Taoiseach defends bailout deal struck with EU-IMF

 

Taoiseach Brian Cowen has rejected claims that the €85 billion EU-IMF bailout plan was a bad deal for Ireland.

Speaking as the Dáil met for the first time since the scheme was announced on Sunday, Mr Cowen said he had “taken every step possible in the national interest to try and bring this country forward again”.

He said: "We now have funding arrangements in place to deepen the reforms in the banking sector and to create jobs and growth in this economy.”

He added that "if we never had a banking crisis we have a situation where the level of income is much less than the level of spend. We have to obtain €19 billion this year, a reducing number next year. We are funded up to July next year."

During leaders’ questions Fine Gael leader Enda Kenny described the scheme as a “bad deal for Ireland” and said the future of the Irish people and the future of sovereignty had been decided upon behind closed doors.

“What happened last Sunday was a demonstration of art, craft and skill of national destruction," Mr Kenny said.

"This deal…was done as if people didn’t matter, as if people didn’t count and as if people didn’t exist. Do the deal in Brussels and let them [the people] eat cheese as the sleek limousines drive through the slush.”

Mr Kenny asked if the Taoiseach had the “courage“ and “gumption” to put the deal to a Dáil vote.

In response, Mr Cowen accused the Fine Gael leader of retreating “into flights of rhetoric” any time a serious matter is discussed in the house. He asked where Mr Kenny expected the State to get the money if he felt it was such a bad deal.

“What we do need in this country perhaps is to rise above partisan politics now and again," the Taoiseach said. “Far from referring to Ireland as either banjaxed or an economic corpse, we need to recognise there are people going to work…and we need to be supportive of what they are trying to do.

“Rather than this constant negative rhetoric coming from the leader of the Opposition he needs to confront the real issues.”

Labour leader Eamon Gilmore accused the Taoiseach of taking the country to the “pawn shop” and of having "no shame".

He told Mr Cowen: "You have no shame after what you have done to this country to stand up here on the day that you come back with a lousy deal like that" and claim "that you have got a bargain".

He said in anybody's language 5.8 per cent was "way more" than 5.2 per cent and "it is way more than is being required in other member states. And it is that high because of the economic problems your Government and the banks have created."

But the Taoiseach insisted that an interest rate of 5.8 per cent over seven-and-a-half years was better than the 5.2 per cent over three years offered to Greece, which was now looking for the terms Ireland had got.

Mr Gilmore said it would have been a better use of the pension reserve fund to provide hospital beds than to "fill the hole" in the banks. He said it could have been use to try and provide growth and a bank that might actually lend to businesses but "is now going to be used in on top of the money that is already committed to the banks".

Earlier, Mr Gilmore questioned the legality of the deal going through without it being put to a vote in the Dáíl. He quoted article 29 of the Constitution: “The State shall not be bound by any international agreement involving a charge upon public funds unless the terms of the agreement shall have been approved by Dáil Éireann”.

Mr Cowen said Mr Gilmore had no basis to assume he would have got a better deal had he been negotiating.

He also rejected claims that the EU/IMF bailout will tie the hands of future governments.  He said it was a matter for any future Government to decide if it wanted to draw down the money from the facility.

“There is no fettering of future Governments. If a future Government could go back to the markets to borrow at
better rates than are available now, of course it would do so. That is what any Government would do,” he said.

A Dáil debate on the deal entitled Statements on EU/IMF Programme for Ireland and the National Recovery Plan 2011-2014 continues tomorrow.