Promissory Notes: Motion (Resumed)
The following motion was moved by Deputy Pearse Doherty on Tuesday, 8 November 2011:
That Dáil Éireann:
noting that:
following the transfer of its assets to the National Asset Management Agency (NAMA) in 2010, Anglo Irish Bank was left with toxic debt of €30.6 billion;
from March to December 2010 the Government issued a series of promissory notes to Anglo Irish Bank and Irish Nationwide Building Society totalling €30.6 billion;
these promissory notes placed an obligation on the State to pay Anglo Irish Bank €30.6 billion;
the interest rate charged on these loans by Anglo Irish Bank will cost the State an additional €16.6 billion;
this debt, totalling €47 billion, amounts to 27% of the State's debt-to-GDP ratio;
the repayment of this debt will take place over a twenty year period from 2011 to 2031;
as the State will have to borrow money to service this debt, it is reasonable to assume that an additional cost of at least €28 billion will be incurred by the State in interest payments on monies borrowed to pay the €47 billion to Anglo Irish Bank;
this additional cost is calculated at an interest rate of 4.7% based on average cost of funds raised by the National Treasury Management Agency (NAMA) in the bond market in 2009 and 2010;
on this basis, the cost to the State and the taxpayer arising from the promissory notes will be at least €74 billion up to when the final payment is made in 2031;
a number of economists argue that this is a conservative estimate and the cost of servicing this debt will be much higher, possibly four times greater than all the combined ‘austerity' spending cuts and tax increases to date;
the first transfer of money to Anglo Irish Bank arising from promissory notes took place on 31st March, 2011, totalling €3.1 billion;
annual transfers of €3.1 billion will be made every year on 31st March from 2011 through to 2023;
from 2024 the annual transfers will gradually decrease from €2.1 billion in 2024 to €0.1 billion in 2031;
these annual payments do not include the additional cost of the interest on monies borrowed to service the €47 billion transfer to Anglo Irish Bank;
alongside these payments Anglo Irish Bank, now operating as Irish Bank Resolution Corporation, will continue to use taxpayers' money to pay unguaranteed, unsecured senior bondholders;
on 2nd November, 2011, the Government allowed Anglo Irish Bank to pay a single unguaranteed, unsecured senior bond to the value of $1 billion despite enormous public opposition;
on 25th January, 2012, Anglo Irish Bank will pay out a single unguaranteed, unsecured bond to the value of €1.2 billion;
on 28th June, 2012, Anglo Irish Bank will pay out a single unguaranteed, unsecured bond to the value of €454 million; and
twenty four additional unguaranteed, unsecured senior bonds with a combined value of €800 million will be paid out from January 2012 through to April 2018;
agrees that:
the former Fianna Fáil-Green Party Government were wrong to issue these promissory notes;
this decision undermined the public finances, increased the deficit and damaged the social and economic stability of the State;
the current Fine Gael-Labour Government must make clear that it is not in a position to pay this toxic private banking debt;
the Taoiseach, Enda Kenny T.D., and the Minister for Finance, Michael Noonan T.D., should enter into immediate discussions with the European Central Bank to have the promissory note withdrawn and to remove this toxic private banking liability from the State and the taxpayer;
the Government should seek support from our European partners in this endeavour on the grounds that removing the obligation created by the promissory note would reduce our debt-to-GDP ratio to approximately 87%, easing the State's transition back to the international bond markets and assisting in reducing the deficit and returning the economy to sustainable social and economic development; and
the practice of using taxpayers' money to repay the promissory note must end; and
calls on the Government to intervene to prevent Anglo Irish Bank from using taxpayers' money to repay unguaranteed senior bondholders.
Debate resumed on amendment No. 2:
To delete all the words after "Dáil Éireann" and substitute the following:
"recognises that the Government inherited a situation in relation to the banking sector and specifically in relation to Anglo Irish Bank and Irish Nationwide Building Society which resulted directly from the decisions taken by the previous Government;
recognises that decisions taken by the previous Government included the decision to guarantee the debts of the covered institutions. This decision and consequential decisions taken by the previous Government have effectively transferred the liability for private bank debt to the taxpayers of this State and contributed to the need for the EU-IMF bailout;
recognises that the overall cost to the State of promissory notes provided to Anglo Irish Bank and Irish Nationwide Building Society currently stands at €47.4 billion;
acknowledges that the Government should not act unilaterally in relation to the repayment of unguaranteed senior debt and should have regard to the views of our partners who are providing the requisite funding for the financial institutions;
acknowledges that the Government is working with our partners in the EU and IMF to address the situation and is actively involved in discussions with a view to reducing the overall cost to the State;
affirms that the approach being pursued by the Government, given the situation the Government has been presented with, is the optimum approach which will produce the best medium to long-term outcome for the State and the taxpayer; and
encourages the Government to press ahead with discussions and negotiations around a range of support measures that recognise the contribution made by the State in support of the stability of the Eurozone."Minister for Finance.
I wish to share time with Deputies Boyd Barrett and Pringle, if that is all right.
I congratulate the Sinn Féin Party for tabling this motion, although I suppose the Government response is somewhat like a long-playing record and is not one that contributes much to the debate. In the extremely limited time I have available, I wish to state how disappointed I am, as an Independent Member, with the Government's reply. On issues such as this and in particular in respect of Anglo Irish Bank bondholders and the banks, the Government was elected to do something a little bit different. However, its response to this motion indicates that Government policy on the banks is completely unchanged. The seven reasons given for opposing and amending the motion contain a bit of rhetoric. Three reasons simply consist of turning around and blaming the last Fianna Fáil-led Government . While that may be rhetoric, it is not policy. It is somewhat tiresome and it is tiring to listen to it all the time. Two of the reasons consist of blaming the European Central Bank, ECB, and I challenge anyone to explain the seventh reason to me because it is utterly and totally meaningless.
The Government's amendment states it "acknowledges that the Government should not act unilaterally", which I suspect sums up the entire flaw in Government policy as it stands at present. The Government now is hopelessly paralysed, particularly with regard to the financial sector, accepts it is paralysed and almost makes a virtue of being paralysed. In response to charges it has acted dishonourably and wrongly in the case of the Anglo Irish Bank bondholders, the Government blames Fianna Fáil and states it no longer is in command of its own economy. It no longer is in command of its own economy by choice, because it had a choice. It had several choices but the easiest choice of all has been funked in the case of Anglo Irish Bank. There was an option not to pay the Anglo Irish Bank bondholders. I do not refer to the more radical suggestions made from this side of the House, in which I believe, that we should have considered the possibility of defaulting on our debt and this still should be considered. However, although the easiest and first choice is contained in this motion, the Government hides behind the excuse that it cannot act unilaterally and that according to two of the excuses listed, the ECB will not allow it to do so. The amendment covers this well by noting the Government must consider the views of our partners but that is code for the ECB telling us what to do. This simply is unacceptable as the Government bends the knee to the ECB in every case.
However, the choice in this regard was simpler. Moreover, it was a choice made by the Minister for Finance himself when in America. In a spirit of bravado, he stated his intention to burn the bondholders. I do not know what injection he took or what was in the American air that morning-----
The Deputy must conclude.
I am just finishing. However, the moment he came home, he spoke to Mr. Trichet or one of his apparatchiks and changed his mind. He then stated Ireland could not make any unilateral decisions but would do what the ECB told it. The lesson for the Government from this motion should be that it does have choices. It has a choice to act unilaterally and have some independence. However, it has chosen to bend the knee to the ECB.
I also commend Sinn Féin on tabling this motion. It brings into sharp focus the obscenity that is being perpetrated against the Irish people by the Government. It was started by the previous Government, about which there is no doubt regarding its guilt and complicity in conniving with the greedy, the financial elites, the developers and so on to land us in this mess and sign us up to a deal that will force ordinary people here to pay for it. However, the present Administration had a choice to break from that. It dishonestly led the electorate to believe it would do something different but now it carries on doing exactly the same thing. Moreover, the contrast is clear, as €700 million will be taken from the poorest and most vulnerable people via the social welfare budget in December. Rent allowance payments and God knows what else will be slashed for the poor and the vulnerable even though just weeks earlier, the Government was willing to hand over more than €700 million to unsecured, unguaranteed Anglo Irish Bank bondholders. The Government claims it is broke, has no money and has no choice but to impose this austerity. However, it can afford to hand over more than €700 million to unsecured, unguaranteed gamblers in the casinos of the international financial markets. This is unbelievable.
Moreover, next March and each year for 12 years thereafter, a further €3.1 billion is to be handed over to this toxic zombie bank that was really a casino run by gamblers and knaves. While we apparently can afford to do that, we must take €3.8 billion from working people, the poor, the vulnerable and unemployed citizens in the budget. This is absolutely disgusting. Let the public know that when Ministers turn around and state the Government is bankrupt and has no money, this is not true because it has the money to give to the toxic banks.
Why is all this being done? It does not simply pertain to the ECB, although I agree with Deputy Ross. It does not even relate to the theatrics involving Silvio Berlusconi, Merkel, Sarkozy or Papandreou. It covers up something much more fundamental, which has become very obvious in the last few days. I refer to these things called markets, which comprise young guys in their 20s in the City of London or in trading rooms in some of the major financial centres around the world making decisions to make themselves money. This means that democracy itself in Ireland, Italy and Greece is being demolished simply to satisfy the greed of these traders and these things called markets, to which our Government kowtows. I appeal to the Government to stop it because the country is sinking.
I welcome the opportunity to speak on this Private Members' motion tabled by Sinn Féin. I commend Sinn Féin on having laid out in stark terms and language the actual implications of the promissory notes that admittedly were signed up to by the previous Government. Members are constantly told by the Government that it is carrying the can for its predecessor, that it has no choice and so on in that regard. I believe this excuse ended on 2 November last, when the Government decided to pay €700 million to unsecured Anglo Irish Bank bondholders. Moreover, I believe it will mark a real sea-change, whereby the Government henceforth will have complete ownership of this programme. As other speakers noted, the Government could have taken the decision to stand by its election promises. It could have dealt with this matter in a completely different way. It could have stated it had no commitments or obligation to unsecured bondholders in this defunct bank. It could have told our so-called partners in Europe that this was the position to which the Irish people had agreed and over which the Irish sovereign Government intended to stand. However, the Government chose to pay the €700 million last week; it chooses to pay €1 billion in January of next year and it chooses to set this country on the course of paying back €47 billion over the next 20 years. As the Sinn Féin motion states, that sum could grow to €74 billion or more over the lifetime of the interest payments. That is the Government's decision, for which it has total responsibility.
I welcome the opportunity to speak on the simplistic and populist amendment put forward by Sinn Féin.
The amendment is put forward by the Government.
Once again, we have to ask the Sinn Féin Members the very straightforward question, namely, what exactly would they do. Some months ago, the Government secured a reduction in the interest rate we are paying——
——which will deliver €10 billion in savings to the Exchequer.
It is important to consider the language of a promissory note. It is a promise of the State to repay the sovereign debt that we as a people owe. Sinn Féin, it has to be remembered, supported the very ill-fated debt guarantee at the time, as did Fianna Fáil.
We have inherited a situation relating to the banking sector generally which leaves the State with very little room to manoeuvre. However, to criticise and to suggest that Ireland should move and act unilaterally is to suggest that perhaps we should not have taken the €10 billion in interest rate savings. It is not as straightforward and ridiculous a position as those on the opposite benches try to suggest, namely, on the one hand, we cannot pay our promissory notes and, on the other hand, we are willing to accept a €10 billion saving over a decade. If we were to do that, we would have a net loss of €5 billion to €6 billion.
The message we are delivering in straightforward terms, as a Government, is that we are unlike other countries, in particular one country. No one takes any satisfaction in seeing the Greek people in the position they are in. However, Ireland is a country that is open for business and that will pay its way. We are a democratic State that will undo the damage of the reckless governance and Government we had in the past.
We have to respect the integrity of the Taoiseach and Ministers when they go into a very difficult forum in the very fraught eurozone which we have at present, with leadership that is, to be fair, struggling to bring us out of this economic crisis, and we must accept that our Government is negotiating in good faith in the best interests of our people. Many Members of this House suggested from the Opposition benches, almost in a hopeful fashion, that we would not secure interest rate reductions.
With regard to the much-maligned term "austerity", we should remember that it is the principle of economies balancing their budgets, so that what they take in is equal to what they pay out. That has not happened in much bigger countries than Ireland, such as Germany and France, and, significantly, it does not happen in the United States. It is through economies like Ireland's showing that we can pay our own way that, from a position of strength, we can move towards a renegotiation down the line of some of the elements of the cost of the total debt to our people and the State.
I welcome the opportunity to speak on the motion. Deputies referred to choices, in particular the choices open to the Government. To be fair, we have a choice to either try to get the country out of the economic hole we are in or to go down the road of total economic ruination, which would basically be the result if we tell the European Central Bank to cart off the money it is using to keep the doors of the country open.
While it is very easy to say that, Members on the other side of the House have never explained the consequences of that. The Members opposite might take the opportunity the Taoiseach offered this morning in regard to the costings that can be provided by the Department of Finance for the upcoming budget. I would like to know where the €30 billion deficit in the State's balance sheet could be filled. Even apart from the banks, where would the money come from to pay nurses and teachers and to make sure we have social protection if we did not have the European Central Bank? The reality is that the money is not there. We have a massive budget deficit. We are bringing in about €20 billion per year and we are spending €50 billion, so we have a €30 billion gap and, therefore, we are dependent on the European Central Bank.
While I agree with many of the speakers in regard to how the banking debts were accumulated, regardless of who was in Government, once the State guaranteed that debt, it then became the sovereign. Last week I likened this to walking into a credit union to borrow €5,000 to buy a car. If I come back to that credit union two years later and say I will not bother paying it back, but thanks very much for the €5,000, does anyone honestly believe that, with no negotiation with the credit union, I will get further credit in the future. The reality is that I will not. They would not trust me and they will not trust us. We cannot act unilaterally.
The Taoiseach, the Minister for Finance, the Minister for Public Expenditure and Reform and the Tánaiste have offered the facility to Members to come up with credible, costed proposals that can bridge the budget deficit, not to mention the white elephant which is the banking situation. All we have heard so far is "Isn't it desperate to be putting €700 million into Anglo Irish Bank?" Yes, it is desperate, but if we do not do it, where do the Members opposite propose that we get the money to keep the doors of the country open?
As a responsible Opposition, they challenge the Government and that is their job. I ask them to show me where we can make savings on a day-to-day basis so we can pay teachers and nurses, and provide the agricultural grants and many other payments that are needed to keep the State open without the European Central Bank, the European Commission and the IMF in town. If they can come up with €30 billion per annum in the magic black hole of their Alice in Wonderland-type school of economics, will they please let us know? Everybody else in the world, and every economic commentator, has been bamboozled by this, but the answer to the global economic crisis is here in Dáil Éireann, although they are afraid to share with us. Do not be afraid. Bring on the solutions. If they are credible, we will implement them.
We told the Government many times — it should tax its rich friends.
The Deputy tells us many things but he never costs them.
I have listened to all of this debate and there is a bit of knockabout involved, which is to be expected. However, there is a real urge, not just in this House but nationally, that we should have an opportunity at some point, whether in committee or otherwise, to have a serious, clear-headed, considered look-back at what happened in the past three years, five years or perhaps a longer period than that - I hope that happens in these Houses, notwithstanding the outcome of the recent referendum. However, for us to have that type of debate and discussion, we will have to look at the issues that are before us. I can engage in the knockabout just the same as the next man, and if Members want to have that for the next four minutes, I will do it. However, I do not want to do it because I believe this issue is capable of being debated and capable of being resolved on its own merits. It is a decision that has to be made, and one part of the decision was made last week when these moneys were paid over, as other speakers have said.
With respect to Deputy Boyd Barrett and others, they are well capable of looking at the decision that is required to be made at this time. All decisions have consequences. There is no decision any Government takes that does not have a consequence, and in particular this one does. There is no question people are right to be angry and frustrated and I would not take from that for one minute. I am angry and frustrated about this but every Member must weigh up the arguments. We are responsible politicians elected to this House not just to engage in a knockabout for our own entertainment or that of those who care to watch us but to debate what is the best decision to be made for the people.
Deputy Doherty summarised his opposition to the Government's position by saying it was "nonsense, dishonest and, at worst, amounted to scaremongering". Nobody has sought to respond to the Minister's contribution last night. I look at this in a dispassionate way and we should all do that and leave the knockabout aside for a minute. I refer to the decision facing the Government and the Parliament, by extension. All actions have consequences and the Minister set out in detail one of the clearest statements to the House on banking policy and the current position that has ever been made. It bears reading, even by those who are always on the opposite side of the argument. He stated:
If we now consider the impact of withdrawing the promissory notes from the institutions at this time the implications are similar - the institutions will be insolvent. Quite simply if you remove €30.6 billion as an asset from the balance-sheet of the institution you have to fill it from some other source or the institution fails. This situation will require payment of all amounts due under all contracts, even the guaranteed ones, so the State may have to pay up a large amount of cash.
He then pointed out Central Bank funding would not be maintained. People say it is not a certainty and Deputy Doherty described it as scaremongering but Deputies Ross, Doherty and others must accept that there is at least a downside risk in taking the action they advocate. I cannot take them seriously at all if they will not even acknowledge that. I can certainly accept them taking the robust view that the money should not be paid but if they are in any way honest, they have to accept that there is some risk in taking the position they have adopted.
The Minister set out the risks as he sees them and no Opposition Member has answered him regarding the downside risks associated with the action advocated in the motion.
I have read the contributions that I did not watch or hear. Nobody has sought to deal with the issue on its merits and to tell us why it would not be more risky to take the position advocated by Sinn Féin. Opposition Members have not done that.
Let us start being serious about the decisions we have to make. We can have knockabouts in the House but we have been sent here to do a job. Let us assess the position and by all means take partisan positions. This issue will be suffused with partisan argument but, sooner or later, we will have to address these issues as a House in a way the people deserve and expect from us rather than engaging in a policy of "don't pay, won't pay, never pay" as if such a decision would not have consequences. Get real and get serious.
There is little to be achieved in reliving the failures of the policy approaches of the previous Administration but it would be wrong of me and the House to close the door on the past and not learn from the chronic policy errors that are the subject of the debate. As the Minister stated last night, "Suffice to say that the initial response of the Government of the time in September 2008 was to provide a full unconditional guarantee for bank debt of the covered institutions. In effect the Government guaranteed hundreds of billions of private bank debt and in that single decision transferred the liability for private bank debt to the taxpayers of the State."
The motion sets out three primary objectives. The first is a call on the House to agree that the previous Government was wrong to issue the promissory note. We can take it for granted that the promissory note was not a good idea. I suspect even the Fianna Fáil Members, who are not present, believe it was wrong in the context of the country's interests. The motion also calls on the Government to intervene to prevent Anglo Irish Bank from using taxpayers' money to repay unguaranteed senior bondholders. It, in effect, calls for a unilateral default.
I respect the input of Deputy Boyd Barrett to this ongoing debate and we have had discussions previously, particularly on the risks associated with default. I once argued with him about the consequences of the scale of deleveraging that would have to take place. Default would facilitate a frenzy of bottom feeding among the people he opposes who would attempt to secure the balance sheets of the institutions covered by the bank guarantee. His approach would facilitate that form of capitalism. In one default, his policy would crystallise the total liability to the State to be called in immediately. That would trigger a set of consequences equal to those faced by the Greek people over the past ten days. This was a difficult decision and we did not want to pay the €700 million last week but one must calculate the cost of not paying it. I appreciate the argument made by Deputy Boyd Barrett but it must be followed through in the context of where we are at now and the immediate interest of our people.
The motion further sets out that the Government should enter discussions regarding the promissory note, which should be withdrawn. That would have devastating and unforeseen consequences for the country. This situation is a paradigm, moving day by day, hour by hour and the prescriptive nature of the devastating solution prescribed by Deputy Boyd Barrett would destroy the country. We are trying to navigate difficult circumstances in the interests of this country and opening up another front equal to that of Greece would not be a good idea. The Deputy referred to the market manipulating Italian bonds and we will not subject our people to that.
The blanket guarantee and the subsequent nationalisation initiative have resulted in the promissory note, which is an IOU. It is a scandalous legacy of the previous Administration. It is a debt understanding that can be best described as a liability transferred rather than paid immediately involving a punitive interest rate payable until the debt is settled. Currently, the total cost of that financial arrangement to the State is €47 million effective until 2031. The Government is committed to renegotiating it. While I welcome Sinn Féin's proposal, it is not as if the Government is acting to engage in a renegotiation of the conditions set out in the promissory note as a consequence of it. This is work in progress for the Government to reduce the liability on ordinary people who are being scared by the language and the rhetoric relating to the promissory note. I hate the notion of the note but it is a fact. We have inherited this and we have an obligation to honour the debt. If we do not do so, we will destroy the international credibility we are working daily to restore. This would open up a debate around the country that we could not survive. We would be caught in the squeeze of a vice grips driven by Sarkozy and Merkel, as Deputy Boyd Barrett described it. We will work our way out of this.
The Government will negotiate and it will not act unilaterally because there will be consequences for the people if we act in such a rash manner. Opposition Members understand that. They can allow themselves the luxury of getting it completely wrong and completely arseways on some of the decisions they would like the Government to make but we have to be a bit more responsible and make sure that decisions are made in the best interests of the people. As a Parliament, we were bounced into supporting Anglo Irish Bank in September 2008 but we should not allow ourselves to be bounced from the frying pan back into the fire by making more hasty decisions like those made that night.
Some of the information presented to the Houses in the course of that debate was clearly wrong. The Minister and the Taoiseach may have kept some information back, as officials and certainly the banks did. We are now clearer about what is happening and have far more information. It is genuinely dishonest, therefore, of the Opposition to talk like this without outlining the consequences of their actions. Opposition Members have softened their stance in what they have written down, but their remarks are the same. They know they are wrong.
In the next few months the euro crisis will settle.
We have been hearing that for two years.
The Deputy can be as simplistic as he wants, but it will take a long time. He does not understand how the European Union works if he continues the nonsense that this could be cured overnight. That is not how it works.
I will take a bet with the Deputy on it.
Fine, we will settle the matter afterwards.
Other measures will be introduced such as eurobonds, quantitative easing and changes to promissory notes. This will happen over a period of time. We only need to look at the evolution of the crisis in recent months and our own position. We went to the edge of the abyss in November but are now slowly pulling ourselves back. Italy and Greece are at that point and I hope they too will pull themselves back. With the help of all of our partners in Europe, we can put ourselves back on track. Shouting our mouths off and coming up with crazy decisions is nonsensical.
When the speculators are back in six months, will the Deputy admit he was wrong?
The Chairman of the Joint Committee on Finance, Public Expenditure and Reform and I have discussed the idea of inviting the troika to appear before the committee to hear its views on what is happening and since no one else has looked for it to be democratically accountable to us, that might be a good start.
We must be realistic; in recent months the Opposition has been coming out with crazy stuff. I ask it for an idea of the consequences of the proposals made. I was on the Opposition side of the House as spokesperson on health and we always had to bring forward our own proposals and explain their consequences. It is not much to ask of the Opposition and it should do so.
Speaking on a topic that will impact on the country for the next two decades is a daunting prospect for all of us. For the first time since I was elected to the Dáil, I will forgo my role as a politician with party affiliations for the purposes of participating in this debate. Instead, I will talk across parties as one of the people whose feelings of hopeless despair I share. The issue is not one over which we should haggle like dogs with a bone, savaging the opposition and seeking dominance. It is time we came together on this dilemma and made collective decisions to shape the future of the country that all of us fought so hard to establish in so many ways.
Prior to the 2 November deadline, we all received huge numbers of emails; I received more than 1,000 in a few days. While obviously syndicated, these emails bore individual messages from people seeking a say in decisions relating to the process that would impact so adversely on their lives. Some of the messages were extremely emotional and struck a chord with all of us. The person who had witnessed a man committing suicide by jumping from a bridge painted a picture of despair that was almost too much to bear. This person was vividly portraying the human face of the destruction of lives. While it was highly emotive of one correspondent to refer to a betrayal of the nation, perhaps it is time for emotion. We coldly cut those lifelines to which so many citizens cling but think nothing of pouring money into rogue banks and their bondholders. Anglo Irish Bank should have been closed, as I said when the news broke in 2008, and I hold the same view today. Criminal proceedings should have been taken against those who appear to have been let off the hook. That is what people say to us, that those responsible for wrongdoing in the banking sector should be put behind bars and I want to see that happen in the lifetime of this Dáil.
Why is this? I suspect the answer is not completely linked with debt avoidance. What are the missing links? Few of us can understand the payment of our hard earned taxes to unsecured bondholders who are very wealthy. Talk of shoring them up is incomprehensible. A Harvard economist recently stated Ireland should not stretch out the bank process, saying we should not have death by a thousand cuts. He failed to comment, however, on the human consequences of the cuts. The Taoiseach shares the public dismay at the cost of honouring banking debts, considering the banks' role in the economic crisis. He is, however, constrained by the fact that part of our agreement with our external partners is not to allow any Irish bank, including Anglo Irish Bank, to default on debts to bondholders for fear of paralysing wider European markets.
The Government has adopted a determined approach based on the common goals we share with our partners in both the European Union and the IMF. This is seen as the only way to solve our problems and make progress. It is undeniable, but the pain and hardship caused to the old, the ill and the vulnerable are also undeniable. That cannot be dismissed.
The anger of taxpayers has focused on this aspect and it is legitimate. Many are very angry that the vulnerable are being hit again. We want to see fairness in the forthcoming budget in order that it will impact equally on all citizens. We must give up cronyism and looking after friends when budgets are announced. It is one thing to bail out our own country but quite another for people to understand why bondholders who took risks are being shored up for fear of destabilising European markets. To the average person, by placing ourselves in hock to the European Union, we took on not only an obligation to pay back our loans but also to protect the wider European Union at great personal cost. How much of this has been satisfactorily explained to citizens since 2008?
I am disturbed by the anonymity of bondholders. We can read in newspapers the names of those who were driven to commit suicide and engage in other acts of despair by the poverty imposed on them. We read about people whose homes have been repossessed or who cannot feed their families, while wealthy bondholders who take our money have the right to remain anonymous. I want to see their faces and names; I want them to explain why they think they have the right to cream off the hard-earned incomes of the people of Ireland if it is necessary to pay them off to appease European sensibilities. I want them to accept payment and then give the money straight back to the people of Ireland. I do not care whether they do so willingly or unwillingly.
There must be a way out of this mess and I am sure taxation could solve our dilemma. When it appears that there are no more moves remaining on a chess board, a grandmaster will always find a solution. We need such an individual in order to win the game we are currently playing. The Government is committed to closing Anglo Irish Bank at the earliest opportunity. While I am a member of a party which is part of the Government, I am conscious of the concerns of those who cry that we have closed the stable door after the horse has bolted. In this instance, the horse was loaded down with every cent possible and the stable has been left bare.
I apologise but I must interrupt the Deputy, whose time is exhausted. In fairness, he has been given a good opportunity to air his views.
A great deal of what can be said about this matter has already been uttered and I do not intend to repeat the comments of others. However, until Fine Gael and Labour begin to understand the position, we must continue to state that paying €74 billion in public money to nameless and faceless bondholders in respect of private debts is morally wrong. The figure of €74 billion is a conservative estimate. Some commentators believe the final cost could be as much as €90 billion. I will seek to put that into context because sometimes when we refer to billions, what we have to say goes over people's heads. The debt to which I refer is going to cost every man, woman, and child in the State over €16,000. Like most people, I struggle to understand the reasoning behind the Government's insistence on proceeding down the road it is on. To put this matter in simple terms, we cannot afford to repay the debt. When the Government eventually recognises that fact, we will be faced with the reality of considering what type of Ireland is going to emerge from the current crisis.
Previous speakers referred to the consequences of not paying the debt. Has anyone considered the consequences of our continuing to pay it? Perhaps the Government should explain those consequences to people. During the past two weeks, Members have been inundated with thousands of e-mails from people expressing their anger and dismay at the recent payment to bondholders. This is a matter to which the previous speaker referred. There was one particular e-mail which summed up exactly the feeling which exists among members of the public. In such circumstances, it is difficult to understand how members of the Government can keep a straight face when they state that they have a mandate to continue to do what they are doing. They went before the people earlier in the year and stated that they were going to do things differently. However, they have done nothing differently. In fact, they are continuing to do exactly what the Fianna Fáil crowd did before them. Nothing has changed.
Last April, the Government introduced what it described as a jobs initiative. It invested €135 million in that initiative but we do not know how many jobs were created. We are now facing into a budget in which there will be a reduction in capital spending to the tune of €750 million. The Department of Finance's figures indicate that this will have the effect of cutting approximately 7,500 jobs. It is, therefore, extremely difficult to understand the economic policy of the Government. I find it amusing when Members on the opposite side of the House state that our economic policies are off the wall. From my point of view, the only such policies which are off the wall are those of the Government because they are just not working.
I wish to address a point made by Deputy McCarthy of the Labour Party in respect of the bank guarantee. I understand the Deputy has trotted out the same speech for three successive Private Members' debates now. He continues to try to make political gains by referring to the bank guarantee and stating that Sinn Féin supported it. That is simply not true. The record on this matter is clear. The legislation which gave legal effect to the bank guarantee was passed in this House on 17 October 2008 and Sinn Féin voted against it. Those are the facts. I am not surprised that Deputy McCarthy has chosen to mislead the House. Having opposed the bank guarantee, it must be deeply embarrassing for him and his colleagues in the Labour Party to be part of a Government which is implementing that guarantee. Deputy McCarthy accused my colleague, Deputy Doherty, of donning the green jersey. I would much prefer to don the green jersey than to don the blue shirt worn by Deputy McCarthy and his party colleagues since last March.
Last week, the Government handed over €711 million in order to pay an unsecured, unguaranteed bond or bonds in Anglo Irish Bank. Media reports this morning indicated that the social welfare budget is to be cut by virtually the same amount. What the Government is literally doing is taking money out of the pockets of the poorest and handing it over to nameless gamblers. The promissory notes which are the subject of the motion — they were dreamed up by Fianna Fáil and have been odiously adopted by the current Government — must be either scrapped or drastically renegotiated at the very least.
The programme for Government contains a commitment to protect social welfare rates. As I have stated on numerous occasions, social welfare recipients should not pin much hope on that commitment because the Government has made another commitment to the EU and the IMF to the effect that it will reduce spending on social protection. Before she announced her cuts to the household benefits package and the fuel allowance in July, I pointed out to the Minister for Social Protection, at a meeting of the Joint Committee on Jobs, Social Protection and Education, the contradictions between these two commitments. She admitted that she could not stand over the Government's commitment to maintain social welfare rates. We will wait to see what happens a few weeks from now. I am of the view that the Government intends to remove €700 million from the social protection budget in order to recoup the money it threw away last week when it paid the unsecured, unguaranteed bond in Anglo Irish Bank.
The Government will use various methods — such as changing eligibility rules and cutting secondary benefits for those who are dependent on social protection — to recoup the money to which I refer. For example, thousands of carers throughout the country will be concerned that their half-rate allowance will be removed. The National Association of Widows in Ireland, NAWI, protested outside the gates of the Oireachtas today and its members are going to be worried about further social welfare cuts. Thousands of families that are dependent on welfare payments will be living in fear of losing supports relating to rent, fuel and school costs.
I call on the Minister for Finance and the Government to live up to their pre-election promise to protect the vulnerable by giving a commitment to remove the incomes of social welfare recipients from the budgetary process. Any cuts to social welfare payments will be counterproductive as well as immoral. Cuts of this nature ultimately mean that the social welfare bill will increase. That is the case because those in receipt of social welfare have less to spend and this results in further job losses and, consequently, longer dole queues. It is no surprise that the Government's medium-term fiscal statement revised employment projections downwards once again. That is the predictable and logical consequence of four years of austerity. If the Government continues to cut social welfare payments and supports, the chances of there being a revival in the context of job creation are extremely bleak.
There are important political decisions which the Government can and should make. In the first instance it should refuse to pay the promissory notes relating to Anglo Irish Bank and should use the money involved to retain social welfare payments and invest in job creation. Doing this would reduce the demand for social protection. A conservative estimate puts the total cost of repaying the promissory notes at €74 billion. That amounts to the entire social welfare budget for four years. When pressed on this matter by my colleague, Deputy Doherty, in June, the Minister for Finance claimed that he was trying to negotiate a rescheduling of these payments. However, no substantive negotiations have taken place on this issue and it was not even on the agenda for the most recent European Council meeting. It is clear the Government is not pursuing this matter effectively, forcefully, persistently or at the highest level because reports which emerged earlier today indicate that there is no process of negotiation in respect of it. A spokesman for the European Commission said he was not aware of it being raised by Irish officials at all. So much for the Minister negotiating. God love us if we are depending on the Minister to negotiate anything because he has failed miserably to date to have any major effect on the cost of debt in Ireland.
The German-born physicist, Albert Einstein, coined the phrase that insanity is doing the same thing over and over again and expecting different results. It is a quote that would aptly describe the Government's determination to press ahead with the failed policies of its predecessor and pay billions of euro of Irish taxpayers' money into a failed banking system.
The Anglo Irish Bank promissory note is a national scandal and one of the worst policy decisions to have come out of the banking crisis. It is estimated that by 2031, it will have cost Irish taxpayers at least €74 billion, with some economists believing the final amount could be as much as €90 billion — a lot of money, a lot of hard work and a lot of sweat and tears. A terrible burden is being placed on all our citizens and we are forcing future generations to shoulder the burden of massively flawed policies that were implemented by the previous Fianna Fáil-Green Party Government.
In February last, the majority of Irish people voted for real and meaningful change. They believed political parties and their candidates when they said they would reverse the awful policies of the outgoing Administration, and yet they got more of the same. Along with many others in this Chamber, I fought an election believing that there was a fairer and better way, and I still believe that.
It is insane for Fine Gael and Labour to continue to pay endless sums of money into toxic banks continuing the same policy over and over again and expecting different results. The next ten years will see Anglo Irish Bank getting €3.1 billion of Irish taxpayers' money. When additional interest payments are added, the total cost to the taxpayers rises to more than €74 billion.
This payout comes at a time when the Government admits that even if it implements all of its current policies without a hitch over the next three years, the most optimistic estimates suggest that at least 390,000 people will remain unemployed. How much more can working people and their families take? The three cornerstones of health, education and social welfare, on which any just and fair society is built, are being shredded by cut after cut.
The Government's growth estimates are continually being revised downwards, yet it continues to implement policies that are failing to regenerate the economy. They are also failing to create jobs and the promised stimulus that is needed to get our county out of this recession has not materialised.
We see the same bad policies that were pursued by the discredited Fianna Fáil-Green Party Government. Despite all of their pre-election rhetoric, Fine Gael and Labour have reneged on their promises to protect the rights of working people and, as a result, hard-pressed families are bearing the brunt of rising prices, cuts to essential services and having their disposable income slashed.
Sinn Féin has repeatedly proposed that the Government take a stand against the ECB-IMF and the unsecured bondholders. We believe a new deal can be negotiated even within the existing memorandum of understanding. The troika has already confirmed this is possible and it should also be remembered that the Anglo Irish Bank promissory notes and bonds are outside the scope of the memorandum of understanding.
Apart from the Government, the ECB and bondholders, few others believe such payments should be made to unguaranteed and unsecured bonds, especially when the Anglo Irish Bank bond of €715 million was sold at a discount. Despite this, the Government presses ahead with paying it out in full and the gamblers and the speculators rub their hands, unable to believe their luck.
The people voted for change but we have not seen it. "When did the debt become mine?", is what everyone — those in the Gallery and those at home — is asking. When did the debt become ours? I do not know anyone from my community who built up the debt. I suppose the question being asked at the end of this debate will be when it became our debt. Why is the taxpayer having to bail out these unsecured and unguaranteed bondholders? No one on the Government side has explained that to anyone at home. That is the big question people want answered because they are the ones who must suffer these cuts being implemented.
The ultimate question the Government needs to deal with in this motion is not whether it is dedicated to the EU, the euro or the European banking system, rather whether it is living in reality. Is the Government for real about creating a thriving economy and society which provides for the people? Is it serious about standing up for Ireland? Most of all, is it willing to deal with the cold hard facts and own up to the glaringly obvious, that this bailout has not worked, is not working and never will work? It is not even that it will not work for Ireland, but that it will not work for anywhere else either. We have been tied to a debt we cannot pay. It is as simple as that. Three years of austerity have left us with 450,000 unemployed, cuts to vital services and an unprecedented race to the bottom. This is not to say the solution is simple. That is another matter, but we can only get to where we need to go when the members of the Government have pulled their heads from the sand and remembered all the empty rhetoric they spouted in Opposition.
The bailout seeks to gift €47 billion to Anglo Irish Bank and to pay €28 billion back in interest from this loan. Shockingly, this is a conservative estimate of what this will cost. As my colleague, Deputy Doherty, said, it will cost every man, woman and child €16,157. It is the State's own NINJA loan and we will get nothing but more grief for it. The plan will bleed this money out of the people over the next 20 years to the detriment of the vulnerable, the sick and the young. The obscenity of the Government paying unguaranteed unnamed bondholders while the elderly are on trolleys, teachers' jobs are cut, children with special needs are neglected and the best and brightest emigrate or rot on the dole is hard to believe. It propagates this terrible idea that the markets come before the people and that pleasing those who created this mess is more important than tending to the rights of those who have given us their mandate. It makes a mockery of this House, and any words of concern uttered by the Government. The promissory note which was issued by the Fianna Fáil-Green Party Government and continues to wreak its havoc on the economy and the lives of the people was wrong then and certainly is no closer to being right today. It must be said repeatedly until the Government accepts this fact of which the majority of ordinary people in Ireland are aware and on which independent economists agree, that we cannot pay this debt and we should not attempt to do so for the sake of the country and its future.
The Government must be honest with itself, with Europe and with the people and tell them that this toxic debt is not ours to pay, is unpayable anyway, and withdraw the promissory note as soon as possible. It is high time the Government started to live up to its responsibility to the people who elected it, not to some perceived responsibility to the bankers and gamblers of the world. It is quite obvious to anyone who meets members of the public that the majority of them oppose this deal. They know it is wrong, they know it is unworkable and they do not want it. They are insulted by the prospect of facing further taxes and cuts to line gamblers' pockets, some of whom have only recently stuck their head in the trough to benefit from our troubles.
We need to solve this debt problem. We will not get any benefit from seeking to be the best boy in the class and cleaning up someone else's mess. The Government needs to stop talking about meeting Europe's targets and start talking about meeting the needs of the State and its people. I call on Members of the Government parties to support this motion. None of them sits here tonight wanting to play a part in the betrayal of their country and their people, but that is what the continuation of this policy is doing.
While the figures involved in the Anglo Irish Bank bailout are sometimes difficult to comprehend, it is nice to be able to put a human face on some of the beneficiaries. Although An Taoiseach was reluctant to divulge any of the senior bondholders' names to Deputy Adams last week, we know who they are. Among them are our good friends in Goldman Sachs. I say "good friends" because a good friend and former member of the Fine Gael Party, Mr. Peter Sutherland, is an employee of that prestigious firm. Not just any humble employee, either, but chairperson and managing director of Goldman Sachs International. Despite his connection with Fine Gael, in the spirit of good will Mr. Sutherland was asked by the previous Government to advise it on where cuts needed to be made so that his employers would get their money as quickly as possible. It is a convenient arrangement when one thinks about it.
The current Administration has continued to look after Goldman Sachs and other bondholders. Only last week and on behalf of children who have been deprived of their special needs assistants, SNAs, and other generous sections of our community, it selflessly handed over another massive sum of money to the bondholders. Yet some ungenerous people resent this. For example, Matt Taibbi of Rolling Stone magazine described Goldman Sachs as “a great vampire squid wrapped around the face of humanity”. It is an apt description. According to him, not only does Goldman Sachs thrive on economic misery, it has also helped to bring about many of the better known economic catastrophes of the past 100 years, including the 1929 stock market crash. It was up to its neck in the junk bonds, sub-prime mortgages and credit swaps that contributed to the more recent financial disasters. No coincidence, then, that it was attracted to our own disaster in Anglo Irish Bank.
While many millions of people have lost out as the Irish people are losing out, Goldman Sachs has thrived. Last year, it had a net profit of $8.4 billion and it currently controls assets worth $911 billion. While much of the world economy and many hundreds of millions of people globally have suffered, Goldman Sachs has managed a significant increase in earnings on the back of bailouts, including that of AIG in the United States, which earned Goldman Sachs $13 billion. Anglo Irish Bank has become a similar source of money for the vampire squid.
These are the sorts of people to whom we are told the Irish owe a "debt of honour". These are the people on whose behalf the citizens of this State have been indentured to a massive and unsustainable debt that is no more theirs than were the profits made by Anglo Irish Bank when it was up to its neck fuelling the scams and speculations of a corrupt and now bankrupt so-called elite.
Among the bondholders, too, is Aviva, which demonstrated its gratitude to the Irish people for picking up its gambling tab by announcing a few weeks ago that it was letting go 1,000 of its employees. Is anyone seriously claiming that the State, the Government and the Irish people have any moral obligation to Aviva? The Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, recognised as much last weekend when he stated that it was "excruciatingly difficult" to hand over the latest €700 million plus to Anglo Irish Bank but that the Government had no choice.
However, the Government has choices and we must make them. The Government's choices will determine the plight and misery of our people. Its choices to date have been disgraceful. It has pauperised a large part of our population and continues to do so, following in the footsteps of the previous Government. Given that more people are becoming unemployed, this is a disgrace. There is no moral or economic justification for the road the Government is travelling.
I have listened with great interest to the Government's terminology, particularly that used by the Minister for Finance, Deputy Noonan, in the House last night. According to the Government, this is a solemn sovereign agreement into which the previous Government entered on behalf of the Irish people. Therefore, even though the people overwhelmingly rejected the previous Government and elected a new one, we must honour this solemn sovereign agreement. The Minister's speech, which was handed to us last night, read: "I respectfully suggest that unilateral action or "gun boat diplomacy" will not serve the country's best interests". This is the Government's rationale.
Here I stand, a Teachta Dála for Donegal North-East. Sitting beside me is the Teachta Dála for Donegal South-West, Deputy Doherty. Along with other political, business, tourism and community representatives in the north west, he and I have campaigned for many years for equality in road infrastructure for our people. Motorways go from Dublin to Galway, Limerick, Cork, Waterford and Belfast. It is right that each of these regions is linked to the capital city, but 500,000 people in the north west are not linked to it. This injustice was to have been addressed under the solemn sovereign agreement made by the Government at St. Andrew's in 2006. Deputy Doherty and I were present at the time and understood that the agreement would be honoured. Today, we found out that the Government was walking away from the agreement unilaterally. Those opposite can call it "gun boat diplomacy" if they like, but it has a devastating impact on the people of our region.
In recent days, the Government paid €715 million to unsecured, unguaranteed bondholders, yet we do not know who they are. The leader of our country could not tell us who they were. In January, the Government will hand over a further €1.2 billion, some three times the contribution promised by the previous Government to the people of County Donegal and the north west as part of the peace process, a binding, international, solemn agreement.
Government Members are complete hypocrites. Their arguments in the House today have no credibility. When they all line up along the Government benches in approximately 30 minutes to do their duty as usual and vote with the Government, they will have no credibility in the eyes of the people of County Donegal, the north west and the Six Counties. The suggestion that this project should be pushed back five years is outrageous. I remind the Government that, with all of the hardship across the island, counties Donegal, Derry and Tyrone have the highest levels of unemployment and economic deprivation. We have no rail link with Dublin, never mind a motorway link. We will not wait the five years suggested by the Government, but ten years. How is that solemn sovereign agreement being honoured?
The Government will honour its agreements with bondholders, gamblers and hedge fund speculators who made 50% gains by believing it would not do what it claimed it would before the election in February, but it will renege on the people on this island who need help the most, the people of the north west who have endured these economic circumstances for many years. Government Members have no credibility in their arguments. The Sinn Féin motion should be passed and the Government should make a stand. I implore it to have consistency, courage and dignity at this stage.
I thank the Leas-Cheann Comhairle for the opportunity to address a timely and appropriate motion for the House. Despite the speeches, there is a fair degree of common ground on all sides of the House. We are all agreed that every effort must be made to reduce the cost to the Exchequer of the promissory notes. We are all agreed to various degrees that the State should, first, continue discussions with our international partners on how this reduction can be achieved and, second, not act unilaterally in this regard.
There is a clear recognition that the eurozone situation is evolving and that developments in this regard may provide opportunities for the State to revisit certain matters. As an independent State we have taken the initiative to deal with our problems. We have taken the hard decisions and we will take other decisions necessary to get the country back on track as quickly as we can. We must ensure, and our international partners must have regard to our need to ensure, that the debt burden of the State is fair and sustainable. This is in all our interests. The necessary adjustments to State expenditure have impacted and will impact on the level of services and the standard of living our people can enjoy.
The Government accepts that the impact of the adjustment must be fair and appropriate. It also accepts that it is galling to have to pump in State resources to support the financial sector. However, these actions are necessary. Our economy will not operate without a banking system. We need to return to the financial markets for funding, re-establish our financial credibility, return to growth and prosperity for the good of all our people and we need to do all of these things so as to exit the programme of financial assistance from the IMF-EU as soon as we possibly can. It is the historic task of the Government and all Deputies in the House to return this country to our independence and to get out of this programme as soon as we can.
As indicated yesterday by my colleague the Minister for Finance, Deputy Noonan, we are committed to looking at the promissory note to see what, if anything, can be achieved in terms of reducing the overall cost. However, two issues arise which need some clarification. The total cost of the note is €47 billion and not €70 billion to €90 billion as is being claimed. In simple terms, consider the promissory note as a mortgage; the cost of the promissory mortgage is principal plus interest, which is €30 billion principal and €17 billion interest. Therefore, the total cost of the promissory note mortgage is €47 billion.
There also appears to be some suggestion that it may be possible to ignore the promissory note and that it will go away, and that the central bank or ECB would continue to fund the institution to do the work out of the remaining loan book. I refer Deputies to the balance sheet of the bank in this regard. In the first instance, the Central Bank and the ECB are effectively funding the bank at present. If the promissory note is removed from the balance sheet, certain real consequences will flow. These are not imaginary consequences, they are real consequences which the proposers of the motion need to address honestly and not just forget about.
The gap must be filled on the asset side of the balance sheet and in the absence of this asset the bank would fail which would lead to immediate insolvency. This would require repayment of all amounts due under all contracts, even the guaranteed ones, and this would happen immediately. The Central Bank and the ECB would not be able to continue to fund the bank under their rules as the institution would no longer be a going concern or a licensed bank. The Central Bank and ECB funding of approximately €45 billion would have to be repaid. This €45 billion is predominantly State-backed and it would fall to the State to repay it. The assets of the bank would have to be disposed of in a fire sale scenario which would increase losses to the taxpayer immediately.
Therefore, with respect to colleagues, it is simply not realistic in the current environment to consider a default as an option or to assume that the Central Bank or the ECB would continue to fund the bank in circumstances described. The €110 billion liquidity we obtained from the ECB at a rate of 1.5% is the reality of the situation we face.
As indicated yesterday by the Minister, Deputy Noonan, we are eager to have the promissory notes redesigned in a better way for the State, for example by lengthening their maturity or reducing the interest rates on them or both. Discussions have commenced with the relevant authorities at a technical level but as yet there is no indication of a successful outcome. On behalf of the country and its people we will continue to fight for the best deal. With the continued support of this House, the Government will achieve its objectives in the teeth of the most volatile and difficult economic environment in a generation. Brick by brick and step by step progress is being made. Our plan is clear. Success is not guaranteed but working with our international partners and all Deputies and political parties in the House we can get the country to a better place. I commend the counter-motion to the House.
I wish to share time with Deputy Peadar Tóibín.
The usual practice at this stage in Private Members' business is for the proposers of the motion to rebut points made by the Government side yesterday and today. However, I would begin by wholeheartedly endorsing something stated yesterday by a Government Deputy, Peter Mathews, who stated:
I wish to give the Minister every support in putting the stone in the slingshot, aiming it and ensuring it hits Goliath between the eyes in order that he might wake up. The Goliath to which I refer in this context is our European partners.
Well done. I wish the Deputy luck because he will need it in his endeavour to turn the Government into a David fighting against the EU Goliath. The problem is that, like all its predecessors, the Government has a fawning, submissive attitude to the EU institutions and to the big players who call the shots in Europe. The record shows that since 1972 Fine Gael, the Labour Party and Fianna Fáil have been unquestioning yes-men and women, content to go along with every step in the erosion of Irish economic sovereignty. Remember, that sovereignty was already seriously undermined before the IMF-ECB-EU troika rode into town and flattened it altogether.
Our EU partners regard the political establishment in this State as a complete push-over. After all, these three parties all united to overturn the will of the people as expressed in referendums on two EU treaties, namely, the Nice and Lisbon treaties. In both cases the people voted "No" and then were faced with a campaign of brow-beating and scare-mongering, including threats of expulsion from the EU, if they did not reverse their decision and vote "Yes".
However, Fine Gael and Labour had a golden opportunity to leave behind this legacy, open a new chapter and send a clear signal to our EU partners when they were elected last February. Let there be no mistake about this. Armed with an electoral mandate that any Government would envy, they could and should have gone to their EU partners and done exactly what Sinn Féin proposes in this motion. They should have made clear that their mandate was to unburden the Irish people of the Anglo Irish Bank debt.
Not only do I find common sense of the proportion of all of this with Deputy Mathews. Deputy Costello of the other Government party stated yesterday that many in the Labour Party in their hearts favour what Sinn Féin proposes. I would say many of them would also favour it in their heads and this is very important because they know what Sinn Féin proposes is the right thing to do. It is the sensible course and the only course if people are not to be burdened with intolerable debt for many years to come.
As the motion states, the Taoiseach and the Minister for Finance should immediately enter discussions with the ECB to have the promissory note withdrawn and to remove the toxic private bank liability from the State and the taxpayer. The Government should seek support from our EU partners in this because it is the only way to reduce our debt to GDP ratio to manageable levels.
The people have every right to expect that Fine Gael and the Labour Party would have taken this course already. Prior to the general election they were told by Fine Gael that paying billions of euros to Anglo Irish Bank bondholders was obscene; this was their language They were also told it would be Labour's way or Frankfurt's way.
It is still not too late for the Government to change course. I will close with these words which are sincerely expressed. The Government has been in office for only nine months. I use this opportunity to appeal to it to do the right thing, to choose the national interest and not the bondholders' interest and to choose a road to economic recovery and not a road to deeper recession, mass unemployment and poverty. This Government would have the overwhelming support of the Dáil and of the people across the State if it was to do the right thing now. I urge the Government to grasp the nettle, withdraw the amendment, accept the Sinn Féin motion and vote accordingly.
Over the past 48 hours we have listened to a number of important contributions. Strangely, there has been a certain level of consensus on the debate but not on the primary issue. No one has said that the promissory notes are a good thing and no one has said that continuing to hand over money to bondholders and failed banks is a good thing. Few have disagreed with the figure in the region of €74 billion. The Minister of State erroneously claimed it would add up to €47 billion. If we had it in the bank, €47 billion would pay for it but, due to the amount of money that must be drawn down, the sum accumulates to €74 billion in the long run. No one has disputed that it will take 20 years to pay off the debt associated with this bank. No one has said that money is better paid to the bondholders rather than to create jobs, build schools or employ doctors, nurses, gardaí, or teachers. From talking to them in the corridors, it appears that Government Deputies do not believe this is the right thing to do but, unfortunately, they are holding the Government line on this and are continuing to allow the Government to pay this debt.
The Government is faced with zero sum options. Does it prioritise the people or the speculating bondholders of private banks? It cannot do both. On one side, it is pumping billions into the pockets of bondholders. My colleague, Deputy Pearse Doherty, estimated it to be €16,157 per man, woman and child in this State. By the Government's estimate, 390,000 people will be unemployed by 2015 while 450,000 people are unemployed at present. Some 70,000 people are forced to emigrate annually. In whole swathes of this State, the so-called GAA generation has been erased. This Government, like those before it, is cynically using emigration as a safety valve for its economic policies.
Public services have been undermined and class sizes have been increased. Investment in first, second and third level education is being reduced. Many of the State's competitive advantages are being eroded. Health service waiting lists are lengthening and some people are being driven to early graves owing to the despair caused by these policies. The number of gardaí is being reduced. Low and middle income earners are being put to the pin of their collars and beyond because of the Government's flat taxes.
Vital parts of our national infrastructure will be sold, resulting in lower levels of investment, higher costs to the people and future profits being diverted to private pockets. Whole sections of our towns and cities are morphing into ghost towns, with dereliction and empty shopfronts replacing vibrant communities. All of these negative outputs are symptoms of this Government's decision to prioritise toxic banks over Irish people. The bailout of private bondholders and its associated austerity is the biggest threat to the Irish economy and people.
Some on the Labour Party benches have made much of their opposition to the initial bank guarantee and told untruths about Sinn Féin's position on the guarantee. Let us be clear that the Minister for Finance has stated that the decision that gave weight to the bailout happened on 17 October 2008. The record clearly shows that both Labour and Sinn Féin voted against the Bill on that day.
The history books will be clear on this economic catastrophe. Fianna Fáil, Fine Gael, Labour and the Green Party are the only parties that bailed out unguaranteed, unsecured bondholders. In Opposition, the Labour leader accused the former Taoiseach of economic treason. He said "if the Taoiseach's Government knew Anglo Irish Bank was insolvent and ... asked the Irish taxpayers to bail it out and to pay the cost we are now paying for it, that was and is economic treason". This Government knows that Anglo Irish Bank is insolvent yet it forces the Irish people to pay the bill. The Labour Party, by its own charge, is engaged in economic treason.
The most insipid response has been that there is nothing we can do about this because it is an agreement with the troika. Some stated during this debate that the Government inherited the mess but this Government received a massive mandate for change last February. This Government is not bound by the agreements of previous Governments.
There is real and palpable anger throughout Ireland over what this Government has done. Often, backbenchers wring their hands and shake their heads but Government back bench Deputies hide behind their Ministers and the Whip. In my county, Fine Gael and Labour Deputies voted to impose a levy on the pensions of former Tara Mines workers which will reduce their pensions by one month's income every year. At the same time, the Government is putting €700 million into the pockets of speculators who bought bonds on the secondary market for a fraction of the price we paid in the end.
I ask people up and down this State to contact a local Deputy who is individually responsible for the damage being done to this State. Let local Deputies be in no doubt as to the damage they are wreaking on families and that they know what people will do in future. This Government should deliver on its pledges during the election or it should seek a new mandate based on its new priorities.
The Government claims it has no choice, yet it has abdicated leadership to France and Germany. The herd mentality throughout Europe is contributing to the ratcheting up of this crisis. Today, Italian bonds crossed the 7% unsustainable red line that was earlier crossed by Greece, Ireland and Portugal and brought EU and IMF intervention. The fallacy that debt write-down is impossible has been exposed by the Greek deal. Today we have a banktocracy, as it were; a situation whereby Irish citizens are allowed fail but banks are not.
There is an alternative. We need proper stress tests throughout Europe, with all toxic derivative debt and sovereign debt being fully analysed. We need to separate sovereign from commercial debt. Commercial debt needs to be dealt with in a commercial way. It happens every day in every other sector. Investors have already hedged against the losses they expect from this type of solution. We see this in their sales of bonds at a fraction of the prices at which the Government is paying them back.
At an EU level, EU nations need to work together as equal partners and not subjects to the big two, who are appealing to their internal electorates. The ordinary citizen in the other 25 member states needs to be represented. We need to stop recapitalising bad banks. They are black holes as we know only too well in this State. Some banks will have to close. The ECB should be lender of last resort and they should recapitalise. A real investment stimulus is necessary in this State to provide jobs and confidence. I urge Fine Gael and Labour Deputies not to continue with policies that are causing destruction to the Irish economy and to support the Sinn Féin Private Members' motion.
Amendment put.
The Dáil divided: Tá, 94; Níl, 47.
Tá
- Bannon, James.
- Barry, Tom.
- Breen, Pat.
- Broughan, Thomas P.
- Burton, Joan.
- Butler, Ray.
- Buttimer, Jerry.
- Byrne, Catherine.
- Byrne, Eric.
- Carey, Joe.
- Coffey, Paudie.
- Conaghan, Michael.
- Conlan, Seán.
- Connaughton, Paul J.
- Conway, Ciara.
- Coonan, Noel.
- Corcoran Kennedy, Marcella.
- Costello, Joe.
- Coveney, Simon.
- Creed, Michael.
- Creighton, Lucinda.
- Daly, Jim.
- Deasy, John.
- Deenihan, Jimmy.
- Deering, Pat.
- Doherty, Regina.
- Donohoe, Paschal.
- Dowds, Robert.
- Doyle, Andrew.
- Durkan, Bernard J.
- English, Damien.
- Farrell, Alan.
- Feighan, Frank.
- Fitzpatrick, Peter.
- Flanagan, Charles.
- Flanagan, Terence.
- Griffin, Brendan.
- Hannigan, Dominic.
- Harrington, Noel.
- Harris, Simon.
- Hayes, Brian.
- Hayes, Tom.
- Heydon, Martin.
- Howlin, Brendan.
- Humphreys, Heather.
- Keating, Derek.
- Keaveney, Colm.
- Kehoe, Paul.
- Kelly, Alan.
- Kenny, Seán.
- Kyne, Seán.
- Lawlor, Anthony.
- Lynch, Kathleen.
- Lyons, John.
- McFadden, Nicky.
- McHugh, Joe.
- McLoughlin, Tony.
- McNamara, Michael.
- Maloney, Eamonn.
- Mathews, Peter.
- Mitchell O’Connor, Mary.
- Mulherin, Michelle.
- Murphy, Dara.
- Nash, Gerald.
- Naughten, Denis.
- Neville, Dan.
- Nolan, Derek.
- Noonan, Michael.
- Nulty, Patrick.
- Ó Ríordáin, Aodhán.
- O’Donnell, Kieran.
- O’Donovan, Patrick.
- O’Mahony, John.
- Penrose, Willie.
- Perry, John.
- Phelan, Ann.
- Phelan, John Paul.
- Rabbitte, Pat.
- Reilly, James.
- Ring, Michael.
- Ryan, Brendan.
- Shatter, Alan.
- Sherlock, Sean.
- Shortall, Róisín.
- Spring, Arthur.
- Stagg, Emmet.
- Stanton, David.
- Timmins, Billy.
- Tuffy, Joanna.
- Twomey, Liam.
- Varadkar, Leo.
- Wall, Jack.
- Walsh, Brian.
- White, Alex.
Níl
- Boyd Barrett, Richard.
- Browne, John.
- Calleary, Dara.
- Collins, Joan.
- Collins, Niall.
- Colreavy, Michael.
- Cowen, Barry.
- Crowe, Seán.
- Daly, Clare.
- Doherty, Pearse.
- Donnelly, Stephen.
- Dooley, Timmy.
- Ellis, Dessie.
- Ferris, Martin.
- Flanagan, Luke ‘Ming’.
- Fleming, Tom.
- Grealish, Noel.
- Halligan, John.
- Healy, Seamus.
- Healy-Rae, Michael.
- Higgins, Joe.
- Kirk, Seamus.
- Kitt, Michael P.
- Mac Lochlainn, Pádraig.
- McConalogue, Charlie.
- McGrath, Finian.
- McGrath, Mattie.
- McGrath, Michael.
- McGuinness, John
- McLellan, Sandra.
- Martin, Micheál.
- Moynihan, Michael.
- Murphy, Catherine.
- Ó Caoláin, Caoimhghín.
- Ó Cuív, Éamon.
- Ó Fearghaíl, Seán.
- Ó Snodaigh, Aengus.
- O’Brien, Jonathan.
- O’Dea, Willie.
- O’Sullivan, Maureen.
- Pringle, Thomas.
- Ross, Shane.
- Smith, Brendan.
- Stanley, Brian.
- Tóibín, Peadar.
- Troy, Robert.
- Wallace, Mick.
Tellers: Tá, Deputies Emmet Stagg and Paul Kehoe; Níl, Deputies Aengus Ó Snodaigh and Seán Ó Fearghaíl.
Amendment declared carried.
Amendment No. 1 not moved.
Question put: "That the motion, as amended, be agreed to."
The Dáil divided by electronic means.
Given that some people forgot to vote and the colossal amount of money involved — some €74 billion — and its potential to bankrupt the State, I am calling for a vote by other than electronic means.
Question again put: "That the motion, as amended, be agreed to."
The Dáil divided: Tá, 94; Níl, 48.
Tá
- Bannon, James.
- Barry, Tom.
- Breen, Pat.
- Broughan, Thomas P.
- Burton, Joan.
- Butler, Ray.
- Buttimer, Jerry.
- Byrne, Catherine.
- Byrne, Eric.
- Carey, Joe.
- Coffey, Paudie.
- Conaghan, Michael.
- Conlan, Seán.
- Connaughton, Paul J.
- Conway, Ciara.
- Coonan, Noel.
- Corcoran Kennedy, Marcella.
- Costello, Joe.
- Coveney, Simon.
- Creed, Michael.
- Creighton, Lucinda.
- Daly, Jim.
- Deasy, John.
- Deenihan, Jimmy.
- Deering, Pat.
- Doherty, Regina.
- Donohoe, Paschal.
- Dowds, Robert.
- Doyle, Andrew.
- Durkan, Bernard J.
- English, Damien.
- Farrell, Alan.
- Feighan, Frank.
- Fitzpatrick, Peter.
- Flanagan, Charles.
- Flanagan, Terence.
- Griffin, Brendan.
- Hannigan, Dominic.
- Harrington, Noel.
- Harris, Simon.
- Hayes, Brian.
- Hayes, Tom.
- Heydon, Martin.
- Howlin, Brendan.
- Humphreys, Heather.
- Keating, Derek.
- Keaveney, Colm.
- Kehoe, Paul.
- Kelly, Alan.
- Kenny, Seán.
- Kyne, Seán.
- Lawlor, Anthony.
- Lynch, Kathleen.
- Lyons, John.
- McFadden, Nicky.
- McHugh, Joe.
- McLoughlin, Tony.
- McNamara, Michael.
- Maloney, Eamonn.
- Mathews, Peter.
- Mitchell O’Connor, Mary.
- Mulherin, Michelle.
- Murphy, Dara.
- Nash, Gerald.
- Naughten, Denis.
- Neville, Dan.
- Nolan, Derek.
- Noonan, Michael.
- Nulty, Patrick.
- Ó Ríordáin, Aodhán.
- O’Donnell, Kieran.
- O’Donovan, Patrick.
- O’Mahony, John.
- O’Reilly, Joe.
- Penrose, Willie.
- Perry, John.
- Phelan, Ann.
- Phelan, John Paul.
- Rabbitte, Pat.
- Ring, Michael.
- Ryan, Brendan.
- Shatter, Alan.
- Sherlock, Sean.
- Shortall, Róisín.
- Spring, Arthur.
- Stagg, Emmet.
- Stanton, David.
- Timmins, Billy.
- Tuffy, Joanna.
- Twomey, Liam.
- Varadkar, Leo.
- Wall, Jack.
- Walsh, Brian.
- White, Alex.
Níl
- Boyd Barrett, Richard.
- Browne, John.
- Calleary, Dara.
- Collins, Joan.
- Collins, Niall.
- Colreavy, Michael.
- Cowen, Barry.
- Crowe, Seán.
- Daly, Clare.
- Doherty, Pearse.
- Donnelly, Stephen.
- Dooley, Timmy.
- Ellis, Dessie.
- Ferris, Martin.
- Flanagan, Luke ‘Ming’.
- Fleming, Sean.
- Fleming, Tom.
- Grealish, Noel.
- Halligan, John.
- Healy, Seamus.
- Healy-Rae, Michael.
- Higgins, Joe.
- Kirk, Seamus.
- Kitt, Michael P.
- Mac Lochlainn, Pádraig.
- McConalogue, Charlie.
- McGrath, Finian.
- McGrath, Mattie.
- McGrath, Michael.
- McGuinness, John.
- McLellan, Sandra.
- Martin, Micheál.
- Moynihan, Michael.
- Murphy, Catherine.
- Ó Caoláin, Caoimhghín.
- Ó Cuív, Éamon.
- Ó Fearghaíl, Seán.
- Ó Snodaigh, Aengus.
- O’Brien, Jonathan.
- O’Dea, Willie.
- O’Sullivan, Maureen.
- Pringle, Thomas.
- Ross, Shane.
- Smith, Brendan.
- Stanley, Brian.
- Tóibín, Peadar.
- Troy, Robert.
- Wallace, Mick.
Tellers: Tá, Deputies Emmet Stagg and Paul Kehoe; Níl, Deputies Aengus Ó Snodaigh and Seán Ó Fearghaíl.
Question again declared carried.
The Dáil adjourned at 9.35 p.m. until 10.30 a.m. on Thursday, 10 November 2011.
