Dr. Seán Healy:

Deputy Dooley asked what we can do about this as political organisations, and that must be addressed. My organisation conducted the first ever study on the impact of austerity measures on the five programme countries at risk, Greece, Portugal, Ireland, Italy and Spain. That was published in February. We are completing an updated version which includes Cyprus and Romania because we wanted to take in a country that was not in a good space but was not in the traditional western European social model. The same kind of approach was used in all the countries in pushing austerity. There were some differences, for example although Italy has a substantially higher total tax take than Ireland, its adjustments were accepted and involved a €2 increase in taxation for every €1 in cuts. That was decided by the Italian Government and accepted by the troika, the bottom line being that it had to reduce its borrowing each year.

We have maintained this position all along. We have met the troika on most of its visits here over the last three years and they have constantly told us they do not decide what the proportional base should be but that they insist only that the overall target should be reached. Speaking at our conference on Tuesday, the leader of the troika in Ireland over recent years, Dr. Istvan Szekely from the European Commission, made that point. That is in the publication. There is an issue there. We have seen huge increases in poverty and huge impacts in unemployment and social services being eroded. A very serious set of issues must be addressed in Ireland and across other European countries. We continue to analyse that.

We are strongly of the view that without investment there will be no jobs, without jobs there will be no recovery, and without recovery we will be stuck in austerity, so investment is critical. We must do this investment in a different way from just borrowing money as a State because we are already maxed out. My organisation has produced a policy briefing on how this could be done with a special purpose vehicle which the Government is using and has used in other contexts over the years. The point is to generate an additional €7 billion over three years to do the kind of investment the Government is talking about, but over a much longer term.

We found, in discussions with the Department of Finance, that the ECB is setting rules that try to block us from doing this. We have to pay back the money to the ECB and that is fine. Our proposal would have created approximately 65,000 jobs. Many of those people would come off the live register and would save the Government social welfare expenditure. Those people would pay tax, increasing Government revenue. We calculated the total benefit would be approximately €2.9 billion. For some reason the ECB has a rule that says we could not use that money to pay off that debt. With due respect, where is the social dimension of EMU with that totally arbitrary rule? That is the information we get from the leadership of the Department of Finance. It is a simple example of the problem we face.

I could say much about Deputy Durkan's comments, but I will not. I am happy he supports a financial transactions tax. We should be prepared to go with it if ten or 12 countries, particularly the bigger ones, go with it, and they are prepared to do so. We half agree on that. I want to address this analogy of us as a prudent household. Let us take a normal household and examine what it would do to be prudent. They pay their bills every year. They have only small debts and would be well able to pay them off over a relatively short period of time. The Irish Government did that up to 2007. It paid its way and had a budget surplus in all but one of the previous ten years and kept its national debt to GDP ratio at one of the lowest levels in the world.

The local bank manager of this household did serious gambling in his own business and ran up big debt. His solution was to transfer that debt to the household and let them pay it. That is exactly what has happened, and so the analysis is wrong because it protects the banker who gambled. We argue that the burden should have been shared. We must take responsibility for having poor regulation, so it will cost us a certain amount, but the bankers and bondholders who were gambling should never have got all their money back.

That is the fundamental error. I agree with the Deputy-----