Bernard Durkan (Kildare North, Fine Gael) | Oireachtas source

I welcome Mr. Kitching and I thank him for his presentation which is immensely stimulating and one of several we have heard in recent weeks which hopefully will be of benefit to us all as Europeans and as Irish citizens. It is important to examine what has happened in the past 50 to 60 years in an attempt to identify the positive aspects which may be of value in the future. There is a tendency to throw away the things of the past and to start from scratch as if the institutions had failed. Many institutions have failed not by virtue of the institutions themselves, but because of the people who worked in them. That is not a reference to Mr. Kitching's institution.

Mr. Kitching referred to the transnational party lists, which in my view have a distinct disadvantage for a small country such as Ireland. I do not like the list system anyway at the best of times and I have a problem with transnational party lists.

The European Parliament has gained in strength and influence and national parliaments are allegedly gaining in strength and influence in the framing of future European policy. How can those two points be reconciled? A growth in the power and influence of national parliaments will strengthen renationalisation which is not in the interests of European progress or integration or the progress of the European project. At the same time, the influence of the larger countries is strengthening considerably in the European Parliament, both in numerical strength and influence, by virtue of the gains deriving from the Lisbon treaty. Where do small countries stand in that situation? For example, Ireland will lose another MEP even though we have a small number of them. The loss of one or two MEPs would have a minimal effect in the case of a large country - even the loss of ten MEPs would be minuscule - except when it comes to votes in the Parliament. Where does this leave Ireland? We need to be cautious about setting aside what has served us well over the past 50 years.

I refer to the need for economic stimuli in the current climate. We must be prepared to recognise the sacrifices made by people in this country and also throughout Europe. All European people have suffered as a result of the economic downturn. However, what is now deemed to be Keynesian economics was found in the 1930s and 1940s to lead to inflation which was a significantly undermining feature in the development and stabilisation of economies. Is this the right time for such a policy?

This is not intended as a political point but in 1977, in the midst of an economic crisis, it was deemed appropriate to re-inflate the economy, put more money in people's pockets and generate spending in the commercial sector, in order to lift the economy. In fact, this was the wrong policy because it had the direct opposite effect; it broke the economy and set back its recovery by at least ten years. That re-inflation of the economy caused unnecessary inflation. House prices alone inflated dramatically during that period to such an extent that the Government of the day decided to remove house prices from the consumer price index.

Keynes was supposed to be the hero of the 1930s and 1940s but it was Galbraith who came forward with the suggestion that strict price controls were essential to control inflation which would swallow up any stimulus and drive an economy deeper into the red.