Richard Bruton (Dublin North Central, Fine Gael)

Indeed, but no one cried, "Halt" to what was clearly an unsustainable policy. Those who criticised it were treated like pariahs - it came from the Minister's benches. They were told they should go and commit suicide and that they were unpatriotic. They were told the most extraordinary things. Those were the facts. Ireland was not alone in this. Other countries saw the arrival of cheap money as an opportunity to develop unsustainable policies. The most crucial thing which has to change is that there must be an understanding between the elected Members of the Irish Parliament and, through us, the people of this country about what it takes to survive in a small open economy in a difficult fixed currency regime.

I worry about some of the direction of the eurozone thinking regarding the rectifying of the problem which does not see domestic understanding of those issues as the core correction which we have to bring about. At the collective eurozone level there was not an understanding of what was required to make the eurozone work. The Stability and Growth Pact was clearly unenforceable and nothing was done to correct it. The bail out clause did not act in the way people thought it would and it is no longer part of the structure. The growth strategy articulated in Lisbon was simply not carried through and we have the evidence of the Spanish and Swedish Prime Ministers testifying as to the complete failure to implement the growth strategy which was essential to a successful eurozone. It cannot be built on retrenchment alone. That is the narrow focus which we are now seeing.

Member states adopted a go it alone strategy, not only the weak states but also the strong ones. For example, Germany's approach was a go it alone strategy. There was no convergence across the economies and no tools were being developed to deliver that. The European Central Bank chose an extremely narrow target, namely, inflation, when asset price bubbles were building up, in particular in Ireland, and there was no proper response to that. There are deep issues which need to be confronted that do not just revolve around the PIGS countries getting their public finances under control. To listen to this debate one would sometimes think that is the focus and the drive of this debate.

I do not criticise; faced with this crisis the eurozone Ministers and the European Central Bank have been extremely innovative in what they have come up with. The bilateral aid to Greece, the stabilisation fund which was developed jointly with the IMF, the relaxation of the rules by the European Central Bank and some elements of convergence and the co-ordination of fiscal strategy are extremely welcome. They are significant measures. It is hoped this will bolster the eurozone. There has been some doubt as to how successful that has been to date. One increasingly hears key architects of that strategy saying that it is now only a breathing space to undertake reforms; they do not see it as a solution in itself.

There are major missing pieces which are not getting much attention, namely, the continuing lack of a credible European Union growth strategy and supports for structural reforms to create more competitive eurozone economies, in particular in the deficit countries. That has to be part of making this a long-term viable solution for the eurozone. Taken at face value, I can understand how markets look at Greece and see a formula which will shrink the economy in the short term by very tough retrenchment, during which time debt will inevitably grow because it is being supported to allow that to happen and the hope is that in three years' time it will appear to be stronger. One will have a higher debt to GNP ratio after three years of this medicine.

I can understand how markets look in at Greece and ask where its capacity to drive a big export market which will make it a viable strategy is - perhaps they do not see it. It is not surprising that people will look with a jaundiced view at what is quite a narrow dimensional response to the crisis which has been building. I acknowledge that Ireland is fortunate to have a much more resilient export sector and that is the key element which distinguishes us. Greece and Portugal are running deficits of nearly 10%. Ireland is still running a trade surplus.

We are fortunate, notwithstanding the discussion which occurred earlier here, to have embedded sectors which give us an edge and resilience to deal with a crisis of this nature which are not available to others. However, our banking policy, which has essentially involved the transfer of bad loans and failed banks onto the backs of taxpayers, has put us back into the spotlight. It has doubled our debt at a stroke and I have misgivings, as the Minister knows, about the wisdom of that. It is not a least cost strategy and it has put us into the spotlight where one would hope we would not be.

Ireland must also examine whether this process, which has been designed in the eurozone, will work for us. I do not see a credible growth strategy for Ireland coming from the sort of debate and discussion which is occurring in Europe. I have said before, and it is not secret to the Minister, that I do not believe the Government has a credible growth strategy. The approach which I have heard the Taoiseach articulate repeatedly is that we should write whatever cheques are necessary to bail out the banks and correct the fiscal balance - that is the sum total of the strategy. That will not work.

There is a consistent view on the Opposition benches that we simply do not have a credible job strategy and the lack of one is undermining our ability to weather this storm. The danger is that the narrow view of Ireland's needs will now be copper-fastened by an equally narrow perception of the nature of the problem within Europe. We will have the double whammy of an excessively narrow view of what is needed.

Another issue which has to be addressed - the former Taoiseach is hugely culpable for not having addressed it - is that we have a budget system which is not fit for the running of a corner shop. It is a total disgrace. We do not have any system for independent assessment of whether the fiscal stance being taken by Government is appropriate. As a result we have seen numerous reckless budgets introduced which poured fuel onto flames, in terms of economic strategy. Many of those polices were introduced by the former Minister for Finance, who is now the Taoiseach, and his predecessor. There was no system of checks or balances in the House or system to confront the reckless fiscal strategies which were adopted by the Minister's predecessors.

That is a deep flaw in the way we conduct our budget business. The Minister has not suggested any reform, nor did his predecessors. We will not confront the difficulties which we have created domestically by catastrophic policy failures unless we start to change that system. There is no prior scrutiny by Parliament of any of the choices being made in the budget. It galls me to see the Taoiseach trot out and pretend there was proper scrutiny of property tax reliefs. This was an opaque box which would not be opened and Governments and former Ministers, including Charlie McCreevy and the Taoiseach, insisted on keeping them.

Time and again we sought to have the costs and benefits of these reliefs exposed before the budget in order that could have a realistic debate about the sort of choices we made. Time and again that was refused. That was refused time and again. It comes as no surprise that they were left there for too long and built up an unsustainable property bubble because that was the way they system was designed. The Government did not want scrutiny or cross-examination of those measures. It wanted to introduce them like rabbits out of the hat on budget day to curry favour with people who were in the property sector. That is the way the system was run and that must be changed.

It is unacceptable to pretend we can have changes elsewhere and no change at home. No targets were set on what spending would deliver. Year in and year out the Minister came to the House and announced spending in the year was up 12% compared to the previous year. No Minister ever said: "This is what we will deliver and I will stake my reputation on that, and there will be accountability". Instead, we had waste, money was spent, no results were delivered and no one was ever held accountable. That is the system the Minister stands over and will not change. Not today, not last year, not at any stage in this crisis has the Minister shown any willingness to change that.

The system must change if we are to have a grown-up response to the crisis that has been created. The final insult is that the whole package voted on in one final vote and it is all over at midnight. We end up with a budget that has created many of the problems yet no serious attempt is made to address the nature of the budget and its appropriateness to our needs. The system must be reformed.

I would have been encouraged if the Minister had indicated a willingness to respond to what is needed. To give the European Union its due, it has referred to the need for some parliamentary involvement at an early stage. I would have welcomed a reference from the Minister of the need for serious parliamentary involvement throughout the process and for proper scrutiny and the examination of options. If that had been said we would be encouraged to see that things are changing, but that is not what is happening. The real problem is that we are now having foisted on top of the current dysfunctional budgeting system a pre-vetting system that will take place in Europe. I worry about how that will impact on future budgets. We need to question such an approach and to examine whether it will provide the type of economic strategy that the country needs. There are strong reasons for suspecting that it will not.

It is not just that I am unhappy with the Minister's strategy, but the Commission itself has not been successful in developing a growth strategy. Its understanding or ability to implement the broader element required to make the eurozone a success is seriously open to question. The more I read the clearer it is that the primary focus of European finance Ministers is fiscal retrenchment. It is the sum total of the recipe that is evident. I do not detect a need to confront the fact that Germany is running huge surpluses and is pursuing a strategy that is dramatically different to what is necessary to have a convergence of economies within a single zone. Just as the deficit countries have to learn to live in a eurozone, the strong countries also have to learn what it takes to lead a successful currency zone that will work not just in the short term and for all the members.

I worry too about the pre-vetting process. Before the wider civil society of the community come to confront the problems there will be a grave sense that the thing is stitched up, that a decision has been taken by Government and the eurozone and then we are in a straitjacket. Let us be honest; the only way we will solve our problems is if wider society shares a sense of commitment and a unified sense of purpose around core strategic changes that we will undertake. That is what we must secure and put in place. I do not deny that Europe has a very important input to make into the debate. Nor do I deny that Europe has a right to impose sanctions if we wilfully ignore the interests of the eurozone. I fully agree with that. However, I gravely worry about a system that involves pre-vetting of budgets and pre-setting of sanctions and only when the budget arrives in the House would it be available to the wider civil society to debate the options to resolve the crisis.

The thinking of the eurozone is too narrow. We will not enlist the vital support of the broader community if that is the way it is perceived budgets will be developed in future, namely, the Government will go to Brussels where the parameters will be set out and penalties will attach to any deviance and then one hopes people will rally around. That approach will not work although I would support it.

Far from being a eurosceptic, I recognise that the eurozone has to make serious changes if it is to succeed but I do not subscribe to the view that prior fixing of the budgetary stance will serve us well. Governments in France and Germany are saying something not dissimilar to what I am saying. I am not in a eurosceptic band of one. Many take a similar view about the role of national Parliaments. That is not to say we do not understand the vital importance of the eurozone. We understand its needs and we accept we must integrate them into the way we think.

It is vital that Irish parliamentary democracy and the people we represent takes ownership of the process of becoming successful members of a eurozone that imposes real constraints. In the good years we did not learn to manage with those constraints and we must learn how to do that. Far from dismissing the criticism I have heard from numerous Ministers, the Government should be spelling out how it will radically reform the budgetary system so that we start to get a broader view. We need to internalise those necessary corrections of the catastrophic policy errors that were made in recent years. We can only do that if a new strategy is developed at home for job growth, reform and transformation and creating a much more successful country than the phoney success that passed as achievement in the Celtic tiger years. It was glitzy and garish but it did not represent the sort of success to which society genuinely aspired.

We must get to grips with some fairly unpalatable changes in our community. First, we have to revolutionise the way we spend money. The Minister must take responsibility and commit to that as part of the process. We need to undertake deep-seated reform in the way we structure and deliver public services. The Croke Park agreement is singularly unambitious in terms of the sort of transformation we need in order to provide public services. The change we need must be much more dramatic than what is being envisaged, namely, longer working days and the ability to deploy staff from one place to another. Welcome and all as those changes are the wonder is that it has taken so long to get to them. The highly centralised command and control system that we have foisted on many parts of the public service and that is underwritten by the national agreements are hostile to the kind of reform required to deliver value at local level. We need to recognise that and to start devolving power.

Every analysis of the public service from the OECD report on has been highly critical of our unwillingness to devolve power and make people accountable for results. We set up quangos but they have vague mandates and no accountability. We must embrace serious reform and that is equally important if we are to get our fiscal correction right. We must have an ambitious plan to build strong economic arteries such as the electricity system, broadband system and water system. They are creaking at the edges and are uncompetitive. We will not build a strong export-led recovery based on the current standards of those facilities. That must be core to a successful recovery plan. We need to move rapidly to have policies that will keep young talented people at home.

Eurozone countries looking in at Ireland will regard the movement of people to work in Frankfort, Sydney or New York as a good thing because it represents labour mobility. We have a different view of the issue, however. We do not want to see the talented people who can create a strong economy at home going to other countries to make a living. This is why it is important that we maintain control of our people's destiny.

I support what is being done here but I want to see a more robust agenda of reform at home and an emboldened Minister who can say on my behalf - because I will not have the opportunity to do so - that our Parliament wants to come to terms with the mistakes we made and to shape our own destiny. We do not want to be second fiddle to programmes designed elsewhere. The European Commission is making proposals but many other governments think like I do. Together, we can use this opportunity to create something genuinely better with parliamentary participation at the core. Paradoxically, the biggest obstacle to the scrutiny we need in this House is at home rather than in the Commission.

I would like to raise several questions about the Bill in advance of Committee Stage. What will be the status of the Irish money? It appears that, parri passu, it will have the same status as the rest. The strategy rightly has been criticised as replacing bank loans with state funds. When the IMF deals with this type of situation, does it act in the same way or does it accord preferential status to the new money it introduces? What is IMF practice in regard to supports of this nature and are we applying similar techniques? The Irish taxpayer would be interested in knowing how this will work.

Who decides if Greece is not compliant? There appears to be a vagueness in this regard. I am aware it is supposed to achieve a deficit cut of 11% but how will that work out in practice? If it produces 10.5%, will that be the end of the loan facility and who will make the judgment call? At an earlier stage, I got the impression that each government could decide to be involved on a case-by-case basis after an examination of Greek performance. Is it now a collective decision and, if so, on whose recommendation will it be made? How will that process work? It is important to the credibility of the exercise that it be successful. Clearly, people do not want to see backsliding from the commitments that have been made but equally they do not want such officious application of tests that they become unrealistic or impose unfair terms on the Greek Parliament and people. What happens in response to unforeseen events? If Greece's 11% deficit cut turns out to be based on forecasts of growth that do not materialise, how will that be addressed in practical terms?

I welcome that the Minister will revert to the House on the other dimensions in a legal form because that will give us an opportunity to debate the issue as it develops into a package of measures. Perhaps we will actually see some openness while the Ministers negotiate so that we can hold a parallel discussion.

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