Dáil debates

Tuesday, 11 May 2010

4:00 am

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)

-----and it is a matter of continuing discussion. However, it is something we need to look to in order for the banking industry to re-establish credibility with the public. An international transactions tax, if globally applied and in a way that does not undermine Ireland's competitiveness, is something I do not have any ideological problem with as long as it is pragmatic, effective and efficient.

On the question of speculation, the bottom line is that this will occur where weaknesses are identified. That is what happened in the current situation. Clearly, beyond the Greek situation a bet was being taken as to whether the euro was in a position to survive. The sovereign debt issue was even being questioned, not just institutional or private debt. Clearly, we faced the prospect of a second financial crisis, where the indebtedness of states was being questioned in terms of their ability to repay.

The response over the weekend has had the intended effect. However, at this point it must be accompanied by the fact not just that a contingency measure has been put in place to support the currency by member states, but also that further structural adjustments will have to be accelerated for those countries for whom this applies. Deputies will have seen that Spain and Portugal have indicated that they will have a report from the European Commission by mid-May or June, I understand, to look at that situation as well.

There is no room for complacency in this country, either, or for self-congratulation in our situation. We need to acknowledge, however, that having taken the steps necessary we are being believed internationally. We now have to build domestic confidence at home. One way we can do that is through the budgetary process we have outlined. A €3 billion adjustment for 2011 is certainly a possibility but there have been no formal or informal indications from the European Union that it requires or expects anything beyond that level of adjustment at this point. In any event, it is in Ireland's interest that we make this adjustment. We would always look to the European institutions as being supportive, and work with them on the basis of a common analysis to the effect that Ireland has established a certain degree of credibility and that we must now proceed along these lines in order to effect an economic recovery strategy that will have credibility abroad as well.

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