Jim O'Keeffe (Cork South West, Fine Gael)

I expected a constructive speech from the Minister of State with responsibility for European affairs but was hugely disappointed by the absolute lack of any constructive comment. However, I will let that be because what is important is that the core message from the Irish Parliament is that it supports financial stability in the eurozone and that Ireland is willing to play its part in full in ensuring this will happen. Anything that distracts or detracts from that core message is damaging to this country, Europe and the eurozone. That is the main reason I criticise the speech of the Minister of State with responsibility for European affairs. Even from the point of view of self-interest, it is in our interest that we have financial stability because this will impact on the premia we will, unfortunately, have to pay in years to come and the billions of euro we will have to borrow.

Why are we in this situation? It is necessary to understand that clearly when speaking about a Bill of this nature. The recent economic crisis has no precedent in our generation and it has severely challenged the functioning of the EMU exposing fundamental weaknesses in the EU economy. The European Commission's recent proposals have rightly pointed out that surveillance procedures have not been comprehensive enough. As the Commission states in its proposal document, in some member states revenues were temporarily boosted by tax rich activity driven by unsustainable booms in housing, construction and financial services. Is it not very obvious about whom it was talking? Right in the firing line is this country which, unfortunately, has been under the control of a Fianna Fáil-led Governments for the past 12 years. We have already had an admission from members of Fianna Fáil of the awful mistakes made which contributed largely to the problems we face. However, we are still waiting for the mea culpa. There has been no apology.

I wish to comment on some criticism from across the floor about Fine Gael. It is our job as Opposition Members to tease out the details of proposals emanating from Europe given the deep impact they will have on us. We need to think about this bailout in the context of our financial system and its role in the economy. I am aware of the criticisms that have been expressed about bailing out banks and countries. The good performance of a financial system basically requires efficiency and stability. We have a clear duty as EU member states to ensure the eurozone is both stable and efficient.

We need to react quickly to stabilise financial markets. Stability requires us to maintain the function of the financial system not for the benefit of financial institutions, but so that it can facilitate the economy. We must also put in place mechanisms to prevent financial problems from becoming systemic or threatening the stability of the economic and financial systems. We need to reduce the uncertainty which currently looms over Europe's sovereign debt if we are to ensure the longevity of the eurozone. We have a responsibility to defend the euro as a credible currency.

The initial reaction of the markets to the rescue package was positive, just as they reacted positively when Ireland decided the glory days were over and that it was time to start governing itself properly. The continuing decline of the euro suggests, however, that the initial positivity has waned. I welcome a weak euro from a tourism and export point of view. It will also help us to deal with the loss in competitiveness we have suffered in recent years. However, we must also consider the impact on our imports and other costs because of the potential for inflationary pressures. A weaker euro that results from fiscal uncertainties is not a wonderful place to be. We must be prepared to communicate to the market our willingness to stand behind whatever measures are necessary to stabilise the euro.

We are inherently interdependent and we share risks with other member states. This is clear from the premiums we pay for debt. Recent events demonstrate that the bond vigilantes pushed up yields on Greek, Portugese and Spanish bonds. We recently completed a successful issue of a ten year bond at 4.7% but that compares unfavourably to 4.4% in March. We are affected by what is happening in other countries. It is in our interest, therefore, to ensure that the bailout measures are successful.

This brings me to the issue of fiscal and budgetary rules. The Commission's approach is that prevention is more effective than correction. It is clear that member states failed to build up adequate buffers during the good times. Fine Gael has been raising this issue for the past ten years but nobody listened. Given that our proposals are echoed by the Commission, of course we support the proposed new measures. The Commission will introduce at European level the measures we sought domestically.

In all the years I have been in this House, I have never seen a proper debate on budget measures because of the restrictions imposed by one day debates and midnight votes. We never have an opportunity to debate the underlying state of our public finances or the question of proper borrowing and saving targets.

It is clear there was no regulation of any consequence in Ireland and the European regulations did not work. It may be in our interest to seek even stronger regulations than those being proposed by the Commission simply because of the systemic importance of our banks. I am wholly in favour of stability and the measures required to achieve it.

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