Tom Barry (Cork East, Fine Gael) | Oireachtas source

I welcome the opportunity to speak on the Government's decision to exit the EU-IMF programme of financial support in December without applying for a precautionary credit line. One has to look back to see where one is going. In three years of the programme the Administration has achieved a lot. One only has to cast one’s mind back to the fear of treading through the unknown territory we faced three years ago. It was a very uncertain time. Moneys were exiting the banks at an alarming rate and we did not know the full extent of the problem. Not understanding the problem made the situation more terrifying. There was a genuine fear that one or more of the banks would collapse and people might lose their savings or businesses might lose their cashflow. It was a crisis in every aspect with the word and people were afraid a freefall could occur. I spoke to someone at the time who was building an extension. They were extremely anxious to get the money to the builder in time in case an institution would collapse. The situation was frightening but there is no longer such a fear.

Reference was made to default and the resulting consequences. One must go back to the early years following the formation of the State when we did default on land annuities. We paid the British state land annuities under an agreement made in good faith. A decision was made to keep collecting annuities from farmers but not to pay them to Britain. That was a default. An economic war ensued which resulted in devastation. One day the cattle in the fields were worth money and the following day they were valueless. One could not sell one’s produce. My ancestors and those of my neighbours suffered. They had nothing. They went from having a living to being absolutely broke and the devastation was frightening. I recommend that people examine what happened then. They would see that a default would mean hurting the vulnerable and those trying to make a living.

The banks are adequately capitalised. I spoke to a banker about the matter today and he expressed confidence that the banks would get through the stress tests.

As a country, we have tackled our finances and have stuck to our recovery targets rigidly. This approach is very businesslike but it is not often associated with the running of countries. We have made a template. There is a parallel between the management of this country and the management of a successful business. There is a solid, serious, no-nonsense approach. It has sent out a clear message that Ireland is very serious about its recovery.

Ireland was envied during the boom because of its growth rates. People asked how we did it and said we were brilliant. Our premiers were invited to talks to outline what we were doing. All that led to dismay because the true nature of the bubble became evident eventually: we were people of straw. Today Ireland is admired and respected across Europe for acknowledging its failures and having the courage to face up the issues and lay down the basis of a sustainable economy. This is the true nature of what we have done.

The financial sector has also gone through a tumultuous period. It is true that it got it wrong but there has been genuine positive engagement and understanding of the problem. It was always going to be difficult to build up the expertise to deal with it. We have returned to the financial markets and have built up cash reserves. This is no accident. The NTMA has done a very good job. An informed observer would see there was no need to apply for a precautionary credit line as we already have one in place. Being insured is sensible but being over-insured is not. Nobody here would consider insuring his or her car for double its value. One should remember this behaviour costs money and does not deliver a better financial outcome. There is a contradiction associated with Ireland applying for the funding as an economy cannot be in recovery and decline at the same time.

Confidence breeds confidence and there is nothing more annoying in business than someone who fails to make up his or her mind or take responsibility for his or her decisions. Indecision is fatal as fate will show one one's destiny. Let nobody be under any illusions that exiting this bailout and being able to do so without additional ties is a huge achievement and one of which we should be rightly proud.

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