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

I welcome our guests and thank them for their statements. It is no harm to ponder what happened over the past couple of years and the advice we politicians got. We were regularly told there was no need for a rainy day fund, for example. We did not have a substantial rainy day fund but we did have borrowing capacity, which we would not have had if we had diverted our energies in a different direction and decided to spend and spend. Fortunately that was not done. We are now in a different, very challenging situation. Hopefully we can manage it, as long as the economy holds and as long as the corporation tax returns remain stable. It is said we cannot depend on them and that is correct; we cannot. At the same time, we have to rely on them to some extent as we move forward. If we do not, then we could be staring over a chasm that we might not like.

Let us look at the degree to which the economy is going to be challenged by inflation over the next couple of years. If one looks across the water, I have listened to some things in the last couple of days that frighten me in terms of energy costs that will do everything but cripple the economy. They have access to independent energy themselves; we do not. We are in a slightly different situation. We have to plan ahead because this international conflict can go further and for longer and can cause a lot of damage in its path. The present trend as far as Mr. Putin is concerned is to do precisely that in retaliation for sanctions. Given that is the layout, we need to decide what we are going to do next. It is not tenable over a long period to pay the household bills of the nation. That is spending on or supporting current borrowing. It never worked before and will never work. It is dangerous territory to rely on. We got into a situation previously in the 1970s, for instance, when there was an energy crisis.

At that time there was a cap, theoretically anyway, because Europe indicated it was not willing to pay the high prices that would prevail. The result was that the supply was cut off. There was nothing there. We had queues at filling stations all over the country. That can happen again; there is no question.

We must also be careful about how we punish those taking an unrealistic profit from the crisis. That must be done selectively and carefully, so that they do not react in the same way that oil and gas companies did in the 1970s because if they do we have a problem. We must consider the underlying importance of continuing high employment, because that is the basis on which we can go forward with some degree of reassurance. Otherwise it will be like we are bidding against ourselves at an auction. We can continue to support the domestic economy, beat inflation which in turn reacts to the money going in and so on. There has to be an estimate of how far we can go without damaging ourselves and our potential.

I will make my last point. Our guests can see I did not wait for any answers. I am operating on the basis of what happened before and what can and will happen again. It is essential that we prepare ourselves for the shock and at the same time we reassure the people of the country that we have the capacity to deal with the situation within reason. That capacity is our borrowing capacity which we still have.

We spent €48 billion on supports during the Covid crisis. That is an awful lot of money. If we had €48 billion more to spend now, we could win. If we had we not had to deal with Covid, we would have the €48 billion to spend in an emergency situation, which that was. I am not offering any solutions but I have seen this before. Everything repeats itself. That is the way economic phases go.

A point was made, incidentally, about interest rates going up in the USA and the UK. That is also a threat. It shifts the financial markets in their favour and against us and-----