Eamon Gilmore (Dún Laoghaire, Labour)

The world around us is changing very rapidly. Our current difficulties owe a lot to mistakes made by Government and to its lack of urgency in addressing the crisis. However, we must also realise that we are witnessing a major crisis in the structure of globalised capitalism. There is no certainty that we will return to the system as it existed before the credit crunch and the collapse of Lehman Brothers.

There were fundamental imbalances and injustices in that system which were always going to be unsustainable. In a recent article, Professor Joseph Stiglitz makes the point that the lifestyle of the developed world was in fact being financed by borrowing from the developing world. Sub-prime mortgages were financed by the trade surplus of countries such as China and were the flip-side of the US trade deficit. The sub-prime crisis was also driven by inequality in the US, where people in the lowest income bracket had not seen a real increase in incomes since the 1980s. Stiglitz makes the following point:

A few years ago, there was worry about the risk of a disorderly unwinding of global imbalances. The current crisis can be viewed as part of that, but little is being done about the underlying problems that gave rise to these imbalances . . . we need not just temporary stimuli, we need long-term solutions.

It was never supportable or sustainable that the US would have a carbon footprint of 20 tonnes per person while China's was 3.8, or that the average carbon emission for high income countries was 13 tonnes compared to less than 1 tonne in low income countries. Nor is it supportable that 1 billion people live on less than $1 a day, that the richest 500 people in the world earn more between them than the 416 million poorest, that two senior bankers could earn more in a year than Malawi spends on its health service or that the CEOs of the top 15 US companies earned 520 times the wage of the average American worker. That kind of structure was never sustainable and it was never right.

Globalisation has brought billions of people into the global trading system. That can be a major benefit to humanity but we need a world that is constructed in a sustainable and just manner. These are not academic considerations. The question we must ask ourselves is what will the new global order be and what will Ireland's place be in it. We were and still can be one of the richest countries in the world but what will the world look like? What industries will grow and which will contract? Where should Ireland position itself in the new global order?

In all of this, the EU has a vital role to play. For a brief moment last year, we saw Europe assume a leadership role in world affairs. That has faded, partly as the natural consequence of the change of President in the US but also because of reluctance among some countries about pushing ahead with the EU stimulus package. A recovery plan, based on confidence, credibility, and competitiveness, has a good prospect of success. It should be fair and should be seen to be fair. It should be focused on stimulating the economy, not shrinking it. It should follow the logic, set out by the European Commission, of using public investment to deliver short-term stimulus and long-term competitiveness. It should seek to create jobs and to train and educate people for new jobs. While this is a profound crisis, it is also an opportunity to re-gear our economy, to provide the schools our children deserve, to make our economy more sustainable and to create a new sense of fairness and solidarity.

What is happening in the economy is very frightening for some people. People are losing savings, jobs and businesses. They know these are difficult times and that there is more to come. However, they also need to be certain that the solutions put forward by those who represent them will help them weather the storm. They need to know that there is as much talk of security as there is of sacrifice. We can get through this. There will be an end to the recession. The solutions to this economic crisis need to reassure our fellow citizens and our young people that they will still be standing when the economy recovers. Standing and ready to contribute to a society that values fairness and the common good over self-interest and greed, and ready to grow an economy that is competitive, sustainable and fair.

Debate adjourned.

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