I call Deputy Sandra McLellan. I understand you are sharing time with Deputy Aengus Ó Snodaigh. Is that correct?
Bond Repayments: Motion (Resumed) [Private Members]
The following motion was moved by Deputy Joan Collins on Tuesday, 26 November 2013:
“That Dáil Éireann:
calls on the Government:
— to immediately lobby the European Central Bank for a one-off exemption from the rules of monetary financing, to allow the Central Bank of Ireland to destroy the €25 billion in sovereign bonds issued in February of this year, in lieu of the remaining promissory notes, plus the €3.06 billion bond also being held by the Central Bank of Ireland in payment for the 2012 promissory note; and
— to cease any and all interest payments currently being made on those bonds.”
Debate resumed on amendment No. 1:
To delete all words after “Dáil Éireann” and substitute the following:
“recognises that:
— decisions taken by the previous Government have unfortunately resulted in the inclusion of the promissory notes as a part of Government debt since they were issued in 2010;
— this Government successfully reached a conclusion to its discussions with the Central Bank in February, that delivered on our commitment to put in place a fairer and more sustainable arrangement on the Irish Bank Resolution Corporation promissory notes for the Irish taxpayer and this was noted by the European Central Bank, ECB;
— the agreement represents the best outcome available to the State in relation to the promissory notes and the Government will fulfil its legal obligations and redeem the sovereign bonds issued to the ECB in relation to this transaction as they fall due;
— the current approach with our European partners has led to a number of other positive developments during the lifetime of this Government to date that will serve to alleviate our debt burden, including the reduction of the interest rates on our EU programme borrowings and the extension of the maturities of our European financial stability facility and European financial stabilisation mechanism loans; and
— this is the best course of action in order to restore our international reputation and successfully exit the EU-IMF programme and regain sustainable market access;
acknowledges that:
— the implications of not making such payments, or raising the possibility of refusing to make these payments, are such that the State’s ability to regain sustainable market access could be put at risk with major implications for the funding of vital public services such as the social welfare, health, and education systems; and
— the Government should not act unilaterally in relation to the repayment of sovereign debt and should have regard to the views of our partners who are providing the requisite funding for Irish financial institutions;
and affirms that the approach being pursued by the Government is, given the situation the Government has been presented with, the optimum approach which will produce the best medium to long-term outcome for the State and the Irish taxpayer."
- (Minister of State at the Department of the Environment, Community and Local Government, Deputy Fergus O'Dowd).
I am not sure.
Last week, during the course of statements on the decision not to seek an additional credit line I stated that, while welcome, the decision should not be considered to be a job done or anything approaching a certain return to times of prosperity. I took the view that amid the excitable reaction and triumphalism on the Government side there was a need for perspective. I believe this motion provides that perspective.
We are still a country carrying levels of debt which are utterly unsustainable. The word "unsustainable" has been used time and again in the Chamber, but what I mean is that our economy will continue to struggle to cope with these regular payments. More than any other fact, the reality of being forced to pay these debts will dictate Ireland's economic future for the next 30 to 40 years.
We all know the origins of this debt. The Fianna Fáil mismanagement of the economy and its disastrous decision to guarantee those bonds will live in infamy. The mistakes of that period should never be forgotten. However, that does not allow the current Government off the hook. It has resolved on numerous occasions to pay the bondholders this odious debt, culminating in the decision in February to turn the remainder of the promissory notes into sovereign bonds. The Government may well condemn and criticise the previous Fianna Fáil Government, but it was the current Government which foolishly turned the notes into sovereign debt on the basis of a short-term publicity boost, long since forgotten, and on the basis of a broad aspirational statement at a European level. As things stand, a commitment does not look like coming to fruition.
We need not go back over red cents and Frankfurt's way once again, but the mandate these parties received was clear. It is perfectly clear to me that the Government's strategy, which seems to be to remain as quiet, meek and accepting as possible, has failed. Time and again the Government has failed to raise the matter at European level. Where has that left us? It has left us with a debt that remains vast, at 124% of GDP and it is increasing.
I commend those who have steadfastly campaigned against the payment of the toxic debt, including the Ballyhea group from north Cork. We stand with them and share their view that we have no obligation to honour the debts of these speculators and gamblers and that our children will deeply regret that failure. Our children will curse that decision. The Government traded the €28 billion promissory notes for a sovereign liability to the State which could, with interest, amount to €60 billion. If ever a decision were to be described as penny wise and pound foolish, that was it. Not one penny of that debt was caused by the public. We never needed to pay those debts, they were not our debts then and they are not our debts now. We have consistently pointed out that we did not need to pay the debt, that such a course of action would not damage confidence in Ireland and that it would be wrong to pay these bondholders.
There is a bitter irony in the fact that now, as our Government has turned promissory notes into sovereign debt, burning the bondholders appears as though it might become European economic policy. Economists are fond of referring to Japan's so called lost decade in the 1990s as an example of continued economic stagnation. In Ireland we will not only have a lost decade but it will be compounded by a lost generation as we lose vast numbers of our young people. We had long trumpeted our young population as a major economic asset. Now we have a situation whereby of the 89,000 emigrants in 2013, a total of 34,800 were between 15 and 24 years and 41,000 were between 25 and 44 years. This will have a significant impact on our long-term ability to attract investment and create jobs.
Despite the Government's efforts to paint a rosy picture, the long-term outlook for the Irish economy is not so positive. If we are to return to real prosperity it is essential that the debt burden is lifted. It is not too late to tackle this. The consensus in Europe has shifted and generally there is an acceptance that the type of debt we have paid out on is odious and that the State should not be liable. There is an opportunity to be grasped. However, for that to take place the Government must change its approach and take a firmer line with the European Central Bank with regard to the debt. We should not simply hope that the bank will look kindly on Ireland, we should demand movement. I hope the Government backs the motion and acts on it, for the sake of our children's future.
I have five minutes. I am not an economist. I suppose I am fortunate enough to have a resident economist at home. Otherwise, I would be insolvent at this stage. I do not intend to discuss economics, what the Government did or did not do in 2008 or the decisions it took. I would prefer for us to consider what is right and wrong, just and unjust, fair and unfair. I believe the Government mindset, articulated by the Taoiseach when he explained to the world media that we all partied during the so-called Celtic tiger years, is fundamentally inaccurate.
It is bad enough to be inaccurate but that mindset has driven the Government's failure to ensure that those who created the economic crisis should be responsible for rectifying it. I am referring to the grasping bankers, the non-functioning regulators, the greedy and opportunistic bond purchasers, the incompetent politicians, the auditing companies which allowed the entire mess to build up under their noses, the developers whose greed for the quick hundred million bucks smothered their sense of what was right or sensible and most of the media, who slavishly passed on the messages about putting on the green jersey, about the fundamentals being sound and about there being a soft landing, if anything. These are the people and organisations who allowed us to reach the stage where the nation was left on the brink of abject bankruptcy.
Who is paying for these failures? The answer is the people who did not party. Those who did the right thing are paying for it. Those who followed the advice of their so-called betters by buying or building homes for their families rather than depending on social housing are paying for it. Did the people and families who are now homeless party? Did the people dependent on social protection party? Did the young people who are leaving our schools and colleges and emigrating in their thousands party? Did the people on waiting lists for hospital services or those receiving a pittance for caring for their loved ones party? Did private and public service workers on low or average wages party? Did those who followed all the advice, who took out mortgages and who are now in default and serious negative equity party? None of these people, or few of them, partied. Yet they are paying the ransom for those who caused or permitted the crisis in the first place, the same people who continue to party.
Many of the individuals and companies who bought out the bonds did so at bargain basement prices because there was a general market expectation that there would be significant losses on those investments. Did those who purchased at rock bottom prices have any inkling that this generation of Irish people would impoverish themselves and future generations to guarantee full profits for the bond purchasers and to save the European economy from collapse?
How much did they know before buying those bonds at rock bottom prices? While the previous Government may have signed up to the so-called bailout and austerity, the current Government has continued this policy. It is the gift that keeps on giving, that is, giving to the bondholders, the bankers, the auditors and to politicians, as well as to those who now are retired but were up to their necks in causing or overseeing this disaster.
It would be wrong were a neighbour of mine to tell me he placed €10,000 on a bet with Paddy Power but the horse did not come in and furthermore, that the money should have been spent on preventing his house from going on fire - because if it did, my house also would go on fire - but in consequence, he was seeking from me both the €10,000 and what he would have won, had the bet come in. Would that be right, just or fair? One can argue the economics all one wishes but it is wrong and it should be changed immediately.
I understand Deputy Breen is sharing time with Deputies O'Reilly, Spring, Bannon, Nolan and Buttimer. Is that agreed? Agreed. Deputy Breen has five minutes.
I welcome the opportunity to contribute to this debate. All Members share the anger at the burden that has been placed on the backs of the people and at the banks' role in precipitating this crisis. The promissory note deal was another of the legacy arrangements the Government inherited from its predecessor. However, the Government has managed to renegotiate that deal, securing significant savings for the Exchequer in the future. The agreement was made possible because of the considerable work done by the Government to repair Ireland's international reputation. The Taoiseach and the Minister for Finance are held in high esteem among their international colleagues, because they recognise the work they have done to bring sustainability to the public finances. Were this motion to pass in this House tonight, it would undo all of the good work that has been done in recent years. I note 15 December next is D-day for exiting the bailout. This decision has been met positively by the markets, which also are positive about Ireland's post-bailout prospects. However, such market sentiment would change very quickly if international investors thought Ireland was going to default on its debt.
Members cannot afford to let this happen at a stage at which an economic recovery is gaining ground and there are continued signs of stabilisation in the jobs market. Members should consider the Central Statistics Office, CSO, figures published yesterday, which confirm that 5,000 jobs per month now are being created in the private sector, compared with the position inherited from the previous Government, when 8,000 jobs per month were being lost. Foreign direct investment is flowing back into the country and I believe the Opposition motion, if passed, would seriously jeopardise this flow of inward investment. Put simply, international companies would not choose Ireland. They would take their investment and, more importantly, their jobs somewhere else. The IDA perceives the competition from the United Kingdom and elsewhere to offer a considerable challenge to the goal of bringing jobs to Ireland. Moreover, I can vouch for this because as Chairman of the Oireachtas Joint Committee on Foreign Affairs and Trade, I regularly meet international investors. They view Ireland as a good place in which to do business because the economic situation has been stabilised, because competitiveness has been maintained, because of Ireland's attractive corporation tax rate and because of its position as a gateway to Europe and its access to a market of 500 million people in the European Union. If our reputation with Europe is seen to be damaged, I believe the incentive to invest here in the future would be greatly affected.
The people will never forgive those who want to prevent jobs from coming into this country and if passed, this is what this motion would achieve. We certainly would have no credibility in Europe or anywhere in the world. At present, nine of the top ten pharmaceutical companies in the world are located here. We have the best-educated workforce and most of the social media companies have based their European headquarters here in Dublin. We certainly do not wish to renege on our obligations. Can the Opposition Members who support this motion tell me how they would propose to bring in further foreign direct investment were the House to approve it? Ireland certainly would not be in the position in which it has found itself this week. Like many Deputies in this House, I seek more foreign direct investment and not less. I of course seek a greater regional spread of these projects, which is extremely important. Everyone is aware that 80% of foreign direct investment is coming into Dublin, Cork and Galway but I certainly want the other regions to get more of that as well. At every opportunity I get when travelling abroad, I try to educate investors about the importance of access and of investing in the other regions as well. I talk of my home region of County Clare, which has an international airport at Shannon that is an engine for growth for foreign direct investment.
If this motion is passed, all the work that has been done in recent years will unravel. To deviate from the Government's economic strategy now would have catastrophic consequences for the country and more especially for the people, who wish to work. Ireland would have no credibility with its EU partners and it would drive international investors out of the country. As Ireland is on the brink of exiting its bailout programme, access to the markets is critical for it. A vote for this motion is a vote to enter another bailout programme and for that reason, as well as to protect the level of foreign direct investment, I ask Members on the Opposition benches to reject this motion and to vote with the Government to continue the approach that is delivering recovery and job creation for the country.
The argument of Government Members against this motion is entirely strengthened and underlined by yesterday's news on employment and the revelation that over the past year, 58,000 new jobs have been created in the private sectors over four consecutive quarters. Moreover, 1,200 jobs per week are being created at present in the private sector, in contrast with the 1,600 jobs per week that were being lost under the previous Administration. That is the backdrop to the motion and the only way in which one can consider it.
I accept fully that additional measures are required to improve further the jobs situation. Further stimuli are needed, as are better credit lines. Moreover, it is necessary to have the youth guarantee scheme up and running and to continue with prudential financial management and probity in the State's finances to give confidence to inward investors. I note all of this is taking place, and it merits, stating that as Ireland exits the bailout, Members should applaud the people for their fortitude and good sense, as well as the manner in which they have stayed with Members in the project. One cannot underestimate the pain people have suffered and that should never be understated. The people merit applause in this House for the manner in which they have coped. They must have felt justified in their forbearance by yesterday's outcome, the promissory note deal to which I will turn later and other issues. It was necessary to get the correct conditions to get job creation going and one must have full and independent access to the financial markets, which is pending. In addition, Ireland has had good outings in those markets in recent years and I note Moody's is upgrading Ireland's status considerably. Ireland needed to and has restored its international reputation. It also has reduced the State deficit to a point where the budget deficit will be 7.4% of GDP this year and is on target to reach 3% by 2015, which is an extraordinarily important aspect.
While it is all about job creation and that is the only agenda, everything the Government does is predicated around achieving that. No one can understate the horrendous youth unemployment problem but at least the number of young people at work has increased by 3,200 or more than 2% over the past year. In addition, long-term unemployment has dropped from 8.9% to 7.6%. The Government also has reduced the cost of State borrowing by €20 billion in the next ten years. This is due to the replacement of the promissory notes and the associated annual payment of €3.1 billion with long-term, low-interest Government bonds over a 25 to 40 year period, on which the State will pay a floating 3% to 3.5% interest rate.
We will borrow the money from the Central Bank which receives loans from the ECB at 1% or less, meaning our Central Bank stands to make 2.5% profit per year. The Exchequer will profit and the effective interest rate will be 1%.
The difficulty with the motion and the proposition before the House is that it would destroy our prospects of getting funding from the international markets. It would undo almost three years of backbreaking work and great sacrifices by the Irish people. It would be silly to effectively do a U-turn at this critical juncture, having got so far. It would damage us on the international markets which would ultimately have implications for the financing of public services such as social welfare, health and education. Job creation would be jeopardised by this proposal and critically, it would affect inward investment which is vital for job creation. We are only a few weeks away from exiting the bailout. We are getting the public finances under control. We have achieved this while maintaining core social welfare rates and without increasing personal direct taxation and while maintaining direct payments to our farmers which supports the rural society affected by the imbalance in job creation. We are now creating jobs and there are signs that the economy is in recovery. It would be bizarre and crazy to change course at this point when we are winning. I urge the people proposing the motion to reflect and to modify it accordingly so that we can agree a revised motion.
The sentiment of the motion might be correct in many aspects but the timing of such a motion is inappropriate, given that debt which was not originally a State debt became sovereign debt on the infamous night of the bank guarantee. Ironically, on that night, Sinn Féin secured the vote for the Government for the bank guarantee when the debts of private institutions became sovereign debt. The time for negotiation was then, but unfortunately, only a small number of people were privy to the information that led to the events that transpired on that night.
We should negotiate with the European Central Bank, the IMF and the European Commission but we should do so on our terms. This view was opposed by many of those who have signed this motion. The ESM has put a mechanism in place whereby it was hoped we could recapitalise the banks retrospectively and also capitalise banks in the future. Some Opposition Members do not seem to see, feel, know or understand what the Irish people have gone through over recent years. Families, friends, associates, have all experienced what has been done to this country. The decision to pay off the debt that became a national debt has not been taken lightly. It is a question of the ability to meet the terms and conditions of all debt.
I am not an Independent Deputy but I am most certainly of independent mind. I try to influence my party and my government colleagues but I obey the Whip because that is the system. However, I am also a member of a European political party, the Social Democrats, whose sister party today became part of the government in Germany. I am not an Independent in this House. However, there are benefits to being a member of a party and being part of a wider European organisation.
I have been there and won the jersey. There are no benefits.
There are many benefits other than electoral benefits to being part of an organisation. We should attempt to get the ESM to work to our benefit. This will be done by means of a diplomatic offensive by Christian democrats and social democrats and our own diplomatic corps as well as our academics who have spoken on our behalf.
I have colleagues in the Greek Parliament who are members of PASOK, a social democratic organisation. They regard us with envy. They ask how have we achieved such growth in our economy and in job creation. In Greece, civil servants have been sacked and the current Greek ten-year bond rate is 8.5%. The largest spike in their bond rate was when they got a write-down from the European Central Bank. Their inability to borrow was such that they went to 15% in the bond market. Every country needs to have access to the private bond markets in order to be a viable investment destination and to have a viable economy. Our recovery is happening in steps. I would like us to be able to write off large chunks of national debt but there is no pixie dust or magic wand. To suggest otherwise is not practical.
I supported an opposition colleague in a high-level meeting with the NTMA and the Department of Finance. The proposal was regarded as inconceivable and inappropriate. We will facilitate any realistic proposal. However, some people take a populist stand and do not speak to EU colleagues.
The Government's objectives are to create jobs and to deal with our debt. Every step we take will be for the betterment of the people. Let no one have the cheek to say we are not doing something for the people of Ireland.
I thought Deputy Spring was a social democrat.
I welcome the opportunity to speak on this motion. In the past week the infamous €440 billion bank guarantee has come to an end and the Central Statistics Office statistics show that 58,000 jobs have been created in the past year. This is the strongest showing yet that we are on a road to recovery. However, there is still the issue of dealing with those that brought this country to its knees. I refer to the Seanie FitzPatrick and the David Drumm golden circle which got €450 million and those who rigged the balance sheet of Anglo Irish Bank.
I remind the Deputy that he may not name persons outside the House.
The dogs in the street know they are the people who destroyed our economy. They wrecked our banking system and were responsible for Ireland losing her hard fought independence. We need to activate the legislation to bring those to book and to see them punished. The ordinary people, the vulnerable, the sick and disabled, who are being targeted for cutbacks over the past six years, want to see those people prosecuted and punished. The people who led the Irish economy into this mess should not be let off the hook to retire on massive pension packages, bonuses and other types of payments. The people of my constituency and the public are not happy with the length of time it is taking to bring serious charges against those who knowingly destroyed our country's finances.
I ask if the Office of the Director of Public Prosecutions is understaffed. What is the delay in bringing those people to justice? How can it be in our best interests to pay promissory notes and billions of euro to anonymous, nameless bondholders when the new poor and the vulnerable are suffering disproportionately while some people who bankrupted this State are not unduly suffering or affected?
Most Members of the House remember the chaos of September 2008 and the blanket €440 billion guarantee of Irish banks. This guarantee ruined Ireland's creditworthiness. There was a mistaken belief in Europe that no European bank must be allowed to fail. The European approach was that everything possible should be done to protect bank creditors. As part of that process the ECB extended a bottomless pit of emergency funding to Anglo Irish Bank in order to allow it repay its bondholders in full.
Nothing in life is free. When this Government came to office the new Minister for Finance, Deputy Michael Noonan, was met with a tap on the back from the European Central Bank asking for its bottomless pit of money back. The Minister was left with the job of having to restructure the promissory note arrangement.
It is important to recognise the efforts made by the Minister, Deputy Noonan, in dealing with our situation and the fundamental shift at European level in dealing with countries in trouble in comparison to when we were centre stage in late 2010.
In the wake of the troika leaving Cyprus, it is remarkable how the Cypriots represent a complete reversal of European policy from the approach adopted towards Ireland. Europe backed us into a corner on paying back the bondholders and now they say there is no sympathy for Ireland because we led ourselves into this mess. That is not the case. It was bad government, bad regulation and the golden circle of people like David Drumm who knowingly led us into this economic nightmare. They are the ones for whom Europe should have no sympathy. It is unfair to blame innocent Irish people for the doings of a reckless few.
White collar crime among bankers and former politicians has impacted upon every taxpayer in the country, and it is important that we do not turn a blind eye to that. The general public are frustrated by the apparent inability to call those people to account. They should not be perceived to be above the law as it is an outrage and insult to our democracy. There are no legal or moral obligations on ordinary people to pay for private banking debt but the Minister knows best how to get our markets right, and I will not question his judgment.
Words are important. Rhetoric is important. Considered words and thoughtful rhetoric are the stuff of ideas, discussion, debate argument, discovery and leadership. The institution that is this House is the rightful place for those of us who advocate ideas in the public space, argue differing philosophies, debate opinions and articulate public support for their validity but hollow words and empty rhetoric, dressed up as policy, with a thinly concealed pretence of validity, do not live up to that purpose. Instead, they mislead.
I received a number of e-mails this week from individuals who told me that by voting in favour of the motion before the House tonight I will be burning the Anglo debt. That is untrue. Telling me that by voting in favour of tonight's motion I will be unburdening the State from unnecessary bank debt is untrue, and that by voting in favour of this motion I will be waving a magic wand undoing all the reality of the previous five years and ushering in a new era is untrue also. Those who have said that to people outside this House are not taking seriously their obligation to genuine debate and truthful exchange.
I have lost count of the number of times slogans and empty rhetoric have been bombasted as the quick-fix solutions to all our country's very real ills. Populist, easy to chant slogans included "Austerity isn't working", "Default, default, default", "Bail out the worker" and so on. Those slogans are devoid of meaning and are not grounded in economics, finance or political reality.
Tonight's motion purports to put lobbying the European Central Bank at the heart of our economic strategy. If we saunter into the lobby of the ECB, have a coffee with Mario Draghi, and whisper lightly in his ear he might do us a favour. Never mind that lobbying in itself is illegal; doing what the motion suggests is also illegal. The irony of a motion before a law-making body arguing for law breaking should not be lost.
The greatest financial crisis this country has ever faced cannot be fixed by slogans. It could never be easy. It was always going to be difficult. Those of us on the Government side of the House have made difficult decisions, introduced difficult budgets and taken serious flak for political decisions we thought necessary. We put the country first, ahead of party and ahead of our own jobs. I am proud that we did that and that having lost 250,000 jobs, this country is now creating 1,200 jobs every week. I am proud that an economy that was choking and spluttering is back on its feet. I am proud that our country's reputation, which was in tatters, is now restored. I am glad that even though there is so much more to fix, the Irish people, who suffered so much, are once again confident that the future is not something to be feared but something that offers hope.
That record of achievement, albeit modest and fragile, was not the product of a cheap slogan, empty words, hollow rhetoric or fairy tale economics but the result of hard work, tough decisions and words of meaning and genuine purpose. We renegotiated the IMF deal. We reduced interest rates. We restructured repayments and got rid of the promissory notes but, more importantly, we placed jobs at the centre of our economic thinking and at the heart of every decision we made.
This remains an extremely difficult time for our people, and there is a long way to go, but as I walk down Shop Street or Eyre Square in Galway, look at the businesses and talk to the people on the street I can see that sense of hope starting to return. A recent survey I conducted of Galway businesses indicated that 70% of businesses have seen an improvement in their trading conditions in the past year, and 24% of businesses intend hiring within the next six months.
These are small beginnings, a return to normality and hope for people that they can return to work, earn a living and provide for themselves again. These results have been achieved through difficulty and perseverance, not by the political system but by those in our country who had to suffer the consequences of a massive international downturn and disgraceful politics which prevailed under the previous Government for over 14 years. It is not the time to risk that. It is not the time to put cheap motions and empty rhetoric at the heart of our economic policy. It is not right to betray people who suffered so much with easy and false hope. It is time to stick the course, which is the right way to proceed.
I thank the Technical Group for putting down the motion, which is an attempt to revisit the past and re-write history. We all wish that things had been done differently but we cannot undo what has been done and what was put in place without consideration of the consequences.
Last weekend was the 50th anniversary of Doctor Who. The Deputies who tabled this motion must have thought they had access to a Tardis. They confused reality with the fictional time travelling of Doctor Who. How else can they explain taking such a reckless step without realising the consequences for the Irish people? Talking about an ideology is one thing but being in government means one is responsible to all of the citizens all of the time.
We have already had one Government that staked the future of the Irish people on a game of high-risk poker and lost. We are now seeing a different approach that is delivering results. The approach of this Government is to work with our partners, use constructive diplomacy to achieve results, and relieve the burden that was put on the shoulders of the Irish people. It is important to thank the Irish people for playing a responsible role in assisting this Government to recover our economic fortunes.
Last February, the Government reached an agreement with the ECB to restructure the former promissory note and to reduce the burden it placed on the shoulders of the Irish people. The effect of that was to reduce the State's cash borrowing requirement by €20 billion over the next ten years. It has reduced the budget deficit by approximately €1 billion per annum over the coming years. We were told it could not be renegotiated but it was renegotiated.
Early in this Government's term we saw renegotiation of other elements of the bailout package including reducing the interest rates, which will save us €10 billion; extending the maturities of EFSF and EFSM loans to up to seven years has yielded significant savings; half of any proceeds from the sale of State assets can be retained and used for job creation; and the cost of bank recapitalisation was reduced by €18.5 billion, limited from an initial €35 billion as per the troika agreement, to €16.5 billion through junior bondholder burden-sharing and securing private capital investment.
I pose a question to the Members opposite. Who are the bondholders they want to burn? They should name them in this House.
The Deputy has the names.
The approach of this Government so far has yielded dividends for our people and our economy. It has resulted in the State being able to re-enter the international finance markets. In the first quarter of this year the National Treasury Management Agency raised €7.5 billion from two over-subscribed bond sales showing the strong international interest in investing in Ireland. Re-entering the markets has put us in a position where we have a cash buffer for 12 to 15 months, which means that we can exit the bailout on 15 December.
The international confidence this Government has restored is not just about financing our country so that we can once again pay for essential services without the support of the our European colleagues. It is about job creation. That is why this week it is important that we recognise the story about job creation.
Let me give the figures for October 2013 which show that for the first time since April 2009, the number of unemployed people in the city of Cork, which I represent and in which I live, has fallen below 39,000. In October, 38,449 people were on the live register in Cork. While this figure is still too high, it represents a fall of 19.6%, or more than 9,000, from a peak of almost 48,000 in July 2010. That is 9,000 Corkonians back at work because of this Government's policy, business investment and the ability of our country to rise above the difficulties it encountered.
Many Members spoke about our economic sovereignty but let us look at the confidence our multinational companies bring in terms of cash injections and job creation. I want to focus on the Cork area where EMC, Apple and the large pharmaceutical companies in the harbour are creating jobs. Foreign direct investment creates and supports approximately 250,000 jobs directly and indirectly in our country. In the city and county of Cork, it will play a key role in the revitalisation of the local economy, although it also plays a significant role today in the local Cork economy.
People want to tamper with our corporation tax. Do not tamper with the jobs of fellow citizens who require foreign direct investment in tandem with what this Government has done through its Action Plan for Jobs to create small enterprises and to give them assistance of which they were starved for so long by the previous Administration. To illustrate my point, I would ask where the Fianna Fáil Members are tonight. The reason they are not here is that they are running from their record. The record of this Government is about getting our country back to work, paying our way, being responsible in government and giving our people hope.
In a Chamber noted for its brass necks, tonight's performance almost beat all. To have to listen to Deputy Spring, who is a former Anglo Irish Bank employee and who contested an election on a programme of Labour's way or Frankfurt's way, ridicule this motion takes some beating. This individual bragged about the Greek economy being on its knees and somehow thought that was something to crow about to his friends in PASOK but I can tell him there is nobody in Ireland who takes comfort from the situation in the Greek economy. We stand in solidarity with the ordinary people of Europe, whether in Greece or in Iceland, when they stand up and say "enough".
We have had correspondence from citizens all over the country in recent weeks about this motion. I want to put on the record some points made by one of those people because this young man, a 27 year old physiotherapist from Cork, actually sums up many of the issues about which we are talking. He told the story of how he treated an 84 year old lady who was very weak and tearful after her night in hospital earlier this year. She had spent a cold night on a trolley near the main door in Cork University Hospital and she asked why was this happening to her after everything she had contributed to this country. He said there were three wards on the fifth floor which were unopened due to staff and budgetary constraints and that accident and emergency nurses were run ragged with all the trolleys. He said this was not bad hospital management, that the rehab hospital was also full and that there were many patients waiting for eight weeks to go to nursing homes because of the cuts in home help hours. He said the issue was one of resources.
This young man went on to say he had worked in the NHS in Britain and in New Zealand and he felt working in Ireland was like working in a Third World country. He explained these issues to the Minister for Health, Deputy Reilly, who he said was trying hard but was missing the bigger picture. He posed a question to all of us, which I want to pose again. He spoke about our motion tonight and said we had the chance to do something about this situation for him and that we had the opportunity to decide on which side we stand. He asked whether we stand with the bankers or with the people of Ireland. That is, in essence, what we are debating.
Last night, the Minister of State at the Department of the Environment, Community and Local Government, Deputy O'Dowd, when speaking against the motion said we follow through on our commitments and that this is the message we want to deliver to the international community. What commitments and to whom? What message do we want to deliver to the international community? Is it that it can hit us with whatever it likes and we will bend even lower and take it? That is not a message I want to deliver. That is not our commitment nor is it that of the people of Ballyhea, the student nurses, the 100,000 young people who are now in Australia, the 400,000 people who are still out of work, the secondary school teachers, the children with special needs, the survivors of symphysiotomy and all of the other people who have been shafted by this debt deal. It is not a message people want to deliver.
There are currently 32 unemployed people for every job in this State. What this side of the House is saying is that we should halt the payment of taxpayers' money to dead banks, banks which are not lending to small and medium businesses, the biggest employer in the country-----
Deputy Spring is back.
Is that right? I have seen him and have listened to him. The Minister of State, Deputy McGinley, might show me the courtesy of listening because his party-----
I am listening to the Deputy very carefully.
-----fought his election on a lie and it is now being held to account for its record, or lack of it, and not Fianna Fáil.
Will the Government instruct our banks to invest our money not in dead banks, but in jobs because the only way in which this economy will recover is by putting people to work? Contrary to the claptrap from the some of the Government backbenchers, the people know jobs are not being created and that people are being driven out of this country in larger numbers than any of the jobs it is trying to deliver. Our hard earned cash should be invested to improve the lives of our citizens and to put people to work on a public works programme to turn around the situation and not given to the vultures who caused this problem in the first place.
I call Deputy Wallace.
On a point of order-----
We are on a very tight schedule.
If there are any allegations-----
Deputy, resume your seat.
Deputy Daly should stand outside this House and make those allegations.
Deputy, resume your seat. We are on a very tight schedule. I call Deputy Wallace.
The debt incurred-----
Deputy Spring has the right of reply.
Stop it, Deputy. There are only a few minutes remaining.
He was an employee of Anglo Irish Bank and he is a member of the Labour Party.
Deputy Daly, let Deputy Wallace continue.
It is not right to suggest that I had anything to do with the collapse of Anglo Irish Bank.
We heard you.
The Deputy should stand outside this House and make that allegation. We will see where we will sort that one out.
Thank you, Deputy. We heard that.
On a point of order-----
I am not taking any point of order.
Deputy Spring is entitled to be protected by the Chair.
Of course he is entitled to that but Deputy Wallace is entitled to speak now.
The debt incurred by the Irish people-----
(Interruptions).
-----through the nationalisation of Anglo Irish Bank debt was certainly questionable and there is a strong case to be made for the cancellation of this debt, especially as the State was essentially defrauded by Anglo Irish Bank. The bank guarantee was illegitimate, undemocratic and probably the worst political decision made in the history of the State.
Why should the people of Ireland foot the bill for generations to come for debts which they had nothing to do with, debts incurred through the criminal or negligent activity of bankers, regulators and politicians? To date, the State has been reluctant to hold bankers to account for wrecking our economy despite the negative impact on every life on this island while on the other hand, the people and those not born have been and will be penalised for offences they did not commit.
Added to the moral argument of who should justifiably be held responsible for banking debt is the economic argument. Economic analysts, such as Micheal Taft, have highlighted the fact that the banking debt is a drain on our economy and counterproductive to economic recovery. Taft shows that Ireland is dangerously indebted with Government figures putting our debt at 124% as a percentage of GDP for this year, the highest it has been to date.
The Government's mantra is not to worry, all of this is sustainable and economic growth will reduce our deficit, as will austerity. Sadly, the truth of the matter is that there will be little or no economic growth in this country while the Government's policies are actively undermining same. The latest figure was 0.4% for the second quarter of 2013 and yet the Government's projections of reducing debt depend on economic growth of 1.8% next year, which was itself revised downwards from 2.4%. Added to this is the fact Government debt is actually higher than the already alarming rate of 124%. When measured as a percentage of GNP, as recommended by the ESRI, our debt is more than 150% this year, which highlights the fact this debt is not serviceable.
However, if the Government is to be believed, the debt is perfectly serviceable. On whose backs can this be done? How much more is this Government prepared to sacrifice to pay off faceless institutional investors? How much more pain is it prepared to inflict on the people of Ireland? Will all of our public assets be sold off over the coming years? Will all services be privatised? Will the welfare state be further dismantled? Will young people continue to be evicted from this country? The level of influence the people of this country have in how it is run is continuing to dissipate. Austerity was not of their choosing. It was certainly not of their choosing that the weakest and most vulnerable should suffer most.
Last weekend, I visited the Corrib site for the first time. I met a powerful group of people who dared to stand up to Shell and to the State in defence of their community and of the environment. They were battered for their efforts. It is a shocking story. I do not believe the community will get over it in the next 50 years. This State should be ashamed of what has happened in the Corrib case in the name of big business. It is disgraceful. I also salute the people of Ballyhea, who are refusing to accept the unfair burden that has been imposed on the Irish people. They have worn out their shoe leather, Sunday after Sunday, to show that this is not good enough, that it is not fair and that the Irish people deserve better. The onerous debt needs to be written off on moral or economic grounds as a matter of urgency. I support the motion before the House.
I wish to inform the House that Deputies Mathews and Healy-Rae have been added to the list of speakers who are sharing time.
Tá an-ionadh orm go bhfuil an méid argóinte agus conspóide ag baint leis an nGnó Comhaltaí Príobháideacha seo. Tá an rún atá os ár gcomhair an-simplí - níl i gceist ach ceist a chur. The motion is a very simple one. It is expressed in plain and non-threatening language. It is about putting a question, lobbying and asking for an exemption. It does not use the language of assertion or aggression. It is not threatening or demanding. It simply requests that we should look for something that, if granted, will be of substantial benefit to this country and its people. It is hard to understand the opposition to this simple request.
The naive side of me wonders whether the reason for the Government amendment is that it is already in negotiations on this matter. I hope this is the case, but I have to be realistic when I see that the amendment uses language like "a fairer and more sustainable arrangement", "the best outcome" and "the best course of action". In its use of a phrase like "the implications of not making such payments, or raising the possibility of refusing to make these payments", the amendment misses the whole point of the motion. It makes something of it that is not appropriate. The amendment also refers to "our European partners". In my view, the term "partners" suggests an equality between people, but instead of that we have a hard task master.
Hear, hear.
This master of domination is stifling our economy. The promissory notes have become sovereign bonds. It is difficult to understand why people thought a change of name meant there would be an actual change. It is not as if the Minister for Finance produced a magic wand to turn the odious promissory notes into magical sovereign bonds. I am reminded of Juliet's question:
What's in a name? That which we call a rose
By any other name would smell as sweet
Promissory bonds and sovereign bonds are the exact same. They are certainly not smelling as sweetly as roses do.
We know what we are talking about. We are talking about the billions of euro that have been paid to date and the €25 billion that is outstanding. When the Central Bank sells that €25 billion worth of bonds, it will destroy the €25 billion it receives. Over the next 40 years, we will pay a total of €72 billion, when interest is included, to repay those billions which were originally used to bail out two insolvent banks. Apart from the injustice of this, it is ludicrous that we borrowed billions of euro in order to burn billions. Additional finances are necessary to deal with the health service, distressed mortgages, unemployment, emigration and housing problems. Some €15 million is being provided to local authorities to deal with housing voids. Dublin City Council could do with that full amount at the moment. I still do not think it would have enough money to cater for the housing needs in this city alone.
I am all for paying my just debts. I believe Ireland should pay its just debts. Ireland is paying for the incompetence and negligence of European institutions in relation to the euro. This is crippling the economy and inhibiting real growth. It is not our debt. Democracy suffered a blow yesterday in the form of the High Court judgment on Deputy Joan Collins's challenge. That judgment seemed to hinge on Article 17.2 of the Constitution, which requires that "no law shall be enacted, for the appropriation of revenue or other public moneys unless the purpose of the appropriation shall have been recommended to Dáil Éireann by a message from the Government signed by the Taoiseach". That is not my view of parliamentary democracy. It certainly makes a farce of everybody here and what we are doing here. It is something for the Convention on the Constitution to look at.
The motion before the House tonight is a tribute to democracy and the democratic will of the people, particularly as exercised by the members of the Ballyhea group. We have to acknowledge their perseverance and tenacity in doing the right thing by their country. They are not going to accept the damage that has been done. I would like to conclude by quoting Pope Francis's interesting comment that "as long as the problems of the poor are not radically resolved by rejecting the absolute autonomy of markets and financial speculation and by attacking the structural causes of inequality, no solution will be found for the world's problems or, for that matter, to any problems".
Some people have asked why we have tabled a motion on the promissory note bonds at this time. I will explain the reason. Every Sunday, in towns like Ballyhea and Charleville, people march to protest against Irish citizens being forced to pay the bad debts of private banks. We do not know to whom we are paying this money because neither this Government nor its predecessor has taken the simple steps required to find out. There are things we do know, however. We know the money was loaned by professional investors to private banks operating in Ireland. We know these loans were made in the full knowledge that they might not get repaid in full. We know many of these loans were sold on to speculators by the original investors. We know these speculators were gambling that the Government would impose a lower haircut on those loans than other people believed. We know this Government exceeded the speculators' wildest dreams by paying out in full in the end, thereby passing vast amounts of money from Irish households to foreign millionaires.
Approximately half of this was done by means of promissory notes - an IOU that was given from the Irish people to Anglo Irish Bank and Irish Nationwide. This IOU was not written for the benefit of Ireland; it was written for the benefit of Europe to prevent two eurozone banks from collapsing and to avoid the potential for contagion to other eurozone countries. When the Government restructured the promissory notes in February, it passed this IOU from Anglo Irish Bank to the Central Bank. Now we are paying interest to the Central Bank on this IOU. In time, we will have to pay the full €28 billion in capital. When the Central Bank gets that money, it will destroy it. It does not owe it on to anybody else. It will not put it to any productive use. That money will simply cease to exist.
A few months ago, a delegation from "Ballyhea Says No" met officials from the European Central Bank and the European Commission. They explained that the IOU was issued in a time of crisis to stabilise the European banking system. They explained that under the new eurozone banking rules, Ireland would not have to pick up this odious debt. They explained that no other European nation was being asked to bear the burden that Ireland is being asked to bear. They asked if the European Commission and the European Central Bank would consider changing the rules of monetary financing once to allow the Central Bank to destroy that €28 billion IOU. The officials sympathised with the plight of the Irish people, but they also said that they could not respond to such a request unless it came from the Irish Government and that no such request had ever been made. That is why we have tabled this motion.
The motion before the House does not call for unilateral action or for default. It simply calls on the Government to ask and make the best case possible for an agreed destruction of that odious debt. The Government has said tonight that it will not even try. We have been told about the dangers of even asking. We have been told it would put 250,000 jobs at risk, lock us out of the money markets and make us look bad in Europe. What a load of rubbish.
The Government claims it is doing a good job and claims to have lowered the interest rate on the troika debt, but it did not. It tried and failed. Portugal succeeded and then we got it. The Government claims to have burned the bondholders, but that is not really true given that €143 billion of senior debt has been paid out in full plus profits. Greece achieved a 50% write-down.
The Government claims Ireland no longer needs to borrow for the promissory notes, but we do and our children will pick up the tab. Yet, inexplicably, it seems the Government does not seem to want to make a fuss in Europe. I say it was elected to make a fuss. I commend the people of Ballyhea and I commend the motion to the House.
I appreciate the opportunity to speak on this Private Members' motion on the needs for the destruction of the legacy bank debt. I commend and thank my Independent colleagues and the Ballyhea Says No group on all their magnificent work, research and consistent campaigning on this urgent and important issue.
Before I go into the details of the debate on the motion, I add my support and deepest sympathy to the families of two great Irishmen, Fr. Alec Reid and Mr. Tom Gilmartin, who died in recent days. May they rest in peace, as they did their country a great service. Fr. Alec Reid made a huge contribution to our peace process and Mr. Tom Gilmartin stood up against corruption. Their families should be proud of them. May they rest in peace.
Will the Government acknowledge the massive burden these legacy debt issues are placing on society and remove the burden of bank debt that was unfairly placed on the shoulders of the people? The wording of the motion is very clear in stating:
That Dáil Éireann:
calls on the Government:
— to immediately lobby the European Central Bank for a one-off exemption from the rules of monetary financing, to allow the Central Bank of Ireland to destroy the €25 billion in sovereign bonds issued in February of this year, in lieu of the remaining promissory notes, plus the €3.06 billion bond also being held by the Central Bank of Ireland in payment for the 2012 promissory note; and
— to cease any and all interest payments currently being made on those bonds.
That is what this debate is about. It is time for the people and the Government to break free of this illegitimate debt. It is not our debt and that is the reality. In February, instead of insisting on a write-off of this illegitimate debt, the Anglo Irish Bank debt, the Government converted the Anglo Irish Bank and Irish Nationwide Building Society promissory notes into sovereign bonds with a longer repayment period but with no element of cancellation. Some €25 billion of these bonds are held by the Central Bank of Ireland and are scheduled to be traded on the markets. This deal was concluded only hours before a legal challenge to the promissory notes was due to be addressed in the Supreme Court. The Government chose to defend the promissory notes arrangement vigorously when the case was heard in the High Court.
It is time to stand up against the socialisation of private bank debt. These are not our debts and we refuse to pay or have our children pay. I call on the Minister of State in this debate to recognise this issue. When looking at this issue it is important to see the impact it has on our services. We have seen in recent days the crisis in our health service and the implications for the future of the country. The number of patients on surgery waiting lists has risen tenfold in recent months. There are 4,473 adults and children on public hospital waiting lists, whereas last year there were 433. That is the reality. This week there were 1,000 people on trolleys in hospitals throughout the country. How is the Government to tackle these issues if we have this debt on our shoulders? How are SMEs to make an impact?
I link this debate on the future of our country with the major crisis in our disability services. Services such as St. Michael's House had €12 million ripped away from it over the past three years. Some 490 families are now on priority residential waiting lists. Respite care services are being cut left, right and centre. I urge everyone in the Dáil to support the motion tabled by the Technical Group. Once again I commend the members of the Ballyhea group on their magnificent work against the odds and against the establishment in the country. The Independent Deputies are sticking with them on this issue.
The deal on the promissory notes gives Ireland some restricted breathing space for economic growth. However, it still leaves the country with a mountain to climb. The reality is we will not begin to pay off the principal on the new bonds until 2038. We will continue to make the payments until 2053, thereby burdening future generations for years to come. The promissory notes payments, when taken with interest payments, will come to approximately €48 billion, which is a stupendous amount and it does not get us off the hook as we still have a colossal debt. To put it into context, our total national debt is approximately €190 billion.
The decision to provide a blanket guarantee was a grave error. Essentially an open cheque was given to the banks and the foreign bondholders on behalf of our citizens. If we had a rational and ethical national political system, we would have negotiated with the bondholders on the basis of our ability to pay some percentage of the value of subordinated and senior bonds. Many of the shareholders at that particular time were elderly people, pensioners by and large, who had invested small amounts to cover their expenses in their old age and have a bit of a nest egg. The value of their shares was practically wiped out overnight.
As a result of the guarantee, the State was shut out of the bond market, investors lost confidence in our ability to repay our debts and we were charged exorbitant interest rates. Because of the variable interest rates applied, we do not know what will happen ultimately. If the interest rates rise, we will be screwed, to put it mildly. We are well aware that there have been large periods in history when inflation was close to zero. We are very dependent, therefore, on inflation rates rising in the next 40 years to assist us in wiping out the capital sum we eventually have to pay. The theory that has been put to us is based on voodoo economics. It is a case of live horse and get grass.
In the current situation it is very clear that austerity budgets are here to stay for some time. In late 2012, Ms Christine Lagarde and the IMF concluded it might have got its basic economics wrong. It also conceded that not alone does austerity not work, but also that it is counterproductive. Ms Lagarde realised at the time that IMF's economic model was wrong which implies that the fiscal compact to which we had signed up at that time would eventually destroy the European economy. The European Central Bank and the EU have not acknowledged the flawed monetary and banking systems that made billions of euro available. The ECB's decision to allow the Central Bank of Ireland to print €30.6 billion to give to the zombie banks was disastrous. This continuation of printing money in a borrowed situation for billions of euro just to destroy the money again is certainly immoral, unethical and irresponsible. I support the motion that these payments should cease immediately.
I commend members of the Ballyhea community on their perseverance and dedication both here at home and in Europe, which has achieved a colossal amount. I also commend the other groups present, including those from Killarney and Tralee - closer to home for me - on their dedication in giving up their time voluntarily to highlight this issue.
I signed this motion, which is a simple one, and as Deputy Maureen O'Sullivan said, it is civilised. I have a patience limit and it is coming near to the end. I am saddened by the absence of a senior Minister from the finance area or even the Taoiseach, because this is important for the people. There is a major disconnect between the phoniness of the words and discussions that are going on in a meaningless noise and the reality of what is happening on the ground in families and businesses.
There is a total disconnect.
Yesterday on the Order of Business I asked the Taoiseach to inform himself by reading The Price of Inequality by Joseph E. Stiglitz and he dismissed it by saying that these economists are 100 to 1,000, that they are all the same. They are not. There are some people who are worth discovering because they have the authority of vast knowledge and study, contemporary and historical. They have something to offer and they are articulate. I bought the book for him today and by the kindness of the Government Chief Whip I hope it is now on his desk. I added an exhortation that while I know he carries heavy responsibilities I think he will find the book helpful.
Hedge fund managers could not believe what happened between 2008 and 2010 when we borrowed, as a nation, through the banking system to pay bond speculators. They said it was absurd. I was elected to this House after taking part in the analysis and research needed to find out what exactly the position was for the banks. There were losses of €100 billion in six Irish banks that was being denied and some people put their heads in the sand and did not want to know. For two years that cost us the ability to get a handle on the problem. Time went by, bondholders were paid and the ECB and the Central Bank of Ireland lent the money on foot of a contrived promissory note for a total of €31 billion. That is odious debt, the losses of the private banking system. We talk about money following the patient in the health service but in this instance private bank losses are made to follow the innocent citizens today and into the future. It is absurd. I am embarrassed by it.
I paid for myself to go as part of a parliamentary delegation to the finance committee in the Bundestag in Germany. I was embarrassed there by the deferential timidity of my colleagues here who were afraid to tell the truth. It was unbelievable. The Chairperson of the Bundestag finance committee was startled when I explained that if the German people were asked to bear the equivalent of €75 billion on the German scale, which would be €1.2 trillion, they would not believe it. The Chairman of the Oireachtas Joint Committee on Finance, Public Expenditure and Reform, asked me to tone down my comments and not to tell them because we are the good boys. It is pathetic.
I am not saying we should have a war. After World War Two, in 1953, Germany’s creditors said, without even being asked, that they must help these people because they are living in rubble, they are orphans and they are damaged. They helped the Germans. They do not want to see what is happening here. They do not want to see an Aviva Stadium full of elderly people with no medical cards, who cannot go to hospitals or doctors and get their medicine. One has to visualise the Aviva Stadium full of people rather than say 45,000. One has to visualise two Croke Parks full of young people who are in Australia, New Zealand, Canada and so on. It is embarrassing. I did not want to be among cowards when I joined this House. I want people to be authentic and passionate about the people of Ireland. Deputies should forget the jerseys of Fianna Fáil, Fine Gael, Labour or whatever, take the badges off and work for the people of Ireland.
I thank the Technical Group for allowing me some of its speaking time. I also compliment Deputy Joan Collins and acknowledge her power in having the courage of her convictions and going to court in the past days and weeks. I compliment her in a special way for that and greatly appreciate and admire her for it. That should be acknowledged.
I also thank the ordinariness of this Private Members’ motion because it is concerned with common sense. As I am privileged to have some speaking time tonight I want to think of the people who bought houses at the height of the boom, who borrowed hundreds of thousands of euros, on average from €280,000 to €400,000 to build their homes. They are saddled with that debt. They are trying to raise young families, send them out to school, to keep cars going, to pay their taxes, pay for the tax, insurance and petrol for the cars, their groceries and every week to keep aside this massive sum of money to pay off the mortgage on the house that is not worth a quarter of what they paid for it.
They are fine respectable people who have only so much time on this earth. They are being denied the smallest of luxuries, ordinary things like going away for a weekend or taking their children out for an evening or for a day away somewhere and spending a couple of euro. They do not have a couple of spare euro because they are saddled with a massive mortgage. Why for God’s sake will the banks not engage in a pro-active way? If a couple is struggling to pay €1,200 a month why will the bank not tell them €500 or €600 is a more acceptable sum of money, that they can manage to pay that amount and continue to live their life, and park the rest of the debt? I am not saying that it should be written off or forgotten about but there is debt forgiveness for everybody except the people who did not create the problem in the first place. They are the fine respectable people who are keeping this country going but their lives are being made a misery because of the banks’ total inability to deal with them humanely. That is all we are asking.
The Minister of State at the Department of Arts, Heritage and Gaeltacht Affairs, Deputy McGinley, is a decent, respectable man who has been in this House for a long time. I admire him, and the killing thing is that he knows that what I am saying and what Deputy Mathews and others have said is the truth. He knows we are not blackguards and neither is he but the banks are blackguarding the people. Who owns the banks? The Minister of State owns them. The Leas-Cheann Comhairle owns them. Everyone here owns them The people who work in factories, the county council worker who will go out tomorrow morning with his shovel, all own our banks but our banks are not treating the people with respect. They should and the Minister of State knows that. They are a disgrace. I compliment the people in Killarney, Tralee, Ballyhea and Charleville who, week in week out, in bad weather, came out and stood up for what they believe in. If a gambler takes a punt in a bookie’s shop and loses, he throws his slip on the ground but we are paying these unsecured bondholders, these faceless, nameless people. We are paying them back and they should be burnt before our own people are burnt.
Ireland will exit from the troika programme without a precautionary credit line on 15 December. This Government has worked tirelessly to pave the way for a full return to funding from financial markets. Our ultimate objective is to exit the troika programme and regain our economic sovereignty. This will be achieved. Some of the debate over the course of last night and again tonight, has attempted to suggest that this Government has not made any attempt to alleviate the burden of the banking debt on the Irish taxpayer. That is not the case.
The Government has fought hard to ensure that the unfair burden of this debt, taken on by the people of Ireland, has been at the top of the agenda in our discussions with our European and international partners. It has been through this tireless pursuit that the Government has managed to achieve so many of the agreements that have delivered real savings and improvements for the taxpayer; agreements such as the promissory note arrangement, the reduction in the interest rates on our programme borrowings and the extension of maturities on our European Financial Stability Facility, EFSF, and European Financial Stabilisation Mechanism, EFSM, loans.
Some Members have suggested that the Government did not push hard enough in the February agreement on the promissory notes but reaching such a solution was not easy. This solution took months of tough negotiations both at ministerial and official level. Every opportunity was taken by this Government to place the matter at the top of the agenda to alleviate the unfair burden imposed by the promissory notes.
It was clear to the Government in conducting these discussions that a write-off from our obligation to repay these debts was never a realistic possibility. The agreement reached represents the culmination of months of hard work and tough negotiations. We are certain that it represents the best deal that was achievable. This view is shared by many market commentators.
I would also like to address a comment made by Deputy Fleming last night. It was suggested that when the arrangements were entered into in February, this was the first time that the debt associated with the promissory notes was copper-fastened on the backs of the Irish people. This is a fantastical statement. The reality is that the commitments entered into by the Fianna Fáil-led Government through the promissory notes were immediately recorded onto the general Government debt of the State when they were issued in 2010 and became an obligation of the Irish State at that time. The burden this commitment placed on the Irish taxpayer was something that this Government had to address as soon as we took office.
The markets reacted positively to the restructuring and we witnessed an immediate decline in bond yields. Bonds yields are now as low as 3.5% on ten year bonds, enabling the State, banks and businesses to reduce their cost of borrowings. This has helped restore our economy and create jobs. The employment figures published yesterday showed that 58,000 new jobs were created in the State this year. Unemployment has fallen to 12.8%, the lowest figure since 2009. Our policies are beginning to show their positive effects on the economy.
This motion would erase all the good work that has been done this year. Despite comments to the contrary, the simple fact is that a cessation of payment of interest on sovereign bonds is considered a default. It would undoubtedly bring with it substantial threats to our international reputation, a reputation which has taken an extraordinary amount of work to repair since we took office two-and-a-half years ago
Co-operation with our European partners has been instrumental in achieving the turnaround in the economy that we are finally seeing. Unemployment is down, consumer confidence is up and the cost of borrowing has been reduced. We have met all the targets set by the troika and successfully exited the programme. We will continue to work to get the best financing deal possible for Ireland. We believe in this approach. It has worked. It continues to work and it has put us back on the right track. Let us stay on it.
I call Deputy Shane Ross who is sharing time with Deputies Joe Higgins and Luke 'Ming' Flanagan.
I wish to point out something particularly significant in this motion, that is, that the entire Technical Group with its extraordinary differences of approach to the economy and to matters such as this has united behind this motion and it has attracted the support of other Independents as well. Their reasons may be very different but they believe that the taking on and the shouldering of this debt is wrong. Those on the left, I suspect, sincerely believe it is wrong for ideological reasons, that it has nothing to do with the Irish people. They rightly believe that it was incurred by a few people who had no responsibility and with whom they do not wish to associate and have never wished to associate. Those who believe in the free market - I was struck by what Deputy Peter Mathews said and he is right - also believe that it is crackers to be paying back this amount of money. As Deputy Mathews correctly said, they believe that those who live by the sword should die by the sword. I have said this before in the House. At the time that this was happening, I met a large number of fund managers, some of whom were bond holders, and they could not believe it. This was a sucker nation. They expected to be burnt. They expected us not to pay it back and they would not have given a hoot about it. They would have come back for more if they had thought it was good value several weeks later. That is the way the markets work.
Instead of listening to the people of Ireland and instead of adhering to what the fund managers expected, we listened to Mr. Trichet. I remember speaking, as did many others in this House, to the former Minister for Finance, the late Brian Lenihan, who made no secret of the fact that he suggested informally that we should not honour this so-called debt and he was told by Mr. Trichet to take that idea off the table or all bets would be off. That type of craven attitude, unfortunately, has left us in the situation we are in now because the bondholders would have accepted it. The capitalist markets understand that this is how things work but for some reason this and the last Government refused even to go to them and eyeball them and say they were not paying this or that they were not paying some of it. That was the wrong attitude. The markets would have understood and the bondholders would have expected to have been burnt. It was an appalling decision for several reasons. That is why left and right and centre, and market-led people, are united on that today.
We should ask the question that those great people from Ballyhea are asking tonight. Why is it not our debt? We accept that the Government and the last Government have some responsibility. We accept that our banks were not regulated properly. We accept that the regulator was at fault. We accept that the developers were at fault. We accept too, maybe, that the borrowers were at fault, the banks here who did it, but we do not accept that the lenders were blameless in this particular matter. The Government is negotiating or putting forward what it calls insolvency agreements on a micro scale to allow borrower and lender to come to a settlement on the basis that both parties in this particular operation have a shared responsibility for what happened. That is the same in this case because there was reckless borrowing. The activities of the banks here were unforgivable but the activities of those who lent to them were reckless too and they should pay a price.
As a result of this motion we should look as part of the recapitalisation and the stress test happening next year for an overall settlement. The motion does not say "default" - it calls on the Government to immediately lobby the ECB for a one-off exemption - and is careful in its wording. We should look for a final settlement when next year we will be forced to recapitalise the banks, regardless of what the Government says about legacy debt which will not happen, out of the ESM. We should go forward and say we want an overall settlement which will include those matters referred to in the motion. After the stress tests we should look for that settlement and take heed of what has been done today and we should applaud those people outside the gates this evening for the great service they have done to the Irish people and the example they have shown to us.
This is the mildest of motions. It merely asks the Government to talk to the European Central Bank, to negate the €28 billion debt with which that bank in connivance with two treacherous governments, this and the previous one, saddled the Irish people in order to bail out bankers and bondholders from the fruit of their greed-driven speculation in Irish property. Yet even this mild motion is too much for the Fine Gael-Labour coalition which places itself in perpetual prostration at the altar of the financial markets of European capitalism, the Government which allows the sharks who infest those financial markets to dictate how a country and a continent should be run, an economic dictatorship dictating to the supposedly democratically elected governments of this country and of Europe. Last February, the Government in rushing through legislation standing down the former Anglo Irish Bank did nothing more than saddle generations yet to be born with the private debts of the speculators in the financial markets. The fruits of bailing out these speculators are bitter without exception.
Bitter is the austerity agenda. Austerity is the weapon of choice to secure the transfusion of the lifeblood of our people, of the Greek, Spanish and Portuguese people, and of other peoples to the private hedge funds and international financial institutions.
The Government should listen to the voice of that most sober and conservative institution, the International Committee of the Red Cross. In a recent report, it outlined a damning indictment of this Government and all the governments of the EU establishment:
Five years ago it would have been unimaginable; so many millions of Europeans lining up for food in soup kitchens, receiving food parcels at home or being referred to social groceries (shops where they can buy food at highly reduced prices after being referred by social authorities). Former middle class citizens living in trailers, tents, railway stations or in shelters for the homeless, hesitating to go to the Red Cross Red Crescent and other organizations to ask for help.
The report says, "there are now more than 18 million people receiving EU-funded food aid, 43 million who do not get enough to eat each day and 120 million at risk of poverty in the countries covered by Eurostat". That shameful situation is a result of austerity and undertaking debts that are not of the people. Austerity is not a necessity. It is a policy choice to save European capitalism and its financial speculators from the chaos of their profit-driven, greed-driven system. Labour and Fine Gael stand with the speculators of that system and against the people.
I note the perseverance of the people of Ballyhea and the anger at the unjust burdens foisted on our people. A government of and for working class people in this country might ask the ECB to stand down the Anglo Irish Bank debts, but on inevitable refusal, it would simply tear up the unjust covenants and agreements that foisted that debt on our people and the incredible €8 billion to €9 billion per year in interest alone on that and the other debts that have been put on top of our people. Such a Government of working people would launch a European movement standing with the working class of Greece, Spain, Portugal and other countries to take the financial markets, hedge funds and financial institutions into democratic public control and channel those funds for investment for our people for the creation of millions of jobs and, on that basis, begin to rebuild a society not on the basis of this failed, diseased system of European capitalism but on the basis of solidarity between peoples, genuine real democracy and socialism.
As Diarmuid O'Flynn, a hero and human being - it is good to see there are a few left - noted, for 143 weeks, Ballyhea Says No has been marching in protest against the imposition of the bank debt burden on the Irish people. The most odious element of that debt is the promissory note of €31 billion. In our dealings with the various layers of the EU, the European Council, the European Commission, the ECB and the EU itself, we have met initial strong resistance to offering Ireland a break on this bank debt. We have been told repeatedly that these were our banks, this was our regulator, these were our politicians and developers and this is our problem.
The one area where they cannot make any of those claims is the promissory notes. By 2010, the true picture of the catastrophic nature of what was happening across Europe had emerged and the EU and the ECB had become centrally involved. The ECB could have refused to allow the Central Bank to print that €31 billion to bail out the two zombie banks. Due to its fear of contagion, it did not do this. It made the final decision to allow that promissory note of €31 billion to be printed and the ultimate responsibility lies with it. Forget for a moment the legal question of emergency liquidity assistance to fund the issue of the €31 billion. The bigger issue is why the Irish people should be held accountable for all of that €31 billion plus interest. Why are future generations of Irish people being forced into at least 40 years of debt slavery to pay the principal and interest on this €31 billion when not one cent of it was used for the benefit of the Irish people - not a single hospital bed or classroom or metre of badly needed motorway, nothing. Quite simply, this is not our debt.
We could have been and are entitled to be far more demanding with this motion but we have not been. I will make a few pertinent points. The motion is not seeking unilateral default. It is merely asking the Government at least to ask the ECB to allow the Central Bank to destroy those promissory note bonds. This was not money borrowed to close our budget deficit. It was money printed to bail out banks, bankers, bondholders, international institutional investors, the eurozone and the euro. Burning those bonds would only have a positive impact on the markets and reduce our national debt. The ECB is hiding behind its own rules. These are the same rules it bent and twisted to allow the €31 billion to be printed in the first place.
This Government is long on talk of restoring Ireland's reputation in Europe. We would also like to see that, not the fawning lap dog reputation we have developed lately but the Irish reputation of the Wild Geese - Irish brigades renowned for their courage and fighting spirit in the armies of France and Spain and even further afield in the US and Mexico. In real life, Diarmuid O'Flynn is a sports journalist. He spoke of how, like most other Irish people, he had mixed emotions as he watched the Irish rugby team lose at the death to the all-conquering All Blacks last Sunday. He spoke of how he felt bitter disappointment but also massive pride at how the Irish players had fronted up in a game which people spoke about as an annihilation. Afterwards, the New Zealand coach, Steve Hansen, said, "we expected them to be tough. Every time we play them, they're tough but sometimes I don't know if they believe that they're as tough as they are". This is the only Ireland we know - the Ireland of hard battles on the GAA and soccer fields and in international arenas with our boxers or rugby players, our women and our men.
Ireland never played tough in dealing with the EU and the ECB in respect of the promissory note and never fronted up. A walkover was conceded. Now we are in the ironic position where the very people bailed out by the original €31 billion promissory note will be bidding for these new promissory note bonds. This Government is itself governed by fear. It speaks of making tough decisions. There was nothing tough about taking on the sick, the infirm, the elderly and the disabled and about cutting health, education, the Garda, etc. Taking on the multinationals by introducing a minimal level of corporation tax, taking on the IFSC by adopting the financial transactions tax, taking on its own exorbitant salaries and expenses and thus setting an example and taking on the ECB itself were the tough decisions but the Government has baulked at them all, more concerned about its new friends in the markets and its new partners in Europe than it is about its own people. They might be the Government's partners. In fact, they are its partners as it imposes their demands on the Irish people. We see them as people who, if they had their way, would be our masters. They will not be. We now know why the Government will not even ask that these promissory note bonds be destroyed and, yes, it is because of fear - not the fear of being told "No" but the fear of being told "Yes" and being exposed for its incompetence and cowardice. I commend the motion to the House.
Amendment put:
The Dáil divided: Tá, 77; Níl, 41.
Tá
- Bannon, James.
- Barry, Tom.
- Breen, Pat.
- Bruton, Richard.
- Burton, Joan.
- Butler, Ray.
- Buttimer, Jerry.
- Byrne, Catherine.
- Byrne, Eric.
- Cannon, Ciarán.
- Carey, Joe.
- Coffey, Paudie.
- Collins, Áine.
- Conaghan, Michael.
- Conlan, Seán.
- Connaughton, Paul J.
- Conway, Ciara.
- Corcoran Kennedy, Marcella.
- Coveney, Simon.
- Creed, Michael.
- Daly, Jim.
- Deasy, John.
- Deenihan, Jimmy.
- Deering, Pat.
- Dowds, Robert.
- Doyle, Andrew.
- English, Damien.
- Farrell, Alan.
- Feighan, Frank.
- Fitzpatrick, Peter.
- Flanagan, Charles.
- Griffin, Brendan.
- Hannigan, Dominic.
- Harrington, Noel.
- Harris, Simon.
- Hayes, Brian.
- Hayes, Tom.
- Heydon, Martin.
- Humphreys, Heather.
- Humphreys, Kevin.
- Keating, Derek.
- Kenny, Seán.
- Kyne, Seán.
- Lynch, Ciarán.
- Lyons, John.
- McCarthy, Michael.
- McEntee, Helen.
- McGinley, Dinny.
- McHugh, Joe.
- McLoughlin, Tony.
- McNamara, Michael.
- Maloney, Eamonn.
- Mitchell, Olivia.
- Mulherin, Michelle.
- Murphy, Dara.
- Murphy, Eoghan.
- Nash, Gerald.
- Neville, Dan.
- Nolan, Derek.
- Noonan, Michael.
- Ó Ríordáin, Aodhán.
- O'Donnell, Kieran.
- O'Donovan, Patrick.
- O'Reilly, Joe.
- O'Sullivan, Jan.
- Phelan, Ann.
- Phelan, John Paul.
- Ring, Michael.
- Ryan, Brendan.
- Spring, Arthur.
- Stagg, Emmet.
- Stanton, David.
- Tuffy, Joanna.
- Varadkar, Leo.
- Wall, Jack.
- Walsh, Brian.
- White, Alex.
Níl
- Boyd Barrett, Richard.
- Broughan, Thomas P.
- Browne, John.
- Calleary, Dara.
- Collins, Joan.
- Collins, Niall.
- Colreavy, Michael.
- Cowen, Barry.
- Crowe, Seán.
- Daly, Clare.
- Doherty, Pearse.
- Donnelly, Stephen S.
- Ellis, Dessie.
- Ferris, Martin.
- Flanagan, Luke 'Ming'.
- Fleming, Sean.
- Fleming, Tom.
- Grealish, Noel.
- Healy-Rae, Michael.
- Higgins, Joe.
- Kelleher, Billy.
- Kirk, Seamus.
- Mac Lochlainn, Pádraig.
- McGrath, Finian.
- McGrath, Mattie.
- McGrath, Michael.
- McGuinness, John.
- McLellan, Sandra.
- Mathews, Peter.
- Murphy, Catherine.
- Nulty, Patrick.
- Ó Caoláin, Caoimhghín.
- Ó Fearghaíl, Seán.
- Ó Snodaigh, Aengus.
- O'Brien, Jonathan.
- O'Sullivan, Maureen.
- Ross, Shane.
- Shortall, Róisín.
- Smith, Brendan.
- Tóibín, Peadar.
- Wallace, Mick.
Tellers: Tá, Deputies Joe Carey and Emmet Stagg; Níl, Deputies Catherine Murphy and Luke 'Ming' Flanagan.
Amendment declared carried.
Question put: "That the motion, as amended, be agreed to."
The Dáil divided: Tá, 76; Níl, 41.
Tá
- Bannon, James.
- Barry, Tom.
- Breen, Pat.
- Bruton, Richard.
- Burton, Joan.
- Butler, Ray.
- Buttimer, Jerry.
- Byrne, Catherine.
- Byrne, Eric.
- Cannon, Ciarán.
- Carey, Joe.
- Coffey, Paudie.
- Collins, Áine.
- Conaghan, Michael.
- Conlan, Seán.
- Connaughton, Paul J.
- Conway, Ciara.
- Corcoran Kennedy, Marcella.
- Coveney, Simon.
- Creed, Michael.
- Daly, Jim.
- Deasy, John.
- Deenihan, Jimmy.
- Deering, Pat.
- Dowds, Robert.
- Doyle, Andrew.
- English, Damien.
- Farrell, Alan.
- Feighan, Frank.
- Fitzpatrick, Peter.
- Flanagan, Charles.
- Griffin, Brendan.
- Hannigan, Dominic.
- Harrington, Noel.
- Harris, Simon.
- Hayes, Brian.
- Hayes, Tom.
- Heydon, Martin.
- Humphreys, Heather.
- Humphreys, Kevin.
- Keating, Derek.
- Kenny, Seán.
- Kyne, Seán.
- Lynch, Ciarán.
- Lyons, John.
- McCarthy, Michael.
- McEntee, Helen.
- McGinley, Dinny.
- McHugh, Joe.
- McLoughlin, Tony.
- McNamara, Michael.
- Maloney, Eamonn.
- Mitchell, Olivia.
- Mulherin, Michelle.
- Murphy, Dara.
- Murphy, Eoghan.
- Nash, Gerald.
- Neville, Dan.
- Nolan, Derek.
- Noonan, Michael.
- Ó Ríordáin, Aodhán.
- O'Donnell, Kieran.
- O'Donovan, Patrick.
- O'Reilly, Joe.
- O'Sullivan, Jan.
- Phelan, Ann.
- Phelan, John Paul.
- Ring, Michael.
- Ryan, Brendan.
- Spring, Arthur.
- Stagg, Emmet.
- Stanton, David.
- Varadkar, Leo.
- Wall, Jack.
- Walsh, Brian.
- White, Alex.
Níl
- Boyd Barrett, Richard.
- Broughan, Thomas P.
- Browne, John.
- Calleary, Dara.
- Collins, Joan.
- Collins, Niall.
- Colreavy, Michael.
- Cowen, Barry.
- Crowe, Seán.
- Daly, Clare.
- Doherty, Pearse.
- Donnelly, Stephen S.
- Ellis, Dessie.
- Ferris, Martin.
- Flanagan, Luke 'Ming'.
- Fleming, Sean.
- Fleming, Tom.
- Grealish, Noel.
- Healy-Rae, Michael.
- Higgins, Joe.
- Kelleher, Billy.
- Kirk, Seamus.
- Mac Lochlainn, Pádraig.
- McGrath, Finian.
- McGrath, Mattie.
- McGrath, Michael.
- McGuinness, John.
- McLellan, Sandra.
- Mathews, Peter.
- Murphy, Catherine.
- Nulty, Patrick.
- Ó Caoláin, Caoimhghín.
- Ó Fearghaíl, Seán.
- Ó Snodaigh, Aengus.
- O'Brien, Jonathan.
- O'Sullivan, Maureen.
- Ross, Shane.
- Shortall, Róisín.
- Smith, Brendan.
- Tóibín, Peadar.
- Wallace, Mick.
Tellers: Tá, Deputies Joe Carey and Emmet Stagg; Níl, Deputies Catherine Murphy and Luke 'Ming' Flanagan.
Question declared carried.