The Final Sitting of the 23rd Seanad

Senator Regan Speaking on the Order of Business:

One of the fundamental issues that must be addressed by the Government is the EU-IMF bailout deal.  Senator O’Toole mentioned today that promises were made to renegotiate it.  The fact that the deal is unsustainable for this country makes it imperative that it be renegotiated.  I do not think we should second-guess how the Government plays its cards on this one.  There is much damage that must be undone.

There is also the question of rebuilding our reputation in Europe.  We must get the facts out about the significance of the 12.5% corporate tax rate, including the fact that this is not the lowest rate in Europe and, particularly, that it played no part in the crisis in our economy.  That will take time.  The Taoiseach’s strategy of not rushing the fences in the European Council this week will be proven to be correct.

Lest we do not have the opportunity again, as this may be our last occasion to meet, I must say that I have found it a privilege to be a Member of this House.  The manner in which business has been conducted has been exemplary, and much of that is due to the Cathaoirleach, Senator Pat Moylan, who has conducted business in an even-handed and fair way.We have tested his patience at times, and I have played my part in that.  His approach to the business of the House has been very fair, and I thank him for that. 

The Seanad is a most important institution, although its role and effectiveness in scrutinising legislation are not very evident.  Not many amendments or suggestions from the Opposition are accepted by the Government - at least not obviously, because no Minister wants to admit that he or she is accepting amendments from the Opposition. 

However, the debate in this House permeates through to the various Departments and is ultimately reflected in better legislation.  It has provided a platform for raising many issues of national interest and concern, and we have seen results from some of those debates.  The Seanad has effected change in the body politic and it is important that this is recognised.  

The Programme for Government

The Programme for Government is an excellent document to which I subscribe and support as a member of the Fine Gael Parliamentary Party. 

It has been adopted by two political parties, Fine Gael and the Labour Party, which have the interests of the country at heart.  For that reason there will be cohesion and progress and co-operation between them in ensuring the programme is put through.  Given the problems the country is facing and the need to get out of the rut we are in as a result of the economic recession, the key word is “confidence”. 

I refer to the events which took place on St. Patrick’s Day in Washington and the extraordinary success of the Taoiseach in restoring the image of Ireland in the United States, given the importance of that country in attracting foreign investment and tourists to this country.  In the wake of the damage done to Ireland’s reputation, the success of the Taoiseach’s visit to the White House and other venues on that day was vital in presenting Ireland’s views.  The visit has done much to restore confidence in this country, show there is a way forward and that we can get out of our difficulties. 

The Government has taken the first steps towards reform with a significant change in the use of State cars.  While the savings may be minor, this decision shows that the Government is serious about reform and wants to run a prudent and cost-effective ship of State.

The other issue I wish to raise is that of the European Union and the European Council meeting which begins tomorrow.  The Programme for Government is essentially premised on establishing a new arrangement with the European Union for the bailout and rescue deal drawn up by the previous Government.  We were led into a cul-de-sac by it in its dealings with the Union.  We hope, therefore, that the Taoiseach can achieve some success at the European Council meeting in order to reconfigure the arrangements agreed with the Union for the provision of support and funding, the rescue of the banking system and the improvement of the State’s finances.  When we were in the process of adopting the Lisbon treaty, a previous European Council on 10 July 2009 in Brussels took a decision to give guarantees to Ireland on a range of issues, not least the issue of taxation, that nothing in the treaty would affect the Irish position on taxation matters.  The conclusions of that Council expressly stated the decision in this regard was legally binding on the Community and that it would be included as a protocol to the next accession treaty.  The pressure being brought to bear on Ireland’s corporation tax rate of 12.5% is being exerted by President Sarkozy supported to some extent by the German Chancellor and unacceptable in circumstances where such a solemn guarantee and declaration were given to this country.  If that were to be European Union policy, it would represent an act of utmost bad faith against this country.  The Irish corporation tax rate is not the cause of the economic banking crisis.  The issue of solidarity is also enshrined in the Lisbon treaty and must be highlighted.  I hope small member states will support Ireland and the Taoiseach in his efforts at the European Council.

The point I make in this regard has been reported in an editorial in the Financial Times this month.  It states the pressure being brought to bear on Ireland with regard to its corporation tax rate represents a dishonourable attempt to exploit the eurozone’s debt crisis by bullying Ireland into accepting policies that, it is hoped in Berlin and Paris, will stem leakage from their own tax systems. 

The editorial suggests this is wrong on a number of accounts.  First, the cast iron guarantee given to Ireland in the Lisbon treaty and, second, the economic crisis in Ireland were not caused by or contributed to by our corporation tax rate.  It eloquently states France and Germany have no business in pinning Ireland to the floor when Irish taxpayers are picking up the colossal bill for the role the European Union played in Ireland’s property and construction sector bubble.  Raising the corporation tax rate would not improve Ireland’s public finances.

This point has also been made by Mr. John Bruton, Mr. Peter Sutherland and, more recently, Mr. George Soros who stated this week that peripheral countries such as Ireland should not have to bear the entire burden of the cost of adjustment.  There is an issue of good faith.  In the context of the guarantees given to Ireland, I hope this will be taken into account in the deliberations of the European Council this week which is the elephant in the room as regards the programme for Government and the ability of the Government to get the economy back on track.  

Minister Lenihan Must Clarify Why he Did not Act on Advice of ECB- He has been Misleading us for Long Enough

Fianna Fáil backbenchers now know what it is like to be misled by the Minister for Finance, Deputy Brian Lenihan, as he did on the leadership of Fianna Fáil.    

They should hardly be surprised because the Minister misled his own Cabinet colleagues on the EU-IMF bailout and had them making a fool of themselves on national television, denying there was any talk of a bailout.    

More importantly, the Minister has been misleading the whole country on the economy since taking office over two years ago.   He misled us on the issue of bank bonuses when he claimed his hands were tied and then subsequently passed legislation on the issue. He claimed that subordinated bondholders could not be touched, yet legislation was also ultimately passed by the Minister to deal with that matter.  The most extraordinary one was the EU-IMF bailout in which he treated with contempt, as did the Taoiseach, anyone who suggested the rates of interest were excessive and unsustainable, yet he unashamedly indicated yesterday that he was going to Brussels to renegotiate the rates. 

This morning in the Seanad I called on Minister Lenihan to make a statement on the reports last week that the ECB had urged the Government to take emergency measures and bring forward the budget for 2011. 

A member of the bank stated:“Markets waited and waited and since they saw no policy reactions they started to lose confidence in the course of the summer.  There was a downgrade in August but there was no policy reaction, no announcement that a tough budget was in preparation and no announcement of the measures.  The loss of confidence also affected the banking system and this created a spiral which led to the crisis and in the end, a request for financial assistance.” 

Portugal has been able to avoid the EU-IMF bailout. Ireland has not because Minister Brian Lenihan failed to act as he was urged to by the ECB.

We Cannot Send this Taoiseach to Washington

On the 23rd of February last year, I spoke in the Seanad about the issue of the relationship between the Taoiseach, Deputy Brian Cowen, and Seán FitzPatrick of Anglo Irish Bank.   

Continue reading We Cannot Send this Taoiseach to Washington…

Bullying not a Substitute for Parliamentary Debate

I refer to the Taoiseach’s outburst in the Dáil this week and his interview with Seán O’Rourke on RTE Radio.  It was characterised as a robust defence of the budget and his record. However his entire approach amounted purely to bullying.  He is good at this. Insulting and shouting down the Opposition and dismissing all opposing views does not constitute political debate. However this is par for the course for Mr. Cowen.   

Continue reading Bullying not a Substitute for Parliamentary Debate…