Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I am sorry to have missed the opening presentations, although I followed the exchange of views with great interest. The Latvian ambassador, Mr. Elferts, recently made an excellent presentation at a conference in Maynooth on the European debt crisis in which he presented the view of a non-eurozone member and outlined the difficulties experienced by his country.

It is interesting that Latvia wishes to join the eurozone. In the light of the current problems in the eurozone, will Mr. Dombrovskis elaborate on the reasons it is considered to be in his country's interests to cede the power to set its own exchange rate by joining the euro? Despite not being a member of the eurozone, I understand Latvia adopted the same policy as eurozone members on supporting the banking system. In the case of Ireland, the decision was made - or made for us, depending on which side one takes in the debate - that no Irish bank could fail and we had to recapitalise the banking system from our own resources.

My understanding is that Latvia supported a large Latvian bank out of the resources of its taxpayers and that went directly on to the Latvian sovereign balance sheet. Given that Latvia did not have a body, such as the ECB to deal with when it made that decision, why was that template chosen as a means of supporting its banking system, as opposed to a model of allowing the bank to fail? Why does Latvia wish to join the eurozone? What was the reason that template was chosen for supporting its banking system? A growing discussion is taking place on the idea that austerity is self-defeating, that one does all these things without ever catching up because the loss in tax revenue that is caused by a decrease in economic activity means the deficit continues at the same level or narrows only by a small amount. Latvia went through a series of budgetary adjustments that were eye-watering in comparison with what we have done in Ireland. What progress was made in that period in regard to its budget deficit as a result of those measures?