Thursday, 20 May 2010
Seanad Eireann Debate
When we spoke on Second Stage earlier, we said we should consider a new way of doing business. The Government should be as open as possible in responding to this House, not just with regard to this Bill but in many other aspects of budgetary decisions that are being made and will be made in the coming years. It is important the House is kept well informed and is aware of what is happening with regard to this legislation.
There are obvious pitfalls in this bailout of Greece. The Minister stated in his speech earlier that the cornerstone of Greek policy would be budget cuts to reduce its deficit to below 3% by 2014. We have made similar statements with regard to our own budget. Greece is intending to make budget cuts of €30 billion over that time. This is a considerable amount, even in an economy the size of Greece’s. It intends to have a budget surplus of 5% after a decade. These are significant targets that must be reached by the Greek Government over the next couple of years in order to fulfil the terms of the agreement it has made with the other eurozone countries.
Ireland has set similar targets for ourselves, but they will be difficult to attain. Our current deficit is greater then we expected. It is important that the House be kept informed on a regular basis of our progress in moving towards these targets over the next couple of years. That is the basis of most of these amendments. The Minister indicated in the Dáil that he would take these points into consideration. Perhaps the Minister of State would like to respond.
Minister of State at the Department of Finance (Deputy Dara Calleary): As Senator Twomey said, this is a similar amendment to those proposed by his colleagues Deputies Bruton and O’Donnell. The Minister, Deputy Lenihan, indicated he would give further consideration to the matter. He intends to look at the feasibility and possible merits of more frequent reporting, for example, on a six-monthly basis. Further legislation on our present undertakings will be necessary; a Bill will be introduced shortly to deal with the European financial stabilisation mechanism. The wider financial stabilisation arrangements were reported by the ECOFIN council on 9 May. This will be an opportunity to consider the reporting provisions and, if appropriate, provide for more frequent reporting in the context of that legislation. We are exactly on course to reach our own budgetary targets in terms of revenue and expenditure, as was predicted in the budget.
Senator Alex White: The amendments make a lot of sense. A quarterly basis report from the European Commission to the lenders will be available in any event. The rationale behind the Fine Gael amendments is that the Minister should use this as a benchmark for reporting to the Oireachtas. There is a lot of merit to this suggestion, which runs through most of the amendments, although amendment No. 4 provides that a breakdown of the aggregate in respect of each individual advancement to Greece is to be provided, and No. 5 provides for a breakdown of moneys received by the State. Under these amendments, the information is broken down much more satisfactorily than is contemplated in the Bill itself. They would, if passed, ensure the provision of a greater amount of detail to the Oireachtas and ultimately to the public so that we could see on a regular basis precisely what was happening.
The Minister of State has indicated the Minister is willing to alter the provisions set out originally in the Bill. I did not quite catch the beginning of what the Minister of State said. Did he say there would be an amendment to this legislation on Report Stage?
Senator Alex White: I do not think there is another Bill dealing with Greece, although presumably there will be more legislation in respect of the broader fund that is coming down the tracks. I am being led to some extent by Senator Twomey, as they are his amendments, but it would seem to be more satisfactory if the changes could be made to this Bill.
Deputy Dara Calleary: The Minister gave a commitment to Deputies Bruton and O’Donnell yesterday that he would consider the changes and they were satisfied that he had pledged to work with them in this regard.
Senator Liam Twomey: I do not believe the commitment was as clear-cut as what the Minister of State has indicated. Following on from what Senator Alex White said, it would be welcome to see it incorporated in this legislation. If the Minister of State is saying it will be introduced in further legislation, I will not press the amendments, but it might have been more appropriate to include it in this legislation.
Senator David Norris: I strongly support these amendments. It is interesting they were grouped together. This is the only time I can remember in 23 years in the House an entire amendment section taken together but they are related. I regret I was unable to contribute to the previous debate but I had to attend the Sub-committee on Human Rights. A distinguished Afghan woman, Dr. Sobhrang, who will receive an award from Front Line tomorrow, was before the committee and had I not stayed, it would not have been quorate. I got into the Chamber just as the Minister of State started to speak and I regret that. I realise I cannot make a Second Stage speech now but I would like to comment on the amendments.
Since we are taking all Stages today and it is certain that, within the hour, this Bill will be passed, it seems to me to be bad parliamentary practice to take the entire Bill in this way without giving Members an opportunity for real consideration of amendments, for example, on Report Stage. We have had indications that the Government will examine these amendments but I have heard the response in this House many times previously that we cannot deal with amendments at this stage for X, Y or Z reason but Members will have an opportunity at another time. Very often that does not happen and, as Senator Alex White said, this is a specific matter relating to the Greek loan. It is important that these considerations be examined.
For example, the situation is very fluid. Matters change by the day, in fact, by the hour in terms of the response of the market to these issues. Initially, there was a very positive response. That has been rolled back to a certain extent. With regard to the huge principal loan, the €700 billion loan——
Acting Chairman (Senator Fiona O'Malley): I am going to exercise some control. I ask Senator Norris to speak to the amendments. The fact that he missed his opportunity to contribute on Second Stage does not mean he can do so now.
Senator David Norris: That is why I am concentrating directly and specifically on these amendments. I am very glad the Acting Chairman drew my attention to the necessity for doing that and I will explain to her exactly how I am proceeding.
Senator David Norris: ——of this House I have so often appreciated, seeks to substitute the following: “quarter, giving a breakdown of the aggregate in respect of each individual advancement, confirming the amount of the loan, the net disbursement amount, the term, the redemption schedule, the interest rate payable by the borrower, the funding costs for the State, the disbursement date and any other conditions applicable”. What I had been saying was germane to that because of the way in which things change.
For example, we have all heard various economists and specialists talking in the media about the question of a redemption schedule. Does anybody actually believe it will be redeemed? Many of the economists think it may not be redeemed. I hear that every day on the airwaves. I hope it will be but what about people such as Standard & Poor’s, for example, or Goldman Sachs, which in my opinion is criminally responsible for this mess by collaborating with the Greek Government in concealing what was going on, and doing so for its own financial advantage? Perhaps these groups are gambling against the Greek currency and perhaps against the euro itself. It is necessary that we get updates every quarter on the redemption schedule to know if it will be on target.
It is daft that Ireland, which is pretty well bust, is borrowing money to give to Greece. I accept that is solidarity but we are actually expecting to make a profit on it. What are we at? There is only one reason for doing that and it must be accounted to us every quarter, that is, to get the Greeks out of a hole. We probably will not get it back and we should not be seeking to make a profit on it. How will they give us this additional money? If we feel solidarity we should give it to them at the base level and not look for a profit. That is where we have got to. The market is responsible for this and we should not engage in market principles now that the whole market principle has become a busted flush to anyone who has eyes to see.
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