The following is the full text of Deputy Padraig MacLochlainn’s speech to the Dail last night:
“Looking forward to this week’s EU Summit, we hear the word “cooperation”
being bandied about.
Cooperation is defined by the Oxford English Dictionary as “the action or
process of working together to the same end”. To intimidate means to
“frighten or overawe (someone), especially in order to make them do what
one want”. There is a world of difference between cooperation and
One of the outcomes of the meeting of euro-leaders last week was that
Greece gets a lower interest on its borrowings. The cost? It had to agree
to sell €50 billion of state assets. When the Greek economy is gutted
completely, when all vehicles of growth have been auctioned off, when there
is no mechanism to begin paying back these extortionate loans, what will a
difference of 100 basis points really be?
When Ireland went cap in hand to get a reduction, we were told no.
Angela Merkel said “It is simply fair to say we can only give our
commitment when we get something in return.”
But Germany and France got the something and continue to get the something
every time we put another billion of taxpayers’ money into our banks so
German and French banks don’t take a hit.
They get something each Budget when billions of euro is taken out of
ordinary people’s pockets so that the Government are adhering to the strict
terms and conditions imposed by the EU.
They get it each time the prospect of burden-sharing is taken off the
At this week’s meeting of the Summit, the Pact for the Euro will be
converted into a binding agreement for the euro area countries,
representing a deep European penetration into national political and policy
freedoms, without any genuine democratic mandate.
The effective lending capacity of the European rescue funds will be bumped
up to meet its original goal of €500 billion through higher guarantees and
injections of capital, though the precise mix and timing have yet to be
It will concentrate on actions where the competence lies with the Member
States, constraining somewhat their autonomy in setting policy by way of an
annual system of setting common targets, setting national commitments,
reporting, and evaluation by the Commission and Council. It stipulates that
all euro-zone countries put into law a pledge to get a grip on public debt.
There are no provisions for compulsion or sanctions on member states. The
reliance is on peer pressure. Only those actually seeking the support of
the EFSF/ ESM will actually be forced to make policy changes.
How can this be cooperation?
Essentially an IMF-type institution will be established for Europe, whose
lending will be senior to that of private-sector bondholders and which, can
impose restructuring agreements and haircuts. However, as with all mention
of burden-sharing in Europe, this will only happen after 2013.
Is the pact aimed at the right problems? No. How can it be when the German
Chancellor is facing into an electoral challenge this very week. One cause
of market turmoil is fear of contagion because of the fragility of Europe’s
banks. But any sensible debate about restructuring debt in the near term
has been completely blocked even though, confusingly, Germany insists that
bondholders must in future bear more of the burden.
The European Commission and French-German governments’ hard-line position
on private debt restructuring in the future – whether in the form of
‘haircuts’ for bondholders or debt-for-bank-equity swaps just rubs salt
into the wounds of the Irish people.
The Government needs to tell the people of this State the first measures
they are pledging this week to implement under the Pact for the next year.
They need to outline the concrete commitments to be achieved in the next 12
months in the name of the Irish people. What are they bringing to the table
The Irish people also deserve to know when the timetable for the gradual
paying in of capital into the new Fund will be established- how much
capital do the Irish people have to put into this Fund so that we may at a
later date get it out as a loan at some extortionate interest rate. These
are the little details of this Pact that escape public attention: we will
be paying into a fund that we will most likely access at a later date at a
high rate of interest. It’s like a burglar robbing your home and then
charging you to take away the loot!
One of the most pressing issues in this Pact no doubt relates to the
European Stability Mechanism where any decision to provide assistance will
be taken by unanimity on the basis of a debt sustainability analysis of the
Member State concerned conducted by the Commission and the IMF, in liaison
with the ECB.
Where was the debt sustainability analysis before Ireland drew down the
crippling EU/IMF loan?
Will there be such an analysis?
THESE are the questions that our Government need to be asking.
THESE are the things that this Government need to be fighting for.
The dogs on the street know that the current debt burden is unsustainable.
The world and his brother knows that there is no way that the Irish people
will be able to support bondholders of German and French banks
indefinitely, while dealing with packages of income cuts, public service
decimation and taxes on everything bar the wealth of the State.
Taoiseach, during the election you said that there would be burden-sharing.
You said that no longer would the Irish people carry the debts of private
banks on their backs. You have said that Irish sovereign default was
becoming closer to reality because of the strangulation of private debt.
Sinn Féin have always said that. We were the ONLY party that rejected the
bailout on that basis.
We were the ONLY party not talking about renegotiating the interest rate
when really it was the whole deal that was rotten.
We were the ONLY party that said that the people of this State could not
afford the terms and conditions of the bailout.
And unfortunately we were right:
Unemployment is at the record high of 14.7%
More and more people are making the decision on whether they can afford to
feed their families or pay their mortgage
1,000 people a week are emigrating
Taoiseach the choice is clear, do you stand up for Ireland and challenge
head on the blatant injustice of the EU/IMF package or do you repeat the
disastrous policies of the last Government which amount to a betrayal of
the Irish people.
I hope for all of our sakes you make the right decision.