Calling for a referendum on the bailout

Week 5 was dominated by the ‘bank reorganisation’ and the EU-IMF bailout. I disagreed very strongly with the manner in which the previous government dealt with this, and I am certainly disappointed by the way the new Coalition has continued on the very same path, despite promises to the contrary. Here’s a section of my Dáil speech:

“I find it amazing how little difference there is in what the new coalition is up to in terms of dealing with the banking crisis and what the Fianna Fáil Party did prior to it taking office. Fine Gael Party and Labour Party Members should have the courtesy of bowing to Deputy Lenihan when they meet him in the corridor because they seem to agree with absolutely everything he had to offer.

I have noted a few of the nice quotes made during the election campaign. Fine Gael’s banking strategy, Credit Where Credit is Due, which is part of its five point plan, states: “Fine Gael was the first party to argue that it was unfair for the Irish people to shoulder all of the losses of our banks, and that it was right that investors who had lent recklessly to the banks should also share in the pain.” The document goes on observe: “It is neither morally right nor economically sustainable for taxpayers to be asked to beggar themselves to make massive profits for speculators.” It is hard to credit that this is the party that has given us the medicine that we have got for the past week.” (6 April 2011)

I am convinced that the country will not be able to repay these debts, bailing out dead banks to the tune of €70 billion is irrational, but sadly the new Coalition lacks the courage to challenge the might of the ECB:

“We were informed in the past that the European Union is supposed to be a family of nations and that we all look after each other. We were also informed that if one country got into trouble, the others would provide assistance. There was supposed to be a spirit of fellowship among the member states. I am not sure whether we have put the question regarding burden sharing in strong enough terms. In general, European politicians are generous and they would be sympathetic regarding the massive problems the Irish people are facing. I accept that those who run the ECB are incapable of being sympathetic towards us. If, however, we pressurise European politicians, we may obtain some comfort from them. They must be made to realise that we are in a crazy predicament.

The dogs in the street know that this deal is not going to work out. At some stage, our colleagues in Europe are going to state that they will provide us with assistance. If, however, we accept their policies in the interim, the less well-off will suffer most. It is crazy that we are providing money to reckless banks while the numbers of learning support teachers and special needs assistants are being reduced. What we are doing to the young people of this country is unreal. It is all being done in the interest of paying back reckless investors who made mistakes. People invested poorly in banks that were not well run. The essence of capitalism is that one makes one’s gamble and one accepts the results. One wins some and one loses some. However, the investors to whom I refer are all winning. That is incredible.” (6 April 2011)

Each grouping in opposition is allowed to put forward a motion in Dáil Private Members Business whenever their turn comes around and the Technical Group used the opportunity to recommend a referendum on the bailout – surprise, surprise, it was defeated when put to a vote, but we managed to make our point to the chamber and the people. An extract from my speech:

We were told the deal Fianna Fáil came up with was not workable. The Tánaiste, Deputy Gilmore, insisted it was not workable. From their words we know most top economists believe it is not practical. God knows, we have a good idea it is not fair. Professor Honohan, the Governor of the Central Bank, has been very open in telling us that on the issue of fairness the deal does not rate very highly. It is hard to credit that the most vulnerable in our society will be hung out to dry in order to satisfy the problems of the financial institutions.

The banks had their stress tests. Perhaps the State needs them now because a number of people on the other side of the House told us the State is bankrupt. If it was not bankrupt before now there is a great chance that putting the bank debt with the sovereign debt will put us into the area of insolvency. A private company is deemed to be insolvent when its liabilities are greater than its assets. This debt certainly puts us into that place. If a private company went to the bank that bank would look at the company’s potential for future profits and would say that if the company’s future profits could cover the current losses perhaps it might do business. However, one would have to be very optimistic to see us paying the bills. Any private company that continues to borrow money when it is insolvent is regarded as trading recklessly. In my opinion, this Government is now trading recklessly.

It has been argued that this motion does not merit a referendum. Article 27 of the Constitution states that an amendment of the Constitution is applicable when a Bill “contains a proposal of such national importance that the will of the people thereon ought to be ascertained”. I believe most people in this country would agree this is an issue of massive national importance. This Government has spoken a great deal about having a new approach to politics and more openness… If this Government is serious about engaging the citizens of Ireland in a democratic process and about giving them a say in how they are governed it should have the courage for a referendum on this issue.”