Timmy Dooley (Clare, Fianna Fail)

I welcome the opportunity to contribute to the debate. Yet again, we are discussing an Opposition proposal that purports to somehow resolve our current economic recession and our fractured banking system. This proposal is unique in that it purports to resolve both but, yet again, it is a case of smoke and mirrors.

The Labour Party sets out the problem. We all know we are going through one of the most difficult recessions since the 1930s, we know there is a very significant increase in unemployment and we know its magnitude, we know the threat of emigration, we know the infrastructural deficit in our society and we certainly know the impact of the inability of small and medium enterprises to access credit, working capital and funds to keep their businesses going and to continue to employ people - we are all clearly aware of that difficulty. However, the Labour Party proposes some kind of strategic investment bank which, while it sounds great, is big on name but light on detail.

One can set up all the quangos one likes to solve a problem but one cannot do so in a dislocated way. This has to be part of the wider economic situation. Until such time as we bring a resolution to the problems that exist within the economy, setting up another institution or quango will add nothing. It has to be part of a holistic approach to managing our way through the problems.

It is not just as simple as producing this investment bank. If one wants to invest in infrastructure, the economy or jobs, one needs money to do that. We know that money comes from the markets - it does not grow on trees any more, to the surprise of some of our senior bankers who seemed to act as if it did. To be able to draw money from the markets, there must be confidence. In particular, there must be confidence in the ability of the Government to pay back the moneys that are lent to it, and there has to be a return for the investor. In the real world, therefore, this so-called monopoly money that was floating around for years no longer exists. The Labour Party proposal suggests there is monopoly money out there that will fund this bank and somehow resolve the problems without first dealing with the resolution of the crisis we face.

The Government has put in place policies which are focused on controlling public spending. A plan is in place to balance the books or at least to bring us within 3% of the borrowing requirement set out in the Stability and Growth Pact. Following this plan gives confidence to the markets and allows us to borrow at reasonable rates to fund the deficit and, more importantly, to fund the capital spending requirements of the State.

We have set about resolving the banking situation. NAMA is working well. It is about cleaning up the balance sheet.

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