Amendments Nos. 1, 2 and 7 are related and may be discussed together.
Finance (Certain European Union and Intergovernmental Obligations) Bill 2016: Report and Final Stages
I move amendment No. 1:
In page 4, line 11, to delete “behalf.” and substitute the following:
“behalf, unless otherwise stated in this Act and in so far only as any of these powers do not extend to additions, changes or deletions to the Schedule without consent of the Oireachtas.”.
As the Minister of State is aware, I tabled the only four amendments that were before us on Committee Stage. Two of them were accepted and this is one of the amendments that was not accepted and which I have re-tabled for Report Stage. The amendment seeks that the powers that will be conferred on the Minister would not extend to any alterations of the Schedule or the loan agreement. I note the Minister has brought forward amendment No. 2, which has the effect that while the Minister would have the power to alter them, the Dáil would for the first time have the power to annul the changes to the loan facility agreement. For me, that is an acceptable compromise and on that basis I withdraw the amendment.
Amendment, by leave, withdrawn.
I move amendment No. 2:
In page 4, between lines 11 and 12, to insert the following:
“Decisions varying terms of Loan Facility Agreement
3. The terms in writing of any decision (other than a decision referred to in section 4(2)) to vary the terms of the Loan Facility Agreement shall be laid before each House of the Oireachtas as soon as may be after the decision is made and, if a resolution annulling the decision is passed by either such House within the next 21 days on which that House has sat after its terms have been laid before it, the decision shall be annulled accordingly but without prejudice to the validity of anything previously done thereunder.”.
As outlined by Deputy Doherty, amendment No. 2 inserts a new section 3 into the Bill which provides that any variance to the loan facility agreement shall be laid before each House of the Oireachtas as soon as possible and that, if either House resolves to annul this decision within 21 days, it shall be annulled accordingly.
We will not oppose this amendment, which represents an improvement. I thank the Minister of State for taking the points on board. However, we fundamentally believe it would be better if it was necessary to have a vote beforehand to give the Dáil a say in this rather than having a retrospective look at it. I just wanted to register the point.
Amendment agreed to.
Amendments Nos. 3 to 6, inclusive, are related and may be discussed together.
I move amendment No. 3:
In page 4, line 13, to delete “Minister” and substitute “Oireachtas, should Dáil Éireann be dissolved approval shall be made by a decision of the government and approval of Seanad Éireann”.
The effect of the amendment means a vote would be required in the Oireachtas rather than simply a decision of the Minister for the money to be extended and the loan of €1.85 billion to be made. The Minister of State raised the point on the Committee Stage debate as to what would happen if the Dáil were dissolved. In our opinion, the amendment provides the best possible safeguards in that scenario, whereby it would have to be done by the Government acting collectively as opposed to the Minister. It would also involve the Seanad, as the Seanad could obviously be recalled and the parties would be represented in the Seanad, so it could also play a role.
The broader point is that we are against the whole process of setting up this massive bank bailout fund and we will presumably be against the extension of the money in such a circumstance. We think there should be a democratic right of the Dáil to have a say in this. Events in Italy, even in the time since we discussed this on Committee Stage, demonstrate the point in terms of some of the fundamental weaknesses of the overall European approach to the banking crisis and the scale of the crisis that could be coming down the line. I have read that, in Italy, there is now a phrase, le sofferenze, which means "the suffering". It does not refer to the people but to the debts that simply cannot be paid. The amount of bad debt held by the banks in Italy is estimated at €360 billion. The idea that the State - the public purse - in Ireland and ordinary people would be on the hook for another significant round of bank bailouts is obviously something we are against. Therefore, we would seek to have a mechanism for a democratic vote on this before any money is extended. We understand that it is a loan, but nonetheless the point stands.
Amendment No. 3 is similar to amendment No. 4, which I have tabled and which is a variation of the amendment I put forward on Committee Stage. Obviously, the change is in regard to the lengthy discussion in committee where the Minister of State raised the issue of a situation where there was an election and the House was not sitting. That is why the amendment now reflects that it should be the Oireachtas that sanctions or gives approval for such a drawdown of this loan, or the Minister as per Article 28.11.2° of the Constitution, which is the article that refers to Ministers continuing to hold office during an election, when the Dáil has been dissolved.
I do not want to rehash the debate we had on Committee Stage except to say it is an important issue in that it should be for the Oireachtas to give the final sanction on all of these matters.
I understand the logic behind it if the Government wanted pre-approval in the case of an eventuality which the Minister has said he does not envisage arising. There is a pre-approval process. However, the best democratic control over this process would be to refer back to the Oireachtas at all times, where possible. I cannot envisage a scenario where that would not be possible outside the point the Minister of State raised about the Dáil being dissolved and candidates being the middle of an election, a point now dealt with in the amendment.
We need to think of what would have to happen to trigger this section or for it to be invoked. A bank would have to fail or be on the brink of failing for the bail-in mechanism to be triggered. It would then have to go through the waterfall and then we would see the disbursement from the State to the fund of a certain amount of money. The Minister of State has made the point time and again that this would have to happen swiftly, within four days. I cannot see any scenario where the Oireachtas would not be recalled where a bank failed in this country, especially if it required the State to put its hand in its pockets to provide money for the ailing bank. There is no such scenario whatsoever. Given the history and what we have gone through in the past ten years, I do not care where we are, whether we are on holidays or whether it is before New Year's Eve, there is no scenario in my mind whereby Members would sit at home and decide that it is okay and does not really require them to act. Regardless of whether it was to give authority or permission for this provision to be invoked, we would be in the House anyway discussing the matter. Otherwise, we would not be doing our job as legislators. We would not have the best interests of the country at heart if we did not recall the Dáil and Seanad to deal with these matters.
I took on board the points of the Minister of State in respect of the elections, but in respect of all others scenarios I do not think it would be sensible or a factor to be unable to recall the Dáil within four days of a bank needing the support of the taxpayer again. If we could not do that, then we are doing something altogether wrong.
The Minister of State should accept amendment No. 4 for the reasons I have outlined. It does not alter the substance of the Bill. It simply reinforces the democratic control, that is to say, it would rest within the Parliament and the Members of the Houses of the Oireachtas. While we are giving pre-approval, it is important that final approval would be given by the same Members with the full information and knowledge of the particular issue at a given point in time.
I thank the Deputies for their amendments. The issue was debated at length on Committee Stage. Deputy Doherty should note that it is not a question of the risk that we might be sitting at home unwilling or unable to come to the Chamber to make such a decision. It is about giving a higher degree of certainty now that in such an eventuality the funds could be released in a timely fashion, with the Minister being the final check. As I made clear on Committee Stage, the Minister cannot accept the amendment. During a resolution event, it would be of paramount importance that funding be made available quickly. The loan facility agreement states that 50% of the moneys must be available within four days and that in exceptional circumstances all the money must be made available in that timeframe. A rapid response to such a request is crucial to prevent contagion in the rest of the banking system, since the whole resolution process could occur over the course of a weekend. Therefore, it could significantly delay a resolution where it was necessary that the Dáil or Seanad be reconvened to make such an approval.
On Committee Stage we discussed the problems in the event that the Dáil has been dissolved for an election. The Deputy aimed to deal with this issue in amendment No. 3. However, we could still have a situation where both the Seanad and the Dáil have been dissolved, in which case it would be impossible to recall either. Therefore, this amendment could result in delays in providing a loan to the Single Resolution Fund due to having to recall the Dáil and the Seanad or waiting for elections to be completed. This adds more uncertainly to the market which may lead to ordinary depositors and small businesses being negatively impacted in such an event.
Although we discussed it on Committee Stage, it is worth recalling that at least 8% of eligible liabilities would have to have been written down, the national compartment of the Single Resolution Fund exhausted and the mutualised parts of the other member states' funds exhausted before this loan facility agreement could be called upon by the single resolution board. The Minister would then be in place to be the final check. Furthermore, the use of the credit line is only a temporary arrangement while waiting for the fund to grow in size by contributions from the European banking sector and the putting in place of a common backstop by 2024.
The amount the Minister for Finance can approve is capped at €1.815 billion. Any increase in this amount would have to be approved by both Houses of the Oireachtas. Moreover, amendment No. 2, proposed by the Government, ensures that any changes to the loan facility agreement can be annulled by either House. That amendment has been accepted by the Minister. Thus, the Minister believes there are sufficient protections and oversights in place in the Bill without adding more. More conditionality could result in adding greater uncertainty in a difficult situation and potentially impacting retail depositors and small businesses negatively.
For similar reasons, amendment No. 4 from Deputy Doherty cannot be accepted by the Minister.
I wish to refer to amendment No. 5 briefly because it is grouped as well. On Committee Stage I accepted an amendment from Deputy Doherty which provides that the Houses of the Oireachtas must approve any variance of the sum contained in the loan facility agreement. The Office of the Parliamentary Counsel recommended that some technical drafting amendments be made to the text which do not materially affect the purpose of the section.
The details of amendment No. 6 were previously discussed and agreed. I trust amendment No. 2 facilitates the aim of Deputy Murphy's amendment on the issue pertaining to the changes in the loan facility agreement.
I thank the Minister of State for his response. The same phrase was used on Committee Stage, that is, the reference to the need for a high degree of certainty now. We thrashed out the point but there is still no certainty because it is still a decision of a Minister. Who knows what government could be in place at that stage? It is not possible to give 100% certainty to our so-called European partners that the money would be paid in. It depends on what government we had in place. There could be a left government or Minister in place who does not agree to it.
What the phrase means is that democracy or coming back to the Dáil adds a degree of uncertainty. It is problematic if this is the Government approach. It is problematic if we have to be able to tell our European partners that the money will go, they need not worry and the banks will have it because the Government does not have to go back to the Dáil. The Minister of State is not now making the case that the Dáil cannot come back and we could not have it done in time. If the issue is more a question of whether the Dáil would agree to it, then it is somewhat problematic democratically.
I wish to clarify the point. There is a concern about both the Dáil and the Seanad not sitting because an election has been called and, therefore, it is not possible to recall either. That point still maintains.
That is fine, but that point was raised and taken on board by both Deputy Doherty and myself in different ways with regard to how the amendments are written. That point has been taken on board. If it is not a question of the Dáil sitting but a danger that the Dáil might vote against it, then that is democratically problematic.
Will the Minister of State outline the situation when the two Houses are dissolved? Article 18.9 of the Constitution details how Senators hold their seats until the day of the next Seanad election. Therefore, a circumstance where the two are dissolved does not seem to be possible. That could be a reference point.
There is nothing the Minister of State has said either here or on Committee Stage that convinces me otherwise. In a way, amendments Nos. 3 and 4 are similar but different at the same time. The Minister of State made a point and I imagine he will respond to Deputy Murphy on the question he posed in terms of the Dáil and Seanad being dissolved at the same time. The Minister of State has said it is not an issue in terms of the Oireachtas changing its mind. He said it is not a question of certainty about that, but it would be an issue if the two Houses were dissolved at the same time. However, my amendment does not deal with that scenario. Deputy Murphy's amendment does reference approval by Seanad Éireann, but my amendment does not. My amendment basically refers to the approval of the Oireachtas or the Minister, in the case where Article 28.11.2o of the Constitution applies, in other words, when the Houses are dissolved. The main issue the Minister of State has articulated does not stand and the Minister of State should accept amendment No. 4.
I will comment on the other amendments in this group. Amendment No. 5 is a re-phrasing of my amendment that was accepted on Committee Stage. That is acceptable to me and I am pleased the Minister of State accepted it at the time.
Amendment No. 6 is not required given the safeguards we have put in place through the amendments I have already tabled that have been passed. The power to ensure any amendment to the loan is annulled and to prevent the fund being increased now rests with the Houses of the Oireachtas.
In response to Deputy Paul Murphy, 100% certainty is not possible, but in the unlikely scenario that the funds need to be approved within four days because of the risk to depositors and small businesses, there is a greater degree of certainty in having the Minister as the final check. This is the approval by the Oireachtas. This is the Single Resolution Fund, which we have signed up to. This is a temporary loan facility until 2024, when the fund comes into effect and a backstop will be in place. Within that period, the waterfall of resolution will come into effect. The Minister will be the final check for 50% of the funds. That amount could not be increased without legislation from this Dáil and changes to the terms of the agreement could be annulled by the Dáil within 21 days.
Neither the Dáil nor the Seanad might be sitting. Article 16.4.2° of the Constitution calls for the Dáil to sit within 60 days of the calling of an election and the Seanad election must take place within 90 days of the dissolution of the Dáil, so it is possible that an overlap would exist. Therefore, the Government can accept neither amendment No. 3 nor amendment No. 4. I have already spoken on amendments Nos. 5 and 6.
Deputy Paul Murphy has the right to reply again, if he wishes.
It is my understanding that Senators hold their seats until the day of the next Seanad election. We can debate it further. It may be an obscure question.
I will use my time to speak more about amendment No. 6. Amendment No. 2 deals with it in part. It is a preferable situation. We dealt with this on Committee Stage and it is clear that amendments can be made to the loan facility agreement. In theory, substantial amendments could be made if all member states were to agree to them. There is a basic democratic need for a vote in the Oireachtas before such a change would take place. It would be preferable for a vote to take place beforehand rather than the retrospective check provided for by amendment No. 2.
Amendment put:
The Dáil divided: Tá, 29; Níl, 77.
Tá
- Broughan, Thomas P.
- Buckley, Pat.
- Collins, Joan.
- Connolly, Catherine.
- Cullinane, David.
- Doherty, Pearse.
- Ellis, Dessie.
- Ferris, Martin.
- Fitzmaurice, Michael.
- Funchion, Kathleen.
- Howlin, Brendan.
- Kenny, Martin.
- McDonald, Mary Lou.
- Mitchell, Denise.
- Munster, Imelda.
- Murphy, Paul.
- Nolan, Carol.
- Ó Broin, Eoin.
- Ó Caoláin, Caoimhghín.
- Ó Laoghaire, Donnchadh.
- O'Reilly, Louise.
- O'Sullivan, Maureen.
- Pringle, Thomas.
- Quinlivan, Maurice.
- Ryan, Eamon.
- Shortall, Róisín.
- Smith, Bríd.
- Stanley, Brian.
- Tóibín, Peadar.
Níl
- Bailey, Maria.
- Barrett, Seán.
- Brassil, John.
- Breathnach, Declan.
- Breen, Pat.
- Brophy, Colm.
- Browne, James.
- Bruton, Richard.
- Burke, Peter.
- Butler, Mary.
- Byrne, Catherine.
- Byrne, Thomas.
- Cahill, Jackie.
- Calleary, Dara.
- Canney, Seán.
- Cannon, Ciarán.
- Carey, Joe.
- Casey, Pat.
- Cassells, Shane.
- Chambers, Jack.
- Chambers, Lisa.
- Corcoran Kennedy, Marcella.
- Cowen, Barry.
- Creed, Michael.
- Curran, John.
- Daly, Jim.
- Deering, Pat.
- Doherty, Regina.
- Dooley, Timmy.
- Doyle, Andrew.
- Durkan, Bernard J.
- English, Damien.
- Farrell, Alan.
- Flanagan, Charles.
- Griffin, Brendan.
- Halligan, John.
- Harty, Michael.
- Haughey, Seán.
- Heydon, Martin.
- Humphreys, Heather.
- Kehoe, Paul.
- Kelleher, Billy.
- Kyne, Seán.
- Lahart, John.
- Lawless, James.
- McEntee, Helen.
- McGrath, Finian.
- McGrath, Michael.
- McLoughlin, Tony.
- Mitchell O'Connor, Mary.
- Moran, Kevin Boxer.
- Moynihan, Aindrias.
- Moynihan, Michael.
- Murphy, Dara.
- Murphy, Eoghan.
- Murphy, Eugene.
- Naughten, Denis.
- Naughton, Hildegarde.
- Neville, Tom.
- Noonan, Michael.
- Ó Cuív, Éamon.
- O'Brien, Darragh.
- O'Callaghan, Jim.
- O'Connell, Kate.
- O'Donovan, Patrick.
- O'Dowd, Fergus.
- O'Keeffe, Kevin.
- O'Loughlin, Fiona.
- O'Rourke, Frank.
- Phelan, John Paul.
- Rabbitte, Anne.
- Rock, Noel.
- Ross, Shane.
- Scanlon, Eamon.
- Smith, Brendan.
- Stanton, David.
- Troy, Robert.
Tellers: Tá, Deputies Paul Murphy and Bríd Smith; Níl, Deputies Jim Daly and Regina Doherty.
Amendment declared lost.
I move amendment No. 4:
In page 4, line 13, to delete "Minister" and substitute "Oireachtas, or the Minister as per Article 28.11 2° of the Constitution".
Amendment put and declared lost.
I move amendment No. 5:
In page 4, to delete lines 18 to 20 and substitute the following:
"(2) Notwithstanding section 2, no decision under the terms of the Loan Facility Agreement to vary the sum specified in subsection (1) shall be made without the prior approval of both Houses of the Oireachtas.".
Amendment agreed to.
Amendment No. 6 not moved.
I move amendment No. 7:
In page 4, line 23, to delete "6” and substitute "7(2)".
Amendment agreed to.
Amendments Nos. 8 to 10, inclusive, are related and may be discussed together.
I move amendment No. 8:
In page 4, between lines 34 and 35, to insert the following:
"(1) In addition to the obligation under the following subsections, the Minister shall, within one month from the date on which a payment of a sum under section 4 of the kind referred to therein is made to the Single Resolution Board, cause a statement of the amount of the payment to be laid before Dáil Éireann.".
As Members will be aware, on Committee Stage I accepted an amendment from Deputy Pearse Doherty which provides that the Minister for Finance must lay a report before Dáil Éireann within one month of a loan being made to the Single Resolution Board or any moneys received by the State from the Single Resolution Board. The Office of the Parliamentary Counsel has recommended some technical drafting changes be made to the text, which do not materially affect the purpose of the section.
As the Minister of State said, these amendments further strengthen the amendment I proposed to the Bill on Committee Stage.
Amendment agreed to.
I move amendment No. 9:
In page 5, to delete line 8 and substitute the following:
“(ii) the period in any year after 2016 from 1 January to 31 December,
or”.
Amendment agreed to.
I move amendment No. 10:
In page 5, to delete lines 12 and 13 and substitute the following:
“of the first-mentioned period in this paragraph).”.
Amendment agreed to.
Bill, as amended, received for final consideration.
Question proposed: "That the Bill do now pass."
Votáil.
Will the Deputies claiming a division please rise?
Deputies Mick Barry, Thomas Broughan, Ruth Coppinger, Paul Murphy and Bríd Smith rose.
As fewer than ten Members have risen, I declare the question carried. In accordance with Standing Orders, the names of the Deputies dissenting will be recorded in the Journal of the Proceedings of the Dáil.
Question declared carried.