Thomas Pringle TD has today attacked the Taoiseach on the inadequacy of the European Stability Mechanism (ESM), outlining that it would “sign-up the Irish people to the biggest socialisation of bank debt across Europe”.
Speaking to the Taoiseach today at Leaders’ Questions, the Independent TD for Donegal South West said the only guarantee of the ESM is that it puts the most gigantic ‘put’ on taxpayers across Europe.
“Article 15 of the ESM states that ‘The ESM may decide to grant loans for the specific purpose of recapitalisation of the financial institutions of the ESM member.’ Why the Government wants to sign us up to the biggest socialisation of bank debt across Europe is a mystery to me.”
“The ESM Bill which was published last week in effect legalises our bank guarantee in Europe. If a member needs to recapitalise their banks the funding will be lent to the member state and paid on to the bank – therefore the banking debt becomes the taxpayer debt,” he said.
He added the ESM can’t recapitalise banks directly but it loans money to taxpayers who in turn give the money to the banking systems.
“The creation of this pan European bank debt is unsustainable and is a feeble attempt to cover up the real problems that lie within the heart of the EU with a measure which simply hasn’t got the capacity to deliver.”
“As it stands, the ESM could, if Ireland were to be subject to it, call on Ireland to make contributions of up to €11.1 billion in various forms of capital. In effect, it the ESM can direct the State to raise sovereign debt, give the money so raised to it and can decide where, when, whether and how it is spent. This is utterly nonsensical.”
“The panacea of the ESM that the Government purports to be necessary for future funding is actually going to sign-up Irish taxpayers to the continued funding of bank bailout debt across Europe,” stated Pringle.