Peter Mathews (Dublin South, Fine Gael) | Oireachtas source

It has been a pleasure to hear Mr. Trethowan's contribution and answers to our questions and observations. Deputy Richard Boyd Barrett mentioned the big picture - the recovery of demand and the economy. The banking system is like the plumbing system that makes a house - the economy - warm or go cold. How can we support demand instead of it going flat, as Deputy Mary Lou McDonald mentioned?

It has been mentioned that exports have survived, with the sector managing to reduce costs and expand revenues. By definition, it has boosted profits. It seems that they are mostly from companies which are supported by foreign direct investment. The legacy debts on bank balance sheets have suffocated households and small and medium enterprises, which is why there has been a net contraction of €2 billion in the economy. We must pay attention to what some people outside are saying, that a debt write-down is a must. The indebtedness of the banks to outside creditors needs to be dealt with as an imperative. This is called creditor contraction by the likes of Professor Carmen Reinhart, Mr. Martin Wolf and Professor Stiglitz. It would provide the creditor capital cushion needed to allow the banks to spring clean their balance sheets and get rid of the legacy debts which are weighing down on businesses that deal with the Credit Review Office and that have profitable projects that could be financed with credit. The old stuff is like a gangrenous limb that is killing the banks; the same applies to households and the problem has not been faced. Households cannot adjust to a sustainable expenditure pattern which would allow an opinion that it makes sense to invest in the economy, employ, produce and distribute goods and services. People do not get it. I can see that Mr. Trethowan is a kindred soul and could add his persuasiveness and authority to get the message across to Departments, Ministers and advisers. He is at the coalface or in a theatre like a surgeon. He has seen the bodies and knows what are the vital statistics. He has described the position in microcosm.