Peter Mathews: “When I was with the finance and public expenditure committee, meeting other committees in the Bundestag, we put to them information of which they were clearly not aware. These people are on the budgetary committee of the Bundestag, with a €300 billion budget. I put it to them that the loan losses in our banking system were 60% of our national income or GDP. If the same problem had arisen in Germany, it would be a €300 billion part of its GDP. We were being asked, silently, to bear this load, which was wrong.
I will reiterate the question asked by Deputy Mac Lochlainn. At the summit on Monday, why was the question of the unsustainability of private banking debt that has now been socialised in this country not on the agenda for discussion?
The ESRI equivalent in Germany was not aware that the three elements of debt in this economy comprised private household debt and non-financial corporate debt as well as the sovereign debt, which is the focus of the fiscal compact. Our private household debt and non-financial corporate debt is twice the size of that of Greece, which is in the emergency ICU. What is happening today is really a shame. We are boxed into the old traditions.”
Lucinda Creighton: “I accept the point Deputy Mathews makes. I absolutely appreciate there is a concern that debt sustainability was not a featured item on the agenda at the summit on Monday. However, it has been featured at numerous summits in recent months. There was a decision by Heads of Government that on this occasion the focus would be on two issues, the first being finalising the text of the fiscal compact. The Deputy may not agree with it but that is the decision they took. The other was to focus primarily on the issue of jobs, growth and exploring various ways in which the institutions of the European Union might be used to assist member states in their efforts. These include, for example, ways in which the European Investment Bank could be leveraged in order to work with member states to develop opportunities in investment and infrastructural projects and so on. That is something our Government is exploring in some detail.
The Commission proposal on project bonds, for example, is a matter the Government is discussing and specific Departments have been charged with investigating and identifying specific opportunities for Ireland. There are a number of positive outcomes from the summit. The issue of the sustainability of Ireland’s debt, as Members know, is under discussion with…”
Mathews: “It is not understood.”
Creighton: “It is under discussion. The Deputy can take issue with whether it is understood. I assume the Minister for Finance would have a different view. We are in ongoing negotiations with the troika. As the Deputy knows, the Minister for Finance, Deputy Noonan, spoke last week with the President of the ECB. That work will take a little time but it is progressing. I am very optimistic about it. I do not subscribe to all the doom and gloom.”
Mathews: “It is not doom and gloom. It is reality.”
Creighton: “Some of it is.”
Mathews: “No, it is not.”
Creighton: “There are some good news stories about the way in which Ireland has been moving much closer to recovery than either of the other two programme countries, or a number of other member states. For example, we returned to positive growth in 2011, which is something about which this Chamber seems not particularly interested. Although unemployment is a massive cause for concern for this Government, as I assume it is for all governments in Europe, there has been a small dent in it. It has fallen from 14.7% to 14.2%. The decline is very slow but it is positive and very important.”