Dick Roche (Wicklow, Fianna Fail)

The first point which should be made is that the proposals for improved efficiency and competitiveness in residential mortgage markets are, as Deputy Durkan mentioned, in a general sense very welcome because consumers will benefit. The manner in which these proposals are being handled demonstrates that the mythology propagated by Libertas and a number of other europhobic organisations in this country about how European law is made, and the particular suggestion that European lawmaking is a closed shop, is absolutely false. Nothing could demonstrate more objectively just how false those assertions are.

Another point which should be made is that the extraordinary step-by-step approach adopted by the European Commission in the matter gives lie to the suggestion that somehow or another European laws are rammed through without any kind of discussion, consideration or democratic input. Nothing could be more democratic than the approaches being adopted here.

Deputy Durkan and his committee have made a very valuable contribution and not just in terms of the national discussion on this matter. They have used the Barroso initiative to make a specific input into European-wide consideration of this issue particularly welcome. This must be put on the record of this House because we have had more mendacious and inaccurate statements about the process of European lawmaking than we have had on just about any other issue.

The White Paper on the integration of EU mortgage credit markets summarises the conclusions of a very comprehensive review on the functioning of the level of integration of EU mortgage markets. It presents a package of measures to improve the efficiency and competitiveness of EU residential mortgage markets. This packet of measures, when finally operational — we are some time before that date — will be of tremendous benefit to consumers and will increase and enhance consumers' rights.

The objectives of the White Paper are to facilitate cross-border supply and funding of mortgage credit. I agree with the well-made point by Deputy Durkan that this is not an end in itself but it should be part of a step to improve competitiveness and consumer choice. It will increase product diversity, improve consumer confidence and facilitate consumer mobility, which are the objectives of the proposition.

The White Paper states that in 2008 the Commission is to investigate the following issues and assess the costs and benefits of different policy options available to it in its efforts to tackle each issue. The point must be made that the European Commission has broken down all the different elements and is stress-testing them. It is putting each of them before committees made up of representatives of member state governments, interested parties and national parliaments. It gives lie to the suggestion often made in this State that, somehow or other, European law is plucked from the atmosphere and imposed on member states. Nothing is further from the truth, and it is time we began to nail those particular lies in this country. The issues are inimical to our interest and run counter to the facts. The public in a democracy is always entitled to unadorned facts.

I compliment Deputy Durkan and his committee, which has struggled long and hard with this White Paper, which is difficult to read. They have put much time into it and their effort has been largely ignored. I hope that in particular the national broadcaster will tonight put some effort into redressing the balance of these issues and give the committee and its extraordinary work some airtime.

The White Paper will consider a series of complex issues, such as the point touched on by Deputy Durkan, namely, early repayment. The Department of Finance is keeping a very close eye on that because, as the Deputy pointed out very well, we have a particular set of circumstances here which are caveat emptor not for the buyer but for the lender. The issue of improving quality and comparability of information is also being dealt with in this. It is a critical area because it is urgent that those who receive mortgages are fully aware of the implications. It will also promote responsible lending and borrowing. What in the name of goodness could be more relevant to the current economic climate than responsible lending and borrowing? As Deputy Durkan has illustrated, we have all become painfully aware of the effects of irresponsibility in the area.

It illustrates the perverse nature of the debate sometimes undertaken in this country. How can anybody argue these steps are not called for when they must be? How can anybody argue that doing all this work on a pan-European basis is not the most efficient and effective way of dealing with the matter?

The Commission has established a series of expert and study groups, one of which is dealing with financial histories to examine ways to improve accessibility, comparability and a completeness of credit ideas. Ireland is represented on that by a member of the Irish Credit Bureau. The White Paper also notes the efforts of the Commission and the member states on financial education and improving financial awareness within the general public. This will be a very powerful tool to help customers choose the right products and services to meet individual needs.

Another area of focus for the Commission is the follow-up of earlier work on securitisation and it may establish a working or expert group in this area. This could be nothing but beneficial. Further research is to be undertaken in areas such as the role of the regulation of non-credit institutions in EU mortgage markets. For example, the Commission has also published draft recommendations on land registration, foreclosure and property valuation. The Department of Finance has consulted with the relevant stakeholders on the draft recommendations and responded to the Commission on this issue. This illustrates again, as if it is required, the reality that nothing happens out of the air at European level. Each individual stage, line, paragraph, full stop and comma is examined at national level.

A study began earlier this year on the equity release products in EU markets and a study on tying-in and other unfair practices has recently commenced. Tying is unfair because people are exposed to additional costs over and above their mortgage payment. A further study on the use of interest rate restrictions in member states is set to follow up on this at the end of the year.

I mention all these points to illustrate the extraordinary detail in which the European Commission, member state governments, national parliaments and the people who care about progress not just in this country but in Europe take to ensure measures we are intending to take are not only timely but appropriate.

Ireland supports the moves towards a single European mortgage market. The programme for Government specifically refers to this issue and indicates particular priority should be given to the retail and financial services area. Many of the initiatives discussed in the White Paper are already in place in this country, such as regulation of non-credit institutions, which includes sub-prime lenders, and a ban on the linking of services.

We agree with the Commission's position on stressing the importance of mortgage credit for European Union citizens, the citizens of Ireland and the economy as a whole. We also agree with the tackling of barriers in order to achieve greater integration of mortgage credit markets. As Deputy Durkan has said so succinctly, it is not just to create some wide market but rather a market where the consumer is king and well-informed.

The approach used by the Commission, which relies on the rigorous impact assessment of various policy options for all issues, is very welcome. Each issue is being examined in an open, transparent, democratic and very thorough way. That is as it should be. Notwithstanding the need to protect further and empower consumers, we recognise the potential for integration is determined by a range of factors which includes, for example, culture, language and customer preferences, and further integration is likely to be supply-driven rather than demand-driven.

Deputy Durkan's point in this area was apposite. Ireland shares the Commission's view that further work is needed to develop the European policy framework for integration of mortgage credit in Europe and assess the need for legislation. In particular, Ireland is concentrating efforts on two key areas.

Early repayment is one of the most important issues for the integrated EU mortgage market. The Consumer Credit Act 1995 already provides consumers with considerable rights in cases where they want to pay off loans earlier and we are anxious that these rights will not be diminished in any way. We will ensure that is the case in this area. Most other member states have a preponderance of long-term, fixed rate and-or bond financed loans, redemption of which may involve a substantial cost and hence, a redemption fee, which itself can be substantial. We are concerned that any effort at harmonisation could adversely affect the consumer protections we enjoy in this area. We will make certain that does not happen.

Deputy Durkan has made a wise point in saying that any proposal at shortening or quickening of forced sales procedures should be examined with the utmost care. As he indicated, the slow procedures that operate in Ireland have the unintended but positive consequence of encouraging creditors to seek mediation and to renegotiate loans in the first place rather than the pursuit of costly and drawn out legal proceedings. It is correct that lenders be aware that their recklessness is something that should be visited on their heads not on the heads of unfortunate mortgage borrowers.

The Joint Oireachtas Committee on European Affairs has produced its report on the White Paper and that report has been submitted to Europe and is now part of the process of European policy formulation. That is the exemplar of the way European policy will develop, and that will happen to a greater extent if the Lisbon treaty is put into effect because then each and every national parliament will play a much more active, open and democratic part in Europe.

I put on record my personal appreciation of Deputy Durkan and the members of the committee. I wish the media, especially the national broadcaster, which receives huge support by way of licence fee, would play its part and highlight the work that is being done, and let the Irish people see that we have a democratic law making process at European level, as we have at national level.

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