Alan Shatter (Dublin South, Fine Gael)

I will begin by responding to Deputy Michael Ahern's contribution. The temerity of anybody in the Fianna Fáil Party lecturing Members on this side of the House on economic policy is extraordinary. In the context of talking about a credible and coherent economic policy, if this Fianna Fáil-led Government and its predecessors had a coherent and co-ordinated economic policy that took account of economic realities in the past seven years, we would not be in the appalling and catastrophic economic mess in which we find ourselves. A Fianna Fáil critique of Fine Gael policy is the equivalent of a convicted burglar giving advice on house security.

Fine Gael supports the Bill before us today. It is important that we have cohesion and solidarity within the European Union. This State clearly has a real interest in ensuring stability within the eurozone. It is important in dealing with economic issues, both domestically and across Europe, that we have a rational, mature and reasoned debate about economic and banking issues and that we do so without political abuse and name calling. There are distinct advantages to the State in being part of a monetary union. They include facilitating our trade with continental Europe and providing within the eurozone a currency stability that is essential to trade. Being part of the eurozone makes us an attractive location as a gateway to Europe for multinationals from the United State and other countries outside the European Union. We have also had the benefit for a number of years of low interest rates, a benefit that was tragically abused in the context of the property boom and bust.

It is and always has been essential that states adhered to budgetary constraints in the context of government deficits not exceeding 3% of GDP. This was at the foundation of the formation of the euro and the entering by this State and others into the eurozone. Unfortunately, not only this State but Greece, Spain, Portugal and Italy have all failed to adhere to these guidelines. This is part of the reason we find ourselves where we are today.

The European project always involved a pooling of sovereignty. That pooling of sovereignty facilitated this State in playing a role on the international stage greater than warranted by our size and extended to us substantial economic advantage. No one in Fine Gael is denying that is the case. There has been, in recent days, much discussion of the Commission proposals for budgetary oversight which, of themselves, are not inherently objectionable in that if the type of oversight that was envisaged had taken place over the past five to six years, we, in this State, may not have found ourselves experiencing the current difficulties. I am sorry the discussion on this matter has been misrepresented. What is objectionable is that the European Commission or European Parliament might engage in a pre-budget discussion of our macro-economic policy, while the House is prevented from doing so. This is a substantial democratic deficit.

This Government and its predecessor have staunchly resisted reforming our budgetary processes so as to involve this Parliament in a pre-budget consultative process to make choices or at least contribute to the discussion as to what choices should be made in determining macroeconomic policy. I will give an example of what I am talking about. We are told that there must be reductions of €3 billion next year. The savings of €3 billion which Government Ministers have been asked to formulate in a four week period, much earlier than is usual, could derive in a variety of ways. One could have €1 billion by way of a reduction in current expenditure, a €1 billion reduction in capital expenditure and €1 billion in tax increases. One could do it differently and mix the sums. One could have a €2 billion reduction in current expenditure, no reduction in capital expenditure and a €1 billion increase in taxes or one could decide not to increase taxes. One could have a variety of different mixes, all of which would have different impacts on issues of job protection, job growth, economic recovery and competitiveness. Politics is about choices and the House should be involved in making these choices. It should have an opportunity to be consulted before an overall macroeconomic policy or budgetary package is presented at a European level. We need a cost benefit analysis of budgetary proposals and choices open to us. We need to recognise, as Deputy Bruton stated yesterday evening, that financial retrenchment alone will not get us out of the mess in which we find ourselves. There must be policies that provide for job creation and job protection. The difficulty of balancing fiscal accounts by austerity measures in the middle of a deep recession must be recognised. There is a risk that we will do greater damage in administering the medicine by focusing solely on fiscal retrenchment.

The experience of Argentina showed the risk of deepening recession by fiscal consolidation alone in circumstances in which there is no growth policy available. No one should pretend that it is simple for this State to address these problems. For example - I have already made reference to this - we have a national interest in securing the stability of the euro area. There are, however, domestic economic advantages in the reduction in the value of the euro against the dollar. It increases our competitiveness in getting into American markets.

Let us not pretend that the issues that need to be addressed are simple or that there is a monopoly of wisdom on the Government side and there are not Members on this side who can make a constructive contribution in the national interest to the budgetary choices that must be made. Last night, Deputy Bruton, the deputy leader of Fine Gael, made absolutely clear that we must have a growth strategy and retrenchment alone is not enough. We must have particular regard to this. In a European Union context, we must also have regard to the need for greater economic convergence. Public finances are not the only issue to be addressed in the context of the economic crisis confronting this State and other European Union member states.

In the budgetary decisions made, we must also bring people with us, both in this State and other European Union member states in the context of what is proposed by the Commission. We cannot have an elite group in Europe, behind closed doors, exercising oversight on a pre-budgetary basis of macroeconomic policy in circumstances in which there is no public debate in this House. To bring the public with us, achieve social solidarity, the proposals for budgetary changes, the proposals to deal with our growing and terrifying large deficit must be given the oxygen of critical analysis and debate, choices must be publicly made. By all means, involve Europe in the process and discussion but first involve the sovereign Parliament of this State.

These are important issues. I am sorry that as a consequence of the contributions made last week by Deputies Kenny and Bruton the Government sought to name call and allege in some way that Fine Gael had joined the band of eurosceptics. Fine Gael, as a party deeply committed to Europe which wants the success of the European voyage to be maintained, is also concerned to ensure that the democratic deficits in this Parliament and at European level are fully and properly addressed and we have real debate on issues of fundamental importance relating to our economy, the economy of Europe and the eurozone which directly impact not only on our current economic condition but our capacity to recover from the recession in which we find ourselves.

Let us not undermine this debate by name calling. Let us look at the structural deficits that exist in this Parliament and at European level. Let us bring about reform in Europe and this State but let us do so in a considered way. Let us not adopt the approach Fianna Fáil adopted in the past seven or eight years that got us into these difficulties when that party believed it had a monopoly of wisdom, it should never let in the light of real discussion or give value to anything said on this side of the House.

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