Leaders' Questions

Today, 1 July, is the deadline for the banks to get back to the Minister for Finance, Deputy Noonan, on the provision of reductions for variable rate mortgages. The Taoiseach must accept that the Minister's initiative has been somewhat of a flop because only two of the six lenders have made minor reductions to their standard variable rate mortgages and one of those was made before the meeting with the Minister.

There are more than 300,000 variable rate mortgage customers in this country paying an average 2% more than the average European customer. There are also 46,000 mortgage holders who are outside the banking system, who have mortgages with vulture funds who bought up their loans and who have absolutely no protection whatsoever. Those people are particularly vulnerable. This is a massive issue in households throughout the country. It is about money in people’s pockets. What is happening at the moment can only be described as a massive rip-off. The rates that are being charged cannot be justified, based on evidence from the banks themselves to the Oireachtas committees. I put it to the Taoiseach that an existing customer with 20 years remaining on a €200,000 mortgage at a rate of 4.5% is paying €992 more than someone availing of a new mortgage, and €3,874 more than someone on a tracker rate. Those are extraordinary variations. They are huge sums of money that matter to thousands of families throughout the country.

Nothing has been done about it. By any yardstick, the Minister’s initiative has been a flop. We have put forward legislative proposals, through Deputy Michael McGrath’s Bill, that are reasonable and balanced and, if adopted, would give capacity to the Central Bank, first, to examine whether there is market failure and then to give directions to the Central Bank to intervene to ensure fairness, equity and, above all, a reduction in the rip-off that is taking place in the context of variable rate mortgages. Does the Taoiseach accept that the Minister’s initiative has been a failure? Will he provide time for debate and accept the Bill that has been published and moved on Second Stage by Deputy Michael McGrath, which would bring a legislative response to this issue, one that the Government has neglected for a number of years?

I agree this is a serious matter for a great number of people. That is why the Government made the recent changes. I do not agree that the Minister’s initiative has been a failure. Today is the first day he set for consideration by the banks. The Minister already notified the Central Bank that if it required legislation to intervene, he would do so to give it the authority. It did not seek that authority. He held a series of meetings with the six banks. They focused on the comparatively high standard variable rates currently being applied by the banks, as in the case to which Deputy Martin referred of a €200,000 loan over 20 years at 4.5%. The banks agreed to review their rates and their products and to have simple options to reduce monthly payments for standard variable rate customers. Some of the potential products include lower standard variable rates for existing and new customers, competitive fixed-rate products, and lower variable rates taking account of loan to value for new and existing customers.

Officials in the Department of Finance have been mandated to review progress in the coming weeks and to set up a number of follow-up meetings between the Minister and the banks in order that they follow through on what they said. Some institutions have announced reduced standard variable rates, which is welcome, while others have offered customers reduced fixed-rate options as a method of reducing monthly repayments. That is the customer’s choice. In recent weeks we have also seen increased competition in the switcher market, which I welcome. That was not available previously. Institutions are offering customers reduced rates and incentives to attract them, which is welcome. The increased range of products already announced by the banks have increased competition in the marketplace, which is also welcome. The Government has always been of the view that an increased level of competition is in the customer’s interest. Officials are following up on what the banks said they would do. I expect there will be further meetings arising from that, and I do not accept that the initiative taken by the Minister, Deputy Noonan, has been a failure. I view it as a work in progress.

We have debated the legislation to which Deputy Martin referred and I do not see it as being pertinent just now. I have outlined the progress made by the Government. We have seen progress on the part of AIB, Bank of Ireland and KBC, all announcing new products for existing customers that will see mortgage rates reduced to less than 4% for customers, which is in the interests of customers.

There are times when I genuinely do not know what planet the Taoiseach is living on.

The same one as Deputy Martin.

To be frank, the banks have told the Government where to go, and they have told the Minister where to go. Only two banks have responded. AIB made a reduction of 0.25%, a very minor reduction. The reduction announced by KBC was very convoluted and even more minor again in terms of its impact. Bank of Ireland has not reduced the SV rate. It has left it untouched. Ulster Bank has not responded in any shape or form. The Taoiseach said today was the first day by which a response should be made but it was the final date for the banks to get back to the Minister with meaningful proposals and responses to the standard variable rate issue.

The Taoiseach said in response to a question from me in April that from any moral or ethical point of view, when banks are now restructured and on their way to making a profit again, it is just not acceptable that when they themselves can borrow at much cheaper rates, they continue to have higher rates applied to mortgage holders. That is exactly what is going on right now. We know from all the evidence to the Oireachtas committee that the cost of funds is far lower than what the banks are charging the standard variable rate mortgage customer. It is a shocking rip-off. What the Taoiseach has proposed today is more inertia, as has been the case for years. It is not a question of whether the Central Bank wants the legislation. It is the Oireachtas that must do something about the situation because the sums of money are enormous for the households that are affected. The situation is much more significant than the combined effect of property tax and water charges in terms of the sums of money that have been gouged out of hundreds of thousands of families by unacceptable behaviour by the banks. According to the Taoiseach’s own words, the situation is unacceptable from an ethical and moral point of view. In April, the Tánaiste said gratitude would only get one so far with the banks, and that she had never known bankers to be an especially grateful sort of people.

Could Deputy Martin ask a question please?

What will be done about the situation? We have endeavoured to be constructive. Deputy Michael McGrath has produced well-researched legislation. A legislative response is required. At a very minimum, the 46,000 households whose loans have been bought up by vulture funds are extraordinarily vulnerable to arbitrary hikes in rates. Does the Taoiseach accept that legislation is required? I do not know by what criteria the Taoiseach would judge the Minister’s initiative as being a success or what timeframe he is now setting out. He said the officials would follow up on what the banks have undertaken to do. How long will the process last? Does the Taoiseach not accept that legislation is required to bring fairness between existing customers and new customers, for example?

All the Taoiseach announced were marketing and promotional approaches by the banks. They do not deal with the core issue of how existing customers are being screwed and ripped off. This is the key point and it is unacceptable.

I live on the same planet as the Deputy and work in the same building as he worked in when he was a Minister in a Government that allowed the banks to do as they liked and wrecked our economy.

I do not accept from the Deputy, or anybody else, that the Minister for Finance, Deputy Noonan, has not taken the problem by the scruff of the neck.

Where are the results?

Tell it to the young couples.

The changes that have been made in restructuring and recapitalising banks and making arrangements for the taxpayers to get back all their money is markedly different from the situation Fianna Fáil left when its Government ended.

I accept that 300,000 people paying variable mortgage rates that are above the rate at which banks are borrowing is not a morally justifiable situation.

What is the Taoiseach going to do about it?

This is why the Minister, Deputy Noonan, met each of the six banks and gave them a piece of his mind about what they should do.

When the Taoiseach wanted to get rid of the Garda Commissioner, he left him in no doubt. Why does he not send in the Secretary General?

KBC, Bank of Ireland and AIB have introduced measures to reduce variable rates below 4%. The Minister’s officials are monitoring the progress of what the banks said they would do to see the outcome of it. The October budget will be an opportunity for the Minister to deal with the banks if necessary.

Deputy Martin does not seem to understand that the Central Bank is an independent regulator.

The Taoiseach does not understand.

He has no respect.

He wants the Government to direct everybody in this democracy.

The Taoiseach was not long moving the Garda Commissioner when it suited him. He should put half as much effort into dealing with the banks.

The Minister wrote to the Central Bank some time ago and said if it required the legislative authority to intervene he would provide it by way of legislation.

Are you not the Taoiseach?

He got rid of the Minister for Health too.

The Taoiseach has the power to initiate legislation.

The Central Bank did not take up the offer. Time is moving on.

It is, for the borrowers.

Deputy Dooley's Government, which he supported, left them in some mess. He has some neck.

Every day, people come to me about variable mortgage interest rates and the pressure they are under. This is why the entire suite of measures put in place by the Government is designed to alleviate it. I expect the banks to reduce their variable mortgage interest rates, which are unfair on so many. The Minister has given them a warning, and I expect them to respond.

Does the Taoiseach accept that the debt crisis in Greece is about EU elites trying to force the Government of Greece into accepting an outcome that contravenes its electoral mandate? They want to Greek Government to do what Fine Gael and the Labour Party did. They tore up their mandate, reneged on their election promises and undermined the people's right to assert democratic control over decisions which affect our lives.

We saved the country €30 billion.

This is the major question facing all EU citizens, including Irish citizens. Do citizens have the right to assert democratic control over decisions that affect our lives? The Taoiseach clearly does not believe so. This is at the heart of the crisis in Greece and is also a major issue here. This is why it does not suit the Taoiseach to have a government in Greece that proposes alternatives to the austerity policies which have increased inequality in many EU states, including Ireland. The water charges, a Fianna Fáil idea, to give it credit, is part of this, as is forced emigration, inequality, child poverty, a low-wage economy, the lack of social housing and the run-down of public services.

Is Deputy Adams an expert in equality?

The Minister for Health, Deputy Varadkar, has admitted the health service needs another €1 billion just to meet existing demand. Will the Taoiseach supply this? Of course he will not. However, he will impose the repayment of €181 billion in debt created by his friends in the golden circle and the greed of the elites at the expense of Irish people for generations to come. The Minister of State, Deputy Kathleen Lynch, admits that there are not enough hospital beds to cater for ill citizens, which we have always known.

I have been saying it for the past four years.

Will the Taoiseach accept that this is the price he is forcing our people to pay, and expects the people of Greece to pay, because he kowtows to a right-wing ideology and is, shamefully, uncritical and subservient to Brussels?

Deputy Adams's great idea was to send them home, and their money with them.

I profoundly disagree with the Deputy’s comments. The situation is as I outlined yesterday. The democratically elected Prime Minister of Greece has come to the European Council on a number of occasions during recent weeks and has outlined, both for the European Council and the leaders of the eurozone, his vision for his country, as he is entitled to do. He said, in respect of generating social consent in Greece, that he has to deal with corruption, structural changes, an infrastructure package, becoming competitive and implementing a taxation system that works. The party sent a member to Sinn Féin's conference in Derry, indicating where Sinn Féin is headed in respect of delivering for Ireland. I profoundly disagree with it. I would not expect the citizens of this country would have anything to do with a situation such as that which, unfortunately, obtains in Greece. We have great empathy with the people who are struggling outside closed banks.

The Taoiseach has no empathy.

He would throw them under a bus.

The Greek Government is entitled to call a referendum and allow the people to decide on what the question might be. Unfortunately, the deal was not on the table to be part of the referendum.

That is because the Taoiseach whipped it off the table.

Papers have been exchanged and there will be a further conference call with the Ministers for Finance of the eurozone at 4.30 p.m. and, perhaps, progress might be made. Politicians in Greece have commented that the referendum may not be held. If it is held, it must be a question of whether the citizens of Greece wish to remain part of the EU and eurozone.

This is bullying.

They want bread on the table.

Apparently, it is the case. Unfortunately, the negotiators at Saturday's eurozone meeting were called away abruptly without concluding the debates. Deputy Adams has experience of what it means to do that and also knows from experience that the place to settle such differences is at the table. I am glad there has been movement from the Greek Government and that there is a reciprocal acceptance of consideration of what they are taking about. The overriding issue is for the Greek Government to tell its citizens the referendum is to take place on Sunday. Who knows what may happen with the current discussions with the eurozone Ministers for Finance later this afternoon and, possibly, later this week. It is a state of considerable flux. The ordinary people of Greece are suffering great hardship due to the failure to negotiate politically.

They have been suffering for seven years.

The institutions and leaders of the EU and the eurozone are more than willing to support, in whatever way possible, the citizens of Greece so they can realise their aspiration of being part of the eurozone, getting out of the recession and introducing the changes about which the Prime Minister spoke eloquently at the meeting in Brussels on Friday and on the previous Monday.

I asked whether citizens had the right to assert democratic control over decisions which affect our lives, and the Taoiseach dodged the question and gave us his usual Rambles in Éirinn type of non-answer. The Greek Government is negotiating, but how would the Taoiseach know? It is doing something he never did, namely, trying to negotiate on behalf of the people who gave it a mandate.

It is going well, is it not?

I have, as the Taoiseach noted, some experience of negotiation.

How are the negotiations going?

Let us try to get to the bottom of why the Taoiseach holds to his position. The decades of corruption and economic mismanagement of Greece are the disastrous legacy of successive Governments with which the Taoiseach's Government has been closely associated.

Ideology will not solve it.

The Government which the Greek people rejected was led by New Democracy, which is a sister party of Fine Gael in the European Parliament.

The economy was growing while it was in government.

The other component of that coalition Government was Pasok, the party which implemented the original Greek bailout and a sister party of the Irish Labour Party. The two governing parties in this State are inexplicably linked to the parties in power in Greece when the problems in its economy were created as a result of corruption and a lack of regulation. Does that not sound familiar?

A question, please.

Did Fine Gael or Labour Party Members ever speak to their Greek counterparts about the disastrous policies which crashed the Greek economy? If they have not done so, is it not the case that the Taoiseach's current posturing on the new Greek Government, which has already started to implement a programme of genuine and widespread reform of the Greek economy, amounts to rank hypocrisy? Will the Taoiseach answer the fundamental question at the root of the ongoing struggles, namely, whether people have the right to assert democratic control over decisions which affect their lives?

The answer to the Deputy's last question is "Yes". In this country the people made that decision and the Government they elected will be judged on whether we fulfilled our mandate to fix the public finances and put our country back to work. That is the essence of democracy. Citizens' votes elect and change Governments, and that is their absolute right.

It is more than that.

In regard to the Deputy's comments on the negotiations, I was at the meetings on the Stormont House Agreement. Deputy Adams raised a racket, as he normally does, which is fine.

The Taoiseach certainly did not raise a racket.

He sat there like a lapdog.

Afterwards, his party's acceptance of the deal was advertised in its own literature during the election process and Deputy Adams stated that the agreement must be implemented in full. However, he subsequently decided that the agreement no longer suited him and he rejected it. I would call that rank hypocrisy.

I would call that untrue.

He was found out.

I see a coalition in the making.

The shape of the next Government is emerging.

That rank hypocrisy will be squared by the gentleman who spoke a moment ago given what he did with his friends.

The alternative.

Prime Minister Samaras brought in a primary surplus, was approaching 1% growth for Greece and was able to get back to the international markets to borrow money. What has happened now? People said they would abolish all property charges, water charges and everything else, and would pay for nothing. Now it has gone back beyond where it was. The problem is that, unfortunately, the ordinary people are now outside the closed banks and cannot withdraw money. Pensioners were told they would be able to withdraw money but they are unable to do so. They cannot get back to the international markets and the good and honourable name of Greece that was built up over the years is being torn down by the failure to negotiate. I would say to the Prime Minister in Greece that it is time to follow through on the papers that are now the subject of a conference call this evening at 4.30 p.m. There is time and a way to deal with this rather than have the 11 million citizens of that historic country done down by politics.

Three million of them are in poverty thanks to the Taoiseach's friends.

It is because of following Sinn Féin policies.

The answer to Deputy Adams's question is "Yes". People's votes decide who is elected and who is thrown out. That is the way it should be. In this case, the mandate is not achievable because of the failure of the Greek Government to sit at the table and work it out. I hope that can happen in the next few days.

In "The Godfather Part III", Don Lucchesi turns to Vincent Mancini and says:

Finance is a gun. Politics is knowing when to pull the trigger.

It is movie night.

This is real politics.

The gun of the European Central Bank is directly pointed at the Greek economy and society. It is being used to demand the ransom of a "Yes" vote on Sunday for more austerity. The Taoiseach was concerned about the queues at the ATMs but he did not care about the queues at the soup kitchens and food banks. Those queues are a result of the decision by the European Central Bank, which was called for by the Minister for Finance.

That is not what happened.

They are a result of the decision not to provide further assistance to the Greek banking system. They are a part of the campaign of financial terror that the European establishment is pursuing against the Greek people. Two days ago, the President of the European Commission, Jean-Claude Juncker, made an incredible speech which was full of lies about the deal on the table for the Greeks and which threatened the Greeks with being forced to exit the euro if they did not vote "Yes". Mr. Juncker said something which I think will resonate with many people in Ireland who voted twice on past European referendums when he told the Greeks that they had to vote "Yes" whatever question was put to them. That is European democracy. We can have as many referendums and choices as we want but we can only say "Yes" to austerity. We cannot say "No" to it.

What is the question?

Yesterday the President of the European Parliament and Angela Merkel made the same intervention. The reason they are so scared of democracy is because austerity has failed to achieve its stated aims of restoring growth and reducing debt. It has shrunk the Greek economy by one quarter and ballooned its debt to 180% of GDP. The IMF admits that the deal put on the table on a take-it-or-leave-it basis would have resulted in unsustainable debt, even with economic growth of 4%. Austerity has no popular legitimacy because it has exposed what happened to the money that went to Greece. Less than 10% of the money went into the Greek economy, with the rest going to bail out the banking system, the German and French banks and the major bondholders. That is the real purpose of austerity. The hope is that the tyranny of the troika, the financial terrorism of the ECB and the bullying by Europe's leaders will force people to vote "Yes". The Irish Government's role in this mob story is that of Fredo Corleone, meekly doing what it is told to do and enthusiastically allowing itself to be used as a stick to beat the Greek people. Does the Taoiseach agree that the bullying and the threats should stop and that the Greek people should be free to make their decision on Sunday about the austerity deal? Will he withdraw the threats he repeated today about kicking them out of the eurozone if they make the wrong decision?

Is the movie over?

Perhaps the Deputy is rehearsing the speech he will be making in Athens on Friday. I wish him luck in his travels.

Perhaps the Taoiseach could go to Greece to show solidarity.

I am glad the Deputy is following through on his convictions. I listened very carefully to what Prime Minister Tsipras said at the European Union leaders' meeting. He said that his country does not want to leave the euro and it will pay its way rather than default. He said he has to deal with corruption, infrastructure deficiencies and changing structures to make his country work, and that he needed our help. Mr. Draghi has given €87 billion in emergency liquidity to the Greek banks. Other countries, through their taxpayers, have contributed significantly to Greece and, believe me, they want to see Greece work as a democracy in order that its citizens can live the life they should expect in the European community.

However, that requires people to sit down and deal with the challenges they face. As the Greek Prime Minister said, he went to the OECD and met its personnel who were able to give him the best advice, technical and otherwise, to put in place the structures that he said were necessary for Greece to make its way forward. Believe me, there is a willingness not just to listen and respond with words but also to respond with assistance to put in place those structures to allow Greece to function as a democracy that can make its way forward, pay its way and deal over a longer period with these problems. That was accepted by the European leaders in hearing it directly from the Prime Minister, but that is not what came back from Athens later. I do not have the reasons the Greek negotiators were withdrawn, but I do know that papers are now being exchanged. The Greek Finance Minister, Mr. Varoufakis, has been talking, as have other members of the Greek Government, about whether the referendum will be held. I hope some progress can be made in the conference call which will take place today at 4.30 p.m. between the eurozone Ministers, as everybody wants to see this work. Nobody wants to have a situation where this will spiral downwards from what is beginning to happen in Greece. From our point of view, we will work with our Greek colleagues in any way we can to bring them back from the precipice. Greece is the first developed country to be in this position of arrears.

If the Taoiseach wants to respect and help his Greek colleagues and if his words of sympathy and solidarity with the Greek people mean anything, he should withdraw the threats. He should be the leader of a European country that says, "We do not believe that if the Greek people vote "No", they should be forced out of the eurozone, if that is not their wish." I believe all this talk about the Taoiseach and other European leaders being interested in negotiations is not in good faith. What happened at the negotiations? A deal was put on the table on a take-it-or-leave-it basis in the knowledge that Syriza as a whole would not be able to take it. Yesterday Mr. Paul Krugman wrote that it was, deliberately, an offer Syriza could not accept because at the same time it was negotiating with the leaders of New Democracy and Potami, The River. What the European leaders wanted was a silent coup in Greece to replace the government with something more acceptable. When a referendum was announced, however, all of a sudden they were in favour of entering negotiations again. They even raised the question of debt relief, which had been off the table. Mr. Tsipras wrote to the Taoiseach and others, saying, "Okay, let us postpone the ending of the second programme until after the referendum so that we can have negotiations." However, everyone said "No". Mr. Tsipras wrote yesterday and again today, saying he wanted a third programme. However, Chancellor Merkel replied, "No, we will not have negotiations until after the referendum." That is because they want Syriza to be defeated in the referendum to get rid of the problematic issue of democracy and replace it with a government that will do exactly what they want.

The role of the Irish Government in all of this has been absolutely shameful. It is being used as a stick with which to beat the people of Greece and Ireland and it does so consciously against the interests of people here. It is shameful that today the Ballyhea bondholder bailout protestors are in Brussels making a case for a debt write-down for the Irish people. Meanwhile, the Taoiseach is saying nobody needs a debt write-down, that everyone should pay their debts, unless they are among the richest people in the country.

A question, please.

Shame on the Taoiseach. Where is the June 2012 agreement? It has been completely forgotten. The Greek people should not be bullied. The Irish Government does not speak for the people here.

Does the Deputy?

The Deputy is arrogant.

We, too, say "Oxi" or "No" to the troika's tyranny and austerity. We stand alongside the Greek people in a fight for a Europe that will work in the interests of millions, not millionaires.

I am interested in the Deputy's analysis that there is a threat to drive Greece out of the eurozone.

That is what the Taoiseach said.

The Taoiseach said it.

Deputy Paul Murphy understands there is no mechanism to exit the eurozone, that a country would have to request to leave. Therefore, his analysis that there is a threat from this country or anybody else is absolutely baseless. The position is that Greece is in arrears in meeting its debts to the IMF. There is, obviously, a serious problem that is affecting millions of people in that country. As the Deputy has often asked here, why have others tell us what to do? The Greek Prime Minister is saying, "I recognise that you have a problem. I recognise that we have to deal with corruption, restructuring the way we do business, having an incentive and an infrastructural platform to develop the country but we need help to do this." He has pointed to how this can happen. The exposure of other taxpayers in other countries is enormous in some cases.

It is fine for Deputy Paul Murphy to say, "Withdraw your threat," but there is no threat to force anybody out of the eurozone. The Deputy talks about democracy here, but it is the same for other European leaders who say, "I cannot get a motion through my parliament to extend the bailout programme. I will not get it through because I am being held in position by two or three parties." That is democracy and that consent is required. In fact, some parliaments would have to ratify whatever agreement might be reached.

On Saturday the intention was that there would be a meeting of eurozone Ministers to negotiate for whatever length of time with their Greek counterparts, to agree a deal, have it put through the Greek Parliament and endorsed by the Finnish, Dutch and German Parliaments. They would then be able to proceed for the next six months with a finance programme to meet Greece's needs, meet its repayments and allow the country to start the work the Prime Minister, Mr. Tsipras, himself said was required. I hope we can get back to that position during the conference call at 4.30 p.m. Nobody wants to see us spiralling backwards and downwards. There is a responsibility on everybody to make it work. From the institutional end and the point of view of political leaders in the eurozone, we are willing to work and engage with our Greek colleagues to make it happen. There is a way through this, but it requires two to be at the table.