Enda Kenny (Mayo, Fine Gael)

The Taoiseach's first mistake was to believe his own party's propaganda and to believe that investors would reward Ireland if the Government, as he once said, just wrote whatever cheques were necessary for the banks. As Fine Gael predicted on more than one occasion, this blank cheque policy has failed completely. A few months back, in an article in The New York Times, a reporter asked whether one bank could bring down a country. Unfortunately, we now know the answer. By pouring so much money into Anglo Irish Bank and by failing to insist that bondholders should share in the pain of rescuing the banks, the Taoiseach turned a banking crisis into a national crisis and every person in the next generation will have this responsibility on their shoulders. If it were not for the Government's failed banking policy, it is highly probable that Ireland would not have needed the IMF bailout.

The Taoiseach asked me how this party would have handled it. It would have been handled very differently. We would have used the period of stability provided by the bank guarantee to restructure the banks and impose losses on banks' investors. From the start we were the first party to recognise that Anglo Irish Bank could never survive as a commercial entity and needed to be wound down. The Taoiseach scoffed at that. We were also the first party to argue that it was completely unfair for the Irish people to shoulder all of the losses for our banks, and that it was only fair that the people who had lent recklessly to the banks should share in that pain. As the Taoiseach knows, it is a basic rule of capitalism that if one lends recklessly to failed institutions, one must take the consequences - a basic rule that he deliberately decided to ignore. Two half years on, we still have not been able to break into the encrypted files in Anglo Irish Bank. Nobody has been sent to jail, nobody has been prosecuted and nobody has been brought before the courts where the law of the land should apply.

The Taoiseach's second mistake was to believe that spending cuts and tax increases could by themselves fix the deficit. However, as Deputy Michael Noonan pointed out yesterday, no country has ever taxed its way out of recession. Nations have only ever grown their way out of recession. This is why Fine Gael developed its NewERA stimulus plan, which the Minister for Finance originally welcomed and then rejected. The results have been all too predictable, miserable economic growth necessitating even more spending cuts and tax increases. The recent decision by the European Commission to revise down its growth projection for Ireland in 2011 confirms that it too lacks any sense of confidence in the Government's growth policies.

These mistakes can be laid directly at the Taoiseach's door and the door of the Minister for Finance. They have destroyed our economy and the morale and confidence of the Irish people. There is nothing in the budget speech or in the Taoiseach's contribution today that reaches out to those young people pondering their future and wondering what subjects they should take to leaving certificate so that they might have a job in 2018. Those now being forced to leave again are getting no response from the Government about a future of any confidence for them and neither are those young people in limbo with regard to the right to finish their apprenticeships clearly and confidently so that they have a certificate that stands up all over the world if they want to go. The Taoiseach has not done anything in respect of the 60,000 undocumented in the United States. He speaks a lot about them but not much is happening. The Irish people are angry and very afraid. They are afraid for their future because the Government offers no hope, confidence or vision. What was done in yesterday's budget was to consign thousands of middle and lower income families to further penury, pressure and stress.

Our economic sovereignty has been seriously eroded. It is humiliating for a proud country like this to be placed in this position by an incompetent Government and reckless activities. However, now is not the time for despair nor the time to sink beneath waves of disillusionment and despondency. This is a time for a change of emphasis, direction and motivation to galvanise our people, as they have often done in previous times of adversity, to rise to meet this challenge, as we can.

I have defended the Taoiseach and his Government and our foreign direct investment programme in the United States and in Brussels on more than one occasion. We support very strongly the 12.5% corporation tax rate. I have made this point in Brussels and I will do so again. The Irish people signed it into the Lisbon treaty; it is a cornerstone of our investment programme. We all know the projections for many multinationals are very strong for the future and we must support this. However, the loss of competitiveness in our indigenous manufacturing sector and the lack of confidence that the Government has engendered in the spirit of our people are doing down our country and the Government will never recover or be able to recapture that type of enlightened attitude from our people because it has let them down and hurt them in their pockets and hurt their spirit. It has failed in its duty in this regard.

The only response of the Minister for Education and Skills to the international education assessment published recently which showed Ireland slipped to 15th or 17th place in the European league was to state we must do more to improve literacy and numeracy.

See this speech in context