Last Sunday the magazine section of the Financial Times included a four-page article entitled “A Plague on their Houses: How Bankers, Builders and Politicians Brought Ireland to its Knees”. The article observed that at the “height of the lunacy”, three quarters of total Irish bank lending was for property construction, land and speculation. This is described in the article as what Ireland did for a living. Yet while all this was going on, the then Minister for Finance, now Taoiseach, told us that the fundamentals of the Irish economy were sound. Moreover, we were told in the late summer of 2008 that the banks were sound and solvent.
By the end of September 2008, however, the deposits of most of our financial institutions had to be guaranteed. We were subsequently told we would have to take on a significant portion of their debt under the NAMA process but that this would provide the cheapest bailout in the world. It turns out, however, that it is the most expensive bailout in the history of the OECD. We were told that the haircut applied under NAMA would be 23%, but the assets transferred so far have had an average discount of 50% and it is expected that the haircut on the next tranche will be even greater. We were then told that Anglo Irish Bank is of fundamental systemic importance to the Irish economy. We have since seen that it has been fundamental to the ruination of the country. We have already committed at least €22 billion that we will never see again as a result of the bailing out of that bank.
Almost every week we find ourselves exposed to another €1 billion, €2 billion, €3 billion or €4 billion, and the Government is obliged to revise the promises or assertions it made the previous week. The story keeps changing. The Minister of State must forgive us then for being a little apprehensive when we find that over a weekend, we were suddenly exposed to a further €6 billion between our share of the Greek bailout and our contribution to the stabilisation fund. We recognise that the financial situation in Europe was as grave that weekend as it has ever been. We accept that decisive action had to be taken. My concern is that every time the Government takes decisive nation it costs the nation money. Moreover, on every occasion, it has been wrong in its predictions of the outcome of its strong decisions. It has been wrong even in its understanding of those decisions. I strongly suspect that when the guarantee was given on that fateful day in September 2008, the Government did not even realise that the guarantee extended to bonds. If it did know, it did not understand the implications — that it would be a millstone around the neck of the next generation.
The Government's so-called decisive actions, made in haste and with no parliamentary discussion or scrutiny, have led us into a vortex of repeatedly throwing good money after bad. Given that almost every action and statement made by the Government on the financial and banking front has been wrong — and sometimes proved wrong within days — it is just a little foolhardy for the Taoiseach to run off to Europe and sign up to the provision of another €1.3 billion. I accept that we must contribute to bailing out Greece, but this was done without any prior consideration in the national Parliament of the terms of that bailout or its implications for Ireland.
We were told that our portion of the bailout would be based on our share in the European Central Bank. That seems fair until one considers that we are paying more per household than any other eurozone country with the exception of Luxembourg which is the richest country in Europe if not the world. Is it fair that debt-ridden Ireland, the country carrying the highest level of personal, banking and Government debt, should pay more per household than any other member state? Three days after the initial announcement, our disproportionate burden was compounded by a further commitment of €4.4 billion to the eurozone stabilisation fund. Was the Government aware of the disproportionate household burden for Irish families? Was any other formula even considered, such as the agreed formula modified by consideration of debt per household in each country? Alternatively, was consideration given to a greater burden for those countries that engaged in reckless lending and are now, bizarrely, horrified by the reckless borrowing of others? I understand the Germans were the big lenders. In giving this money to Greece, we are effectively bailing out the German banks.
The tragedy is that the debate on the legislation to confirm our Greek commitment is virtually irrelevant because it is too late to influence any aspect of what the Government has signed up to, too late to use another formula, too late to get a fairer deal for Ireland and too late to even say it is too late. Time and again, particularly at budget time, Deputies Bruton and Kenny have called for a different way of doing our business, particularly in respect of major decisions including budget decisions and decisions such as this, and emphasised the need to use our Parliament to tease out issues before they are set in stone so that mistakes are avoided, pitfalls are foreseen in time and unfairness such as that arising from this process is prevented. Europe is now demanding surveillance of our budgets. Does it occur even now to the Government that if we did our own surveillance properly and if Parliament played its correct role as a watchdog for the people, we might never have ended up in our current mess?
The Minister in his speech criticised me for even pointing out that we are paying disproportionately more than other eurozone countries. I regard it as my duty to point that out and I resent the Minister's suggestion that it is somehow unpatriotic to do so. The reality is that debt per household is a very legitimate measure of a country's well-being and of its ability to borrow and make repayments. Therefore I absolutely stand over what I say. The Minister is wrong to suggest we should not question the manner in which responsibility was shared among countries.
As the Taoiseach stated last week, he must convey confidence in Ireland's ability to survive. While this is true, one does not inspire confidence by burying one's head in the sand, hiding the facts or pretending everything is rosy in the garden. It was this approach that landed Ireland and Greece in the mess in which we find ourselves. The Government has a history of making decisions behind closed doors, in haste and informed only by vested interests. It does not appear to have learned the lesson that if one is continually wrong, one must change the way in which one does business.
Many have raised the loss of sovereignty arising from the proposed requirement for greater surveillance of national budgets in the European Union. The real loss of sovereignty has been in this House, not Europe, and has been caused by a Government which will not learn from the mistakes of the past, for which people are paying. The Government has abrogated the role, responsibilities and powers of the people's Parliament by preventing proper scrutiny of decisions before they become irreversible. The decision before us is now irreversible.
While the Fine Gael Party supports the bailout for Greece, I challenge the Minister's assertion that we will get our money back. We will sing for this money. It is being paid out on the understanding that it will not be returned and on the sole condition that it will prevent the collapse of the euro. Nevertheless, the bailout was necessary. My party also accepts the need for greater control of eurozone country deficits. We do not, however, accept that these matters cannot be discussed in this Parliament, whose role is to act as the watchdog for the people.