Pat Breen (Clare, Fine Gael)

I am delighted to have the Minister for Finance and the next Minister for Finance in the Chamber. Former President Harry Truman once said "It's a recession when your neighbour loses his job; it's a depression when you lose yours." As the current economic crisis rages throughout the world, many analysts are describing the situation as the worst financial crisis to hit the global economy since the 1920s.

I was at a Council of Europe meeting this morning where we had a hearing on the world financial crisis. We met people from the IMF, the OECD, a top banker from Société Générale and President Sarkozy's economic adviser. What the OECD had to say was interesting. The representative said we could expect the recession to be deep and long, worse than the recession of the 1980s, and that it will be at least 2010 before things get better and return to pre-turmoil levels. In the meantime, unemployment will rise sharply, the housing market has some way to go before it hits a low and the only positive news is that oil prices are down and this will help things along the way.

The representative said we are entering a new period of globalisation. G7 has become G20 and it met last week in Washington and identified the problems. One of the interesting comments was that only 18 of 27 EU countries have bank liquidity rules. We have an extraordinary crisis and a major challenge. The OECD representative said that countries like Ireland would feel the pinch much more and get more pain because of our dependance on the housing sector.

We were talking about recession; unfortunately, this Government has turned it into a depression. One of the greatest tests of leadership is the ability to recognise a problem before it becomes an emergency. The Government has shown little leadership and as a result Irish people have lost trust in the Government and in the Minister. The budget targeted the most marginalised and vulnerable people in our society. It was full of half-baked proposals. As a result it was forced to do many U-turns.

No sector of society has escaped the crisis. The inability to access credit is crippling many of our small and medium sized businesses. The recapitalisation of our banks is necessary to ensure those businesses can get access to much needed credit.

Previous speakers referred to what happened in the United Kingdom this week when the Chancellor, Alistair Darling, reduced the VAT rates and announced a series of other measures to stimulate the economy. As Deputy Deenihan said, we have already witnessed a mass exodus of people travelling across the Border where they are getting more favourable rates for the euro because of its strength against sterling.

That reduction in VAT rates is set to compound the problem here. In recent days I received a number of calls from business people in County Clare who wanted to know what the Government was doing about the problem. Many of them will be out of business by Christmas if something is not done about it but rather than introducing strong measures in the Finance Bill to assist those retailers, the Government has done the opposite. It has introduced an income levy and increased the rate of VAT, which will make many Irish goods much more expensive.

I welcome the strides in the Bill regarding research and development and the credit regime but I am extremely disappointed that regional development took a major hit in the budget, particularly the shortfall of €1.3 million in funding for Shannon Development, which could see grant aid to industries reduced at a time when those industries need extra support.

Today we witnessed the effects of the open skies agreement, with Delta Airline's announcement that it was ending its Shannon-Atlanta service from next summer. The recent announcement of the US customs and border protection facility at the airport is welcome but passenger figures are on a downward spiral in Shannon.

The air travel tax was unwise, particularly with the downward trend. The Belgian Government had to cancel its plans to introduce that tax. I appeal to the Minister to re-examine this travel tax and the damage it will do to regional tourism.

The cutbacks in the farm installation aid and the farm retirement scheme will have an impact on young farmers. Many elderly farmers will be forced to continue working while, unfortunately, younger farmers may choose the emigration route.

The EU President, José Manuel Barroso, announced today that the European Commission has proposed a €200 billion plan to revive EU economies. However, it appears the Irish Government is to opt out of this proposal. The Minister might comment on that when replying because it is an important issue. I am aware it will be discussed at the EU Heads of State meeting on 11 and 12 December. I ask the Minister to clearly outline the reason he will not sign up to those proposals.

Does the Government have a strategy? How does it intend to restore confidence in the economy? The Minister said this Finance Bill contains a mix of measures which have struck an appropriate balance between the need to protect low incomes and restore stability to the public finances. I believe it does neither. There is no plan or strategy. There are no ideas coming from the Minister's side of the House. The country needs a clear strategy. Ordinary men and women throughout the length and breadth of this country are very worried at a time when we need someone to lead this country out of the recession and not into a depression. People need reassurances. That is very important to them. Sadly, they will have to continue to battle their way through the crisis without any leadership from this Government.

We face an extraordinary crisis and a real challenge but with real leadership we can overcome that challenge, as many of the speakers said at the meeting I attended this morning in Paris.

See this speech in context