Fleming backs Germany and France on opposing use of eurobonds

GERMANY AND France are right to tell the rest of Europe to “take a hike” about proposing the use of eurobonds, the Dáil has heard.

Fianna Fáil spokesman on public sector reform Seán Fleming (Laois-Offaly) backed the EU’s two most powerful economies in opposing eurobonds because it meant “essentially asking Germany to open up its bank accounts and allow all other countries to be joint signatories to them.”

Mr Fleming described eurobonds as “the latest trick”.

“It is utterly financially logical that they would not have anything to do with a eurobond when they do not have any control over how other countries are spending money.” Comparing Ireland to sub-Saharan Africa, he said eight years ago he was asking that the debts of some African countries be written off. “Ireland has come full circle and become a heavily indebted country.”

Mr Fleming was speaking during a debate on emergency legislation to ratify economic changes agreed by EU leaders in July, including increasing the loan facility of the European Financial Stability Facility to €440 billion and allowing Ireland, Greece and Portugal benefit from a reduced interest rate and longer loan maturity dates.

“People give out about the reaction of the markets and ratings agencies such as Standard Poor’s and Moody’s,” Mr Fleming said. “The markets react in a logical fashion when they see a band aid of an agreement.” He acknowledged that “my party added to the problem” but “the problem is continuing and must be addressed”.

Minister for Finance Michael Noonan introduced the European Financial Stability Facility and the Euro Area Loan Facility (Amendment) Bill, which was passed last night by 97 votes to 26.

He said now was the time for unity in the euro zone to ensure financial stability.

“This country is in a frightful fix,” Mr Noonan said. “We lost our sovereign control. We got into a situation where there is an enormous amount of debt. We couldn’t raise anything on the markets and we’re dependent on the kindness of strangers to give us money. The strangers proved to be very kind because they are our colleagues in Europe” and their money was funding Irish public services.

Sinn Féin finance spokesman Pearse Doherty said the legislation was the wrong way of solving the euro crisis.

There were benefits but “you can’t take somebody outside and beat the living daylights out of them and say ‘it’s okay, I’m going to drop you to the nearest AE’, because that’s what’s happened here. Europe is beating us up big time. On November 2nd, €700 million of a bond matures and everyone knows that bond should not be paid but Europe is beating up on us big time.”

Mr Noonan said that “normally when people beat you up, they don’t put €65 billion in your pocket before they go away. Only for the Europeans we were gone.”