Deputy Ross should practise as well.

You are the emptiest vessel in this House. The noisiest-----

Deputy Ross is the one who spoke about working with one hand tied behind his back. He should remember that.

Could Deputy Ross address his comments through the Chair, please?

Deputy Durkan, you are the emptiest vessel in this House.


To their credit, some of your colleagues - Deputy O'Donnell, for example - produced an extremely thoughtful speech about the dangers of risk. I congratulate him.


Hear, hear.

He took the debate seriously. He did not come to the House just to interrupt speakers.

It is a pity Deputy Ross would not take the debate seriously sometimes.

Could we have order, please? I ask Deputy Ross to address his comments through the Chair.

I am grateful to him for doing that, but others have treated the debate as trivial. It should be noted, Deputy Durkan - while you are here - that there were more civil servants in the House than members of Fine Gael for most of last night's debate-----


Hear, hear.

Deputy Ross is the man who predicted he could run the bank with one hand tied behind his back.

-----so let us see how seriously you treat this subject.

Could we have order, please? Deputy Durkan.

I thank the Deputy. The scenario stemming from Government Members' scripts - they have nearly all had scripts, although not Deputy O'Donnell and a few others - has been one of painting default, that bogey word, as something we cannot possibly countenance. Luckily for the Government, Government Deputies have in recent times all discovered from their press office the country of Argentina and will all come out with four or five lines about how we do not want Ireland to be another Argentina. None of them seems to want to mention Iceland or Russia and what an embarrassment it is that there is Greece which, to my knowledge, has defaulted four or five times already and is still having money pumped into by the ECB. It has done far better out of its attitude, of which I do not approve, than the Irish Government which has been so humiliated by the deal it is about to announce.

Does the Deputy want to go and live in Greece?

The consequences of what is happening-----


The Deputy should go back to Limerick to look after his constituency.


Can we have order, please?

We have the Russian, Icelandic and Greek experience. The Minister of State may well laugh, but his script last night was laughable. He had not even read it in advance.

The Deputy is pantomime at its best.

The Minister of State read it like a baby reading for the first time. It was extraordinary. He read it like a man who did not understand what he was saying.

The Deputy is hilarious.

Can we have some order, please?

It is great to hear the Minister of State say something unscripted for a change. He should stand up and make a speech which he has made up himself.

Where is Seanie now?

Creditors forgive countries which default very fast. Creditors forgave Russia and Iceland very fast.

They were all in the eurozone, were they?

Iceland and Russia, after defaulting, were back into the money markets very fast.

This is illiteracy.

It may well be the case that it is quicker and cleaner.

We are five years into it.

No, it is not five years in Russia's case.

It is in our case.

It is quicker and cleaner to wipe off the debt as part of a negotiated deal than it is to continue with this humiliating policy which will dump the debt on our grandchildren to the shame of the Government.

The Deputies would be far better trying to save Garda stations.

Before I put the question, I call on the Minister of State, Deputy Paul Kehoe, to move a motion. Is that agreed that we adjourn the debate?

No, it is not.

It is not agreed.

The question is, "That the motion be agreed to." The question is carried.

We have agreed to adjourn the debate to allow the Minister of State-----

No, we have not agreed.

It is a procedural motion.

We did not agree to it.

It is a procedural matter.

Why did the Acting Chairman put the question?

I advise the Members opposite that it is a procedural matter for the House.

Why did the Chair put the question?

Is it the motion that was included in the journal?

Can we have some order, please?

Debate adjourned.