Donnelly: It's time for a referendum on the bailout

Below is the full text of Stephen Donnelly TD's speech in support of the motion tabled in the Dáil on Tuesday 5 April that the government hold a referendum on the bank bailout and the EU-IMF loan package arrangement. The full text of the motion is available here.

The motion before the House is that the Irish people should decide whether they are willing to pay back the private losses of wealthy investors and European banks. The motion is not that the Irish people should not pay these losses, it is whether they should be given the choice to pay them. The Government claims the people were given this choice in the recent election. In the Chamber today, the Taoiseach referred to the large Government majority and the mandate this brought with it. In regard to paying back the losses of private investors, this is not true. The people voted for the Government based on what its candidates said during the election, as we heard in the House today.

Fine Gael previously claimed: “The banks aren’t getting another cent. Anglo Irish Bank is not getting another cent of our money. Not another cent.” As Deputy Luke ‘Ming’ Flanagan pointed out, the Tánaiste, Deputy Gilmore, said that when it came to the banking debt it would be Labour’s way or Frankfurt’s way. That is unambiguous language. Had I voted for either Fine Gael or Labour, which of course I did not, I would be pretty sure I was voting for a major push-back on the bondholders. Last week, however, we discovered this was not to be. We discovered that, when it comes to paying unguaranteed senior bondholders, the new Government’s policy is to continue Fianna Fáil’s policy.The Government now talks about the Irish people not bearing 100% of the burden - that is the language we hear in this House. Unfortunately, what the Government is not saying is that the Irish people will instead bear the vast majority of this burden, which is clearly contrary to what the people thought they were voting for. This is why we need a referendum. The amounts of money are so big, and the moral argument so abhorrent, that the Irish people have a right to decide. They thought they were voting for this policy but it has vanished.

We learned in December last that the previous Government, whose Members are conspicuous by their absence from the Chamber, had already paid back more than €70 billion to bondholders. We know there is still €35 billion of unguaranteed bonds to be paid, which brings the total to at least €105 billion, or over €80,000 per household. As we are borrowing that money at 6%, this means every household in Ireland is paying €5,000 a year just to service the interest on these debts. For the Irish people to pay back €105 billion of private losses would be the equivalent of the French paying €1.3 trillion or the Germans paying €1.6 trillion. I had a conversation with an MEP during the week who said that if the French people were asked to pay €1.3 trillion of private losses, they would burn down the Champs-Élysées. Yet, the Irish people are being asked to accept this.

I believe the Government would prefer not to pay this money. I believe the Minister, Deputy Varadkar, and the Tánaiste, Deputy Gilmore, meant what they said, namely, that they would prefer not to pay it. Why, therefore, are we doing this? We understand from Professor Honohan that the Europeans have threatened us because he told us this in an interview last Thursday. He confirmed that, should we choose not to pay the investment losses of others, “there will be consequences.” He explained that paying the remaining €35 billion was about “expediency and calculation”. This is not a marginal policy decision. Paying back the remaining €35 billion amounts to a debt of €27,000 for every household in Ireland. Therefore, what we will be saying to members of the public is that even though they cannot afford petrol for their car, to pay their rent, to service their mortgage or to deal with cuts to disability allowance, we will not help them. However, if they are foreign billionaires who gambled on Irish banks but should not have, not only will we help them, we will cover their entire loss and pay them profit. We will pay not just the total amount of the bond but we will pay the interest earned on that bond. I do not believe that is who we are as a people because it is clearly abhorrent.

To the best of my knowledge, this type of transfer of public money to private losses has never been undertaken anywhere in the world throughout history. I cannot figure out why it is happening here. We know there is no moral argument for this. The only argument is whether we should pay the money and not have the Europeans threaten us or should we not pay the money and accept the consequences of whatever the Europeans have threatened to do. Professor Honohan said we have weighed up those options and believe the consequences of what Europe would do to the Irish people are worse and, therefore, we will pay back on the bonds to foreign investors. I argue, and the reason I support the motion is, that because the money is so big, and the people do not know what these threats are, we have to have an open conversation and decide. The people of Iceland will decide this Saturday and that is what we should do - a referendum would be democracy in action.

The Government’s counter-proposal to the motion is astonishing. First, the Government commends itself on its policy, which in regard to the debt is a continuation of Fianna Fáil policy. Then, it “supports all of the actions necessary for the Irish banking sector to become ... better funded and better capitalised”. While I do not know who wrote that, I presume “all of the actions necessary” includes the servitude of the Irish people. Let us think about it in this way. To pay back €1.5 billion of private losses would be the equivalent of everyone in Ireland working all day every Monday for the next 20 to 30 years to pay back that money because all tax paid on each Monday would be used to pay that amount.It does not surprise me there are not many Government Deputies in the Chamber as they would find it difficult to face the people who voted for them on the basis they will come to the House tomorrow to vote for the amendment which states that “all of the actions necessary” will be taken. A vote by Government Deputies on the amendment says the following to the people of Ireland, namely, it is okay for the Irish people to continue to pay the vast unguaranteed losses of private investors, it is okay that the Irish people thought they were voting for something that they were not voting for and it is okay for the Irish people not to have any say in this matter.

For all of these reasons, I call on the Government to hold a referendum. I call on Government Deputies to vote for the motion - in vain, I am sure. I believe a vote for the amendment would constitute a genuine betrayal of the people who voted them in.

Note: The motion for a referendum was defeated 121 votes to 27 in the Dáil yesterday, Wednesday 6 April.