Stephen Donnelly (Wicklow, Independent) | Oireachtas source

I thank Ms Breheny.

I would like to ask Mr. O'Mahoney about risk. The capital markets union seems like a good idea. One removes transaction costs, improves the free movement of capital and makes it possible for Irish-based investors to look at opportunities in London or Berlin, while investors in those areas can meet with Mr. O'Mahoney's members and do debt for equity rather than making straightforward loans. The free movement of capital is a fine idea until one looks at what it has actually done around the world for the last number of centuries. While a great deal of wealth has been created by the more efficient redistribution of supply and demand for capital, a great deal of damage has been done as well. Most of the growth we see in the USA, Europe and Ireland relates to debt. It is not real growth. It is not something any engineer, scientist or business person would recognise as growth. The Federal Reserve and the ECB are printing money and giving it to banks for free. Those banks are buying sovereign debt and becoming vastly wealthy for doing nothing. We were meant to deleverage. We all saw in 2007 and 2008 what happens when one has debt-fuelled growth and the amount of capital in the system far exceeds and outgrows the underlying real economy by a huge factor. It is happening again.

We have not deleveraged and, in fact, we are on the way back up again. The Federal Reserve has printed a vast amount of money and now the ECB is doing the same.

One of the risks of the CMU is that it facilitates more and more debt. The members of the organisations present are the producers. They are the people who must take on this debt and then sell widgets, services and products to pay it back. Are they concerned? Is the Chambers of Ireland concerned that it has been made easier for hot money to arrive over from the Valley, Japan or wherever there happens to be free cash? In Australia there is an asset price bubble, which means there is a load of extra cash. What happens if that suddenly arrives in Europe and Ireland? That hot money will drive up asset prices and leave members of the organisations that are before us today massively in debt. They will find themselves unable to pay it back when all the asset prices and economic activity go back down. Is there a concern among the witnesses' organisations that the CMU will make it easier for hot money to get into the Union and move within the Union, and that this will drive up asset prices and create a false economic growth that is ultimately damaging to their members?