Eamon Gilmore (Dún Laoghaire, Labour)

We must also look at the VAT situation. The flood of consumers going over the Border cannot be ignored. Equally, falling prices are likely to result in consumers postponing their spending. A temporary cut in VAT would have the effect of boosting incomes and would also help to shift the growing expectation of falling prices.

There has been a similar shift in sentiment among the buyers of Government bonds. The benchmark measure, namely, the yield on ten-year paper compared to German bonds, or the Bund Spread, has widened dramatically in recent weeks. Germany borrows ten-year money at 3.2%; Ireland borrows at 5.65%. Clearly, there are strong fundamentals driving that market but the rising rates are also the result of incompetence and inaction.

So far, the Government has made five major policy shifts on Anglo Irish Bank. On each occasion, the remaining banks were the subject of unwelcome attention from the financial markets. The Government cannot even get its story straight as to what happened on the night of the guarantee. We are also suffering the effects of a failure to set out a credible fiscal strategy for the next five years. For months, the Labour Party has been calling for a medium-term approach to the fiscal and economic crisis. The stability pact update published in January is not a plan but an accounting exercise.

The third component required is competitiveness. We all know that Ireland must begin to wean its economy from reliance on construction and get back to the business of selling goods and services in the rest of the world.

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