Richard Bruton (Dublin North Central, Fine Gael)

The House needs to acknowledge that catastrophic policy mistakes have brought us to this sorry pass, not only the mistakes made by the Government in the lead-up to the crisis in 2008, but the catastrophic mistakes taken in respect of its banking strategy. With every day that passes, the more the public and objective commentators are made aware of that sad crisis that has come upon us.

The level of despondency is such that many breathed a sigh of relief when told the IMF was coming in, believing it would at last rescue them from a Government that was responding in an ad hoc manner, without any coherence as it went along. Others are beside themselves with anger because they see this as a denial of everything we fought to create in terms of the Republic that is ours. The truth is that being in the hands of one's creditors is not a happy position to be in. The situation has been brought about through profound failure of the political culture that has been afoot in Ireland, particularly over the last decade. It has not served the interests of the general citizen but rather those of too small a group, devoid of a proper respect for citizens' rights.

There are those who would look on this crisis as an opportunity to peddle failed philosophies. There are those who are advocating that we take a crude anti-European road, which would be a dreadful cul-de-sac for us in terms of recoiling back into an "ourselves alone" philosophy, that simply would fail in this country. Others see this as an opportunity to create deep division and pit the public sector against the private, the employer against the worker and create division within our communities. That again is a blind alley we must avoid.

The Government is right when it says its policies have led us to a point where no one will lend to us apart from the IMF. That is the sad truth, and in that it is right - this is the only option, and there is no other. Some of the conditions being imposed by the IMF and the EU are amply justified. They simply reflect inaction and an unwillingness to reform, over a long period. Let us be honest about this package and approach, however. In my view, it is founded on a narrow orthodoxy prevalent in Europe at the moment, that is underpinned by major weaknesses. It is based on a belief that rescue packages should contain a penal element within them, and bank resolution should not involve sharing the burden among those who invested in the banks. It is built on the belief that there should not be a growth strategy across Europe. Instead it should be all about export growth by the peripheral countries, so that they may work their way out of their problems, against a background of low inflation and a strong euro.

It is also based on a belief that the ECB must rapidly remove its concessionary liquidity at 1%, which in the Irish case is supporting €160 billion - every 1% increase in that would be the equivalent of €1.5 billion extra our community would have to pay for the lending that is outstanding. It is based also on a belief that countries trying to get back into the borrowing markets after 2013 should have a very strong health warning imposed upon their bond issues. We must question the thinking that underpins this strategy. Will it work, particularly when it is being compounded here in Ireland by an Administration in its death throes, which has little ambition about the scope of reinventing Government or about a genuine jobs strategy that could transform the country? Its Members are marking time until they pass on to other work.

We need to create space to ensure this works. We are committed, as anyone entering Government should be, to honour the changes that need to be made to make our country succeed, but it must be on a much more ambitious basis than is being offered by this Government. That is what makes this agreement deeply flawed. It is not based on anything like sufficient ambition in relation to our problems.

There are those who would suggest we do not need to cut our deficit so severely, but I do not accept that. There are those who say we need to increase taxes more rapidly at this time, but all the evidence shows this does not help a country to recover from a deep crisis such as ours. I shall conclude by saying there will be a revisiting of this strategy over time. There has to be, because not only does Ireland have to honour its side of the deal, but there has to be a deal that works. It is in the interests of every European country that Ireland manages its affairs successfully under this agreement and that we are not imposed with a narrow orthodoxy which inhibits our chance to recover.

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