Wednesday, 14 March 2012
Dáil Éireann Debate
Deputy Micheál Martin: In the past few weeks there have, to say the least, been mixed messages from the Government in regard to Ireland’s obligations on the promissory note issue. As the Taoiseach knows, the promissory note mechanism was created and agreed as banks were not allowed to fail. Depositors needed to be protected and no other European Union facility existed at the time to facilitate the recapitalisation of banks.
There is no doubt that fairness and justice require Ireland gets a fairer deal on the restructuring of its bank debt. However, in the past number of weeks up to six Government Ministers, including the Taoiseach, have been to the fore in upping the stakes and raising expectations. Most notable was the intervention of the Minister for Social Protection, Deputy Joan Burton, in the Financial Times where she clearly linked a deal on the promissory note to the forthcoming referendum. Whether the Taoiseach likes it, that link has now been embedded in the public mind because of that intervention and those of others.
There is no doubt the ECB read the article with considerable interest. The Minister for Communications, Energy and Natural Resources, Deputy Pat Rabbitte, told The Wall Street Journal some time ago that a deal would be struck in the next few weeks and before the repayment deadline of 31 March. Media reports, undoubtedly led by Government sources, have referred to the Government still being hopeful of a deal on the promissory note before the end of March.
Yesterday, Commissioner Olli Rehn very unambiguously said such a move would be unacceptable. His stance mirrors that of the ECB, it would appear, which is also resisting any delay in payment. We were led to believe that the Governor of the Irish Central Bank would raise the issue with the ECB, only to be told afterwards it would not. The Taoiseach uses what has become a well worn phrase, namely: “Paddy likes to know.” With the greatest of respect, Paddy does not know what is going on in regard to this issue.
Deputy Micheál Martin: Could the Taoiseach confirm to the House what exactly he has been looking for? Has the Government formally sought a deal that would involve, for example, extending the obligation over 30 years? Is it seeking a write-down of the money owed to the Irish Central Bank? I ask the Taoiseach to answer those basic questions. Can he confirm that the commentary by the Minister, Deputy Burton, in the Financial Times led to the ECB pulling down the shutters on any deal on this issue? Can he confirm to the House that the Government will pay the money due on 31 March?
The Taoiseach: What is required is a period of calmness and patience. As the Deputy is aware, I have been very clear from the outset. The troika, in its analysis of Ireland meeting its conditions of the memorandum of understanding, undertook to provide a troika paper in regard to the promissory note and its consequences. Discussions have been ongoing with officials for quite some time in the troika. It is a complex and technical issue. There are quite a number of moving parts.
I have been clear to the Deputy, in respect of his questions, that there is a requirement to allow negotiations to proceed. I have never set a timeline on them. The matters under discussion are completely separate from the fiscal stability treaty in respect of which the people will be asked to vote in due course. I always take the view, as I am sure the Deputy does, that when negotiations about a matter as sensitive and complex as this are ongoing they should be allowed to run their course. For that reason I have been very careful not to raise expectations, insert time limits or stray outside the confines of what is being negotiated.
I have noted the comments made. The Deputy can take it from me that the Government has sought greater flexibility in respect of the legacy debt it and our people inherited in the negotiations. It is for that reason that the negotiations are ongoing. Deputy Martin is also aware that not only has Ireland met all its conditions but has exceeded them in a number of areas.
Deputy Micheál Martin: The Taoiseach did not answer the question I asked. Has the Government formally sought a deal that would involve extending the obligation over 30 years or is it seeking a write down of the money owed to the Irish Central Bank? It is technical, complex and sensitive, but boils down to that fundamental question.
The Opposition cannot be accused of raising expectations. The only people who have raised expectations are Government Ministers competing with each other on what this is about, what will happen before the end of March and linking it to the fiscal compact treaty. No one on this side of the House has raised expectations. Cabinet Ministers are speaking left, right and centre to whoever will listen to them and are saying different things about a deal being imminent.
With the greatest of respect, I do not believe the Taoiseach needs me to tell anybody here to calm down. Perhaps he should tell his Cabinet members to speak with one voice if it is his view that negotiations should be allowed to run their course. He should say this to his Ministers.
The Taoiseach: Let me say as Head of Government and Taoiseach that Ireland is involved in negotiations within the troika in respect of the promissory notes because of the scale of the legacy debt. I am not going to tell the House the particular issues that arise or the nature of the discussions taking place because the negotiations are far too sensitive and technical, and they are very complex.
Deputy Micheál Martin: The Government is telling everybody else, however. Every morning on the front page of The Irish Times, the Irish Independent and the Irish Examiner, Ministers are saying, “Here is the deal.”
The Taoiseach: Suffice it to say that what we made very clear is that we want greater flexibility shown to Ireland and its citizens in respect of the legacy we inherited from the crowd on the other side of the House.
The Taoiseach: In that regard, there are discussions taking place as a result of an initiative taken by the troika comprising the IMF, the European Central Bank and the European Commission to produce a paper on the question of flexibility in regard to Ireland and the promissory notes.
The Taoiseach: The officials engaged in the troika negotiations deserve the opportunity to be allowed to continue, in a spirit of patience, such that we can arrive at a position where Ireland can have greater flexibility shown to it. By that, I mean we have made it clear that a longer period and a lower interest rate would be of enormous importance to Ireland in terms of its deficit and capacity to pay back its debts.
The Taoiseach: I have made the point that Ireland has always met its commitments. As was recognised internationally, we exceeded them in some cases. A period of calmness, understanding and patience is required. The negotiations are ongoing and I, as head of Government, want them to continue. They are complex, technical and very important.
Deputy Gerry Adams: I assure the Taoiseach at the outset that I am very calm, just in case he is concerned. Last evening, Commissioner Rehn told the Taoiseach bluntly, despite all the Government’s leaks and spin, that Ireland must pay the €3.1 billion promissory note in two weeks. He arrogantly claimed that respecting commitments and obligations is a key tradition under EU law. Since when? This law was never applied to France or Germany which, year after year, regularly breached their Stability and Growth Pact rules. French and German leaders stand up for themselves and their people, just as the Spanish Prime Minister did.
The Taoiseach will not do this. He acquiesces at every turn and expects Irish citizens to pay for his folly. He is very clear about this, and this is evident from stealth taxes, cuts, VAT increases, septic tank charges and the household charge. He insists that the Irish must pay for the greed of bankers and developers, irrespective of the social consequences. The €3.1 billion the Taoiseach will pay at the end of this month is the equivalent of 19 years’ worth of household charges. It could create jobs and stop young people from emigrating. It works out at approximately €688 for every man, woman and child in the State this year. We cannot afford it. Why does the Taoiseach not start a real negotiation? If he does not ask, he will not receive. He should tell the ECB now that he will not and cannot pay the €3.1 billion.
The Taoiseach: That is why we already acquired an extra year in which to meet our target of reducing borrowing to 3%. This is why €10 billion in savings were brought about for the taxpayer by the interest rate reduction.
The Taoiseach: We are well able to stand up for ourselves. In the context of the process — we are democrats, as the Deputy is aware — it is important that we allow the ongoing negotiations which were initiated by the troika to conclude. I am not entering this House to be drawn into circumstances that would have me stray outside that remit. We know what is important, as does the Deputy and everyone else. We have made the point quite openly——
The Taoiseach: ——that it would be an encouragement arising from the troika’s initiative if flexibility in respect of the promissory notes, which are a legacy debt to our people, were brought about. To achieve that, there is a need for discussions and negotiations. Those negotiations have been under way for some time. From that perspective, I want the officials and personnel on all sides who are dealing with the matter to be allowed to do their work.
Deputy Gerry Adams: The Taoiseach says this is about terms and conditions and not about a write-down. In other words, he is going to pay the €3.1 billion; it is just a question of the period over which he pays it and the number of generations who will have to put up with it.
The Taoiseach said the negotiations are detailed and technical, as if we did not understand what the negotiations are like. Last night, the Minister for Finance, Deputy Noonan, stated the promissory note did not feature on the agenda at this week’s Finance Ministers’ meeting and will not feature at the next one. The elephant in the room is that Irish citizens are paying for the greed of Anglo Irish Bank, big bankers and developers. The Taoiseach keeps saying this is how it must be and that we never looked to a debt write-down. I did not get this but got it after having listened to the Taoiseach. He will not get a write-down because he is not looking for one. Tá an Taoiseach ar an slí mhícheart agus ar an taobh mícheart. Tá a fhios aige go bhfuil slite eile ann, ach tá sé ag glacadh rogha. Níl an t-airgead againn.
Deputy Gerry Adams: He is defaulting on his office as Taoiseach and his responsibility to the people of this State and island. He needs to say very loudly and clearly that we will not pay and cannot do so. He will then see a real negotiation.
The Taoiseach: No. The Deputy keeps harping on about investing the national pension reserve fund and all the moneys of the European Investment Bank in his own hare-brained schemes to sort out Ireland, but this would ruin Europe and the whole lot of us together.
The Taoiseach: The troika, comprising the IMF, the European Commission and the European Central Bank, undertook to produce a paper on flexibility being shown to Ireland in regard to the promissory notes. To achieve anything in this regard, negotiations and discussions have to take place. It is only right and proper that all the personnel involved in the discussions be allowed to do their work.
The Minister for Finance, Deputy Noonan, was at an ECOFIN meeting. All the representatives of the troika do not sit around the tables discussing questions raised by the Minister for Finance at such meetings. The Minister for Finance, Deputy Noonan, is perfectly correct when he meets with his colleagues from all sides around that table in bilateral discussions and comments that take place. That is not the forum of the troika where all the discussions take place. Deputy Adams will understand that bilateral discussions between Ministers are always very important. However, the personnel in these discussions involve a much broader group than just the Finance Ministers.
This country has had five intensive analyses by the troika in respect of the memorandum of understanding. We have achieved renegotiation of elements of that memorandum such as the minimum wage, the interest rate and the period to reduce the debt to 3%. These are questions with which the troika agreed with Ireland. For instance, if the Government decides to sell State assets at an appropriate time for an appropriate amount, then 33% of that can be used for investment in job creation and sustainable employment.
In the same manner, the discussions on the paper undertaken by the troika are ongoing. I have never set a time limit on these. I have never tried to raise expectations about their conclusion. I understand that people who are given a responsibility should be allowed to conduct it in respect of their negotiations. Ireland is conscious of the fact that the flexibility shown to us in respect of the deficit and our repayments of our debt will be of great encouragement to our people. I have never tried to raise expectations or enforce a time limit here.
Deputy Shane Ross: I see this problem with the Anglo promissory notes as symptomatic of something even more fundamental. Yesterday, when the EU Commissioner, Olli Rehn, was asked about the promissory notes, he embarked upon a kind of lecture to us and the rest of Europe about our obligations. First of all, the Taoiseach should tell the Commissioner that we are not given to taking lectures from him. He said each and every member state respects the commitment it has undertaken and this is valid in the case of Ireland as well. He went on to tick us off in Latin, no less, about our obligations. Before he breaks into Latin, I suggest he should brush up on his Greek.
Deputy Shane Ross: The danger I see is that when we are entering the fiscal treaty, we are entering into a kind of à la carte Europe in which the big countries and the malingerers will be allowed to pick and choose where they will breach the treaty and where they can make exceptions while Ireland and Hungary will be at the poor man’s table — the table d’hôte. We are going to do what we are told by Olli Rehn. It was patronising of him to speak to Ireland in that way yesterday after what the Taoiseach has done. The Taoiseach is the most compliant leader in Europe.
Deputy Shane Ross: Is the Commissioner privy to these negotiations? Does he know what is going on or is he just giving a general overall lecture to the Taoiseach and other members of the European Union on our long-term obligations?
The Taoiseach: Spain has to comply with the 3% rule by the end of next year. Ireland was given an extra year from the end of 2014 to the end of 2015. The Commissioner, Olli Rehn, was speaking in regard to Hungary, Spain and Greece. He holds the same status as every other Commissioner. Ireland’s Commissioner Máire Geoghegan-Quinn represents the Commission at the same level.
Deputy Ross referred to Latin, Greek and Spanish. He should always remember the old Gaelic tongue was one of the prime languages of Europe in ancient times. It has an old saying which is important for everyone to remember when negotiations are under way: Is binn béal ina thost.
Deputy Shane Ross: The Taoiseach is good at giving no answers to any of the questions asked. On the promissory notes, does the Taoiseach stand behind the statements made by two of his Ministers that these promissory are relevant to the referendum? Does he stand by the statement by a Labour Minister that there will be delivery on the promissory notes by 31 March?
Deputy Shane Ross: I read what the Minister said on that issue into the record of the House. He said there would be delivery by 31 March. Deputies opposite can read the record themselves. If they were not here in the Chamber at the time, that is not my problem.
Deputy Shane Ross: Will the Taoiseach tell us whether the Cabinet is in line about this 31 March deadline? It is important because the nation is watching to see if the Taoiseach delivers before that date on some alleviation of the debt or the promissory notes.
I speak for the Government here. The Government has never set a deadline nor raised expectations. It is involved through personnel, both at official level and through the independent Central Bank, with the IMF, the ECB and the European Commission in regard to the negotiations arising from the initiative of the troika. I have no intention of raising any expectations. There was never a timeline set by the Government on this. I understand these negotiations are ongoing and that they are complex and technical. As Head of Government, I expect the personnel on all sides involved in these discussions to be allowed to do their jobs without interference. That is their remit and responsibility. There is no timeline or expectations but an understanding that Ireland wants to be involved——
The Taoiseach: ——in bringing about a situation where we can get a conclusion with flexibility. In that regard, these discussions and negotiations continue. Deputy Ross should understand that as Head of Government I am not raising expectations or forcing time limits. His comments in that regard are irrelevant.
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