I am delighted to have an opportunity to contribute on this subject. I am a little concerned about the proposal in the Bill, which will mean the Government will not have to come back to the Oireachtas regarding similar adjustments in the future because it appears the Government parties are trying to hide the fact that time and again the Greeks have negotiated better terms for themselves and they have signally failed to get any significant change in the terms for Ireland to date. The legislation provides for a reduction in the interest rate on, and an increase in the duration of, Greece’s loans. When money is borrowed, the interest rate is paramount. If a householder borrowed €100,000 at an interest rate of 0% to be repaid over 300 years, it would not be much of a burden. However, if it attracted a 10% interest rate over ten years, he or she would have a significant current burden. When money is borrowed, the term of the loan and the interest rate are important. Greece is having its interest rate reduced from 1.5% to 0.5% above the ECB rate, which is low. The margin was greater at the beginning than the base borrowing level. The loan term will be extended from 15 to 30 years. The double positive effect reflects one hell of a negotiation by the Greeks.

We are told all the time by the Government that if one is the good guy, one will get all the breaks. The evidence is that the Greeks, who we are always told in this country are the bad guys, are managing, despite that, to do a hell of lot better than we are in the hard stakes of negotiation and have secured many more concessions than us. It is funny how willing the Government parties are to piggyback on the Greeks because the famous interest rate reduction they secured in their first year in office, which they have kept on about, was an automatic consequence of an interest rate reduction for the Greeks. The Greeks negotiated for us and the addendum was if it was good for one, it was good for all and, therefore, the Government parties’ boast is hollow because they did not negotiate the reduction. Their stance of never standing firm and saying something has to happen like the Greeks have done before taking their negotiations to the edge of the cliff and their unwillingness to engage in a tough manner has been an abject failure.

Let us be honest about this. We keep hearing reports of all sorts of extraordinary things happening, with little commentary from the media and little analysis of how hollow are the Government’s promises. There was great talk about the extension of the maturity and interest rate of the EFSF loans but there is nothing new in this. Paragraph 10 of the Eurogroup statement of July 2011 following the extension of Greece’s loans and the lowering of the interest rate on them outlined a commitment to lower Ireland’s interest rate as follows:

We are determined to continue to provide support to countries under programmes until they regain market access provided they successfully implement these programmes. We welcome Ireland and Portugal’s resolve to strictly implement their programmes and reiterate our strong commitment to the success of these programmes. The EFSF lending rates and maturity agreed upon for Greece will also be applied to Ireland and to Portugal.

In the meantime, we have continually been subject to big announcements about measures that were previously agreed, which are written into agreements, as the Government piggybacks on hard negotiations by the Greeks.

Last night, there was an announcement about the extension of the maturity of the EU-IMF loans. If that happens, I will welcome it. The Government parties have said all the time that they will exit the EU-IMF programme at the end of this year. They will and they will not, as they say. We should analyse that a little further. It is true that we will not receive more money under the programme unless we seek it but we will still owe money to the EU and IMF, which, hopefully, will be repaid over a longer period. Is the Minister of State saying the EU-IMF, having put in so much money, will stand back and say we can do what we want, there will be no more correcting of homework and they will have no more interest in our fiscal or other policies because they are not giving us more money despite the fact that we still owe them a significant amount? This is fallacy No. 1. On a technical level, Ireland will leave the programme but since we owe them a significant amount, they will still be interested in visiting Merrion Street to make sure their money is safe.

The second issue is we got the money at a good rate compared to the market rate at the time but it is not necessarily a good rate if the country has a good rating on the markets. This is about rolling over loans and as they fall due, if we have a good rating on the markets and they believe we have our problems sorted and have a sustainable debt, they will give us money cheaper than the EU-IMF but the Government parties know they are not ready for the markets unless they get external support and the reality is the EU-IMF money will be the cheapest available if they can hold on to it. All the boasts, therefore, about being market ready at competitive rates are given the lie to by the Government’s own actions.

I am also interested in another feature of the deal announced on 29 June 2012, which appears to be unravelling. I do not know whether the Minister of State reads the Financial Times but, on 14 January, it stated: “The plan, circulated last year among eurozone finance ministry officials, would force struggling countries either to invest in failing banks alongside the rescue fund, the European Stability Mechanism, or guarantee the ESM against any losses.” I am surprised, if this is incorrect, that the Government did not ask the newspaper to correct this and perhaps the Minister of State will clarify this. This proposal was made by the European Commission. During discussions, proposals such as this tend to be watered down rather than beefed up. In other words, we have to see whether countries will have to take the first losses.

The Minister seems to be trying to suggest that this was what was agreed all along and that the sovereign entity would have to carry some form of burden in any bailout by the ESM. This would mean that any initial losses would be to the account of the State. If this is what was agreed on 29 June, the Government kept it very quiet.

I want to move on to another crucial subject which, again to my surprise, has not caused much commentary. The Government might fail in many ways but, despite Deputy Rabbitte’s worries, it seems to have the media in a state of amnesia.

The Minister of State is a good Irish speaker and he will know what the biorán suain is. It is a little needle that puts a person to sleep. We had invested €1 billion in Bank of Ireland at 10%. The only risk that attached to that investment was that the Bank of Ireland might fail. The Government has assured us many times that the Bank of Ireland is on the road to recovery and will be one of our pillar banks in the future. If I came into the Chamber and said there was any chance of the Bank of Ireland failing, the Minister would say I was scaremongering and there was absolutely no chance of that happening. He would deny utterly that there was any risk, and with good grounds because I would concur with him. I do not believe there is any risk of Bank of Ireland failing.

That was the only risk to these preference shares. We were getting an interest rate of 10% on them. The Minister sold €1 billion worth of preference shares at par. He was getting 10% from the bank on the shares and borrowing at about 4%, so he had 6%, which is €60 million, of a gain every year from these shares. That would have paid for the reduction to the carer’s allowance and left €30 million in change, and all the cuts by the Minister for Social Protection which caused all the rifts in the Government ranks need not have happened.

What did the Minister do? He sold the family silver, the money we put in at a very high coupon. His justification was that the sale proved people had faith in the Bank of Ireland. It did not show any confidence on the Minister’s part in the Bank of Ireland because he was getting a fantastic return on his money. He was able to borrow at less than half the lending rate, yet he sold the goose that was laying golden eggs.

Then he made an even more extraordinary statement: The total value thus far of preference shares and CoCo investments was €7 billion. I wouldn’t be averse to selling the preference shares and contingent capital on par, if you take out what the taxpayer put in. We’re not trying to make a profit on that.

The Minister says he is not trying to make a profit on our investments. What kind of lula land are we living in?

Does the Minister see selling, on behalf of the Irish people, good investments below their realisable value as being prudent? That should scare the bejapers out of any rational person who would think there must be something crazy here if they are selling these really good investments at bargain basement prices. It would show confidence if the Minister had said these are good investments that will give us a good return and we have the confidence and the courage to hold on to them and make a return. I am certain that the two, so called, pillar banks will make profits in the future. Under current regulation and the arrangements we have put in place, I am confident they will make good profit. Since they are not on the national balance sheet, money invested in those pillar banks, if we have the patience to hold on to it, will give us a good return in the future. I have often cited the previous history of Irish Life, before the private sector made a mess of it. It was taken over by the State because it was in trouble and made significant money for the State over a number of years.

Why is the Government putting so much pain on our people and trying not to make a profit from investments that would give a good return in the future? I call on the Minister for Finance to say why we are not trying to make a profit on our investments. When we made the initial share capital investment in preference shares in AIB and Bank of Ireland, one of the questions from Government was whether or not we were getting a good coupon and a return on our money. The investment was not on the national debt because these were considered commercial investments. The Minister for Finance confirmed that to me in a reply to a parliamentary question last year. These investments do not count as part of the national debt because they are considered to be commercial investments. Why is the Government not trying to make a return for the ordinary people of the country whose money has been put into these investments?

Will the Government give full disclosure of the advice it was given for the sale of the so-called CoCos? The Government seems to be willing to dissolve any of its positions in the banks, including the most profitable ones, and will sell as soon as it can. The investors who are buying in know this. They know this is a giveaway sale that makes the Christmas sales in the shops look like robbery.

I will be particularly interested to hear the views of Deputies Peter Mathews and Shane Ross on all of this, if they have an alternative analysis from mine and if, in their view, there is some extraordinary reason why selling a loan at 10% when one can borrow at 4% makes commercial sense and shows confidence. If the only risk on the investment is the failure of the bank, the sale shows a great lack of confidence in the bank. It is farcical that anyone would fear that risk. There is, therefore, no explanation for this. It is one of the most incredible things.

Can the Minister explain his giving €60 million away to financiers every year from 2014 onward while making petty cuts to farm assist, grants to carers and all the things that were done in the budget, which need not have happened if the Government had insisted on getting its pound of flesh out of the commercial investments we have made?