Frank Fahey (Galway West, Fianna Fail)

I welcome the opportunity to participate in the debate and welcome the report from Mr. Regling and Mr. Watson, as well as the report from the Governor of the Central Bank. They are excellent reports and great lessons can be learned by everybody involved from them. The Government can learn lessons about macroeconomic and fiscal policy and parties on all sides of the House can benefit. The reality is that mistakes were made and I acknowledge that my party in Government made mistakes in the period between 2002 and 2007.

The greatest mistake was not to put in place the counter-cyclical policies necessary to deal with the stimulus created when we became members of the European Monetary Union and benefited from much lower interest rates - down to 3% from 6% - and the ability of banks to borrow from a large pot of euro currency having only been able to borrow in Irish punts before that. We had no borders, as has been well explained to us in the finance committee, and international borrowing became easy for Irish banks at much lower interest rates. There was no counter-cyclical policy put in place and that was the big mistake made from a macroeconomic perspective.

As the reports indicated, many mistakes were made. The key issue now is for all of us to learn the lessons. There must be a new approach to policy initiation and implementation from all parties in the Oireachtas and the Government of the day. This Government, and the Taoiseach in particular, has put up its hands and accepted some of the mistakes made on this side of the House and it is only right for the Opposition to acknowledge a number of fundamental mistakes made in their policies as initiated since the onset of the crisis.

We heard from the Governor of the Central Bank yesterday and the new chairman and managing director of Anglo Irish Bank today, who stated that to liquidate or run down Anglo Irish Bank would have been a clear and very significant mistake. They also indicated that this would have led to an additional cost of €20 billion on top of the €22 billion that has already been paid out.

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