Bernard Durkan (Kildare North, Fine Gael)

I have no intention of doing so. I recall standing on the opposite side of the Chamber on one occasion during that period and speaking about what was likely to happen. On the following day, there was a full page article in one of the newspapers in which I was accused of trying to scare people. A handful of other individuals also spoke out and asked that action be taken. However, we were informed that nothing could be done because the European Central Bank controls interest rates. That is rubbish.

Interest rates are not the only means one can use to control inflation. That is a fact which is now known by everyone in this country, the UK, France and Germany. There are simple credit mechanisms which are used to control inflation, on a selective basis, in many countries throughout the world. Such mechanisms have been used in the past on several occasions. There are those who say - I refer here to the eurosceptics, who have also played in a role in what has occurred - that our future is not in the eurozone. These people also state that if we had not been in the eurozone, then we would not occupy the position in which we currently find ourselves. That is also rubbish. If we had not been able to borrow money from the ECB, from where would we be borrowing it at present? Would we be borrowing on the markets and repaying our debts at a rate of 8%, 9% or perhaps more? Would we be able to survive in such circumstances? The simple answer is "No".

An Opposition Member referred to low interest rates. There is no question that such interest rates provide a great boost in the context of job creation. In an ideal world, it is great to have low interest rates. At present, however, people are continually talking up interest rates and referring to the dangers of these rates increasing. We know what will happen if interest rates rise. We cannot afford an increase in interest rates either now or in the foreseeable future. Low interest rates provide cheap money to those involved in job creation and in the area of investment. There must, however, be controls in place which are designed to ensure that this money is not spent for frivolous purposes as was the case during the past 12 years. I will not discuss the matter further at this point. Suffice it to say that mistakes were made. Any attempt to control either the rate of inflation or a country's economy by using interest rates on their own will not work. This has been tried in the past and has not been successful.

Several Members referred to the need for a solution. Everyone is aware that such a solution will not be arrived at overnight. We all know that we are going to be obliged to work hard to achieve a solution and that in all likelihood we will still be here in five years time working towards it. If we put our shoulders to the wheel, what we are attempting will work. I refer here to everyone in the country - regardless of whatever level of society he or she occupies or whatever job he or she holds - playing his or her part. We will be obliged to work harder, for longer and for less money.

Some of the newer Members do not realise that Deputies have already taken fairly substantial wage cuts and that there are more to come. I do not have a difficulty with that. However, wage cuts must be imposed across the board. Once one begins taking from one sector and not taking from another, further imbalances are created. The Government is doing everything that can be done. It is attempting to retain front line services while taking the necessary steps to ensure that our long-term economic and political sovereignty will be secured. That is a tall order.

I have often compared what is occurring in Ireland now to what happened in the United States in the 1920s and 1930s. During the period in question, there was no overnight recovery for the US economy. There were no simple answers. Numerous attempts were made to put matters right before that economy was restored to its former position. There are those who suggest that the Second World War came to the rescue in this regard. Perhaps some individuals are stupid enough to believe that. It was not the advent of war which saved the United States; it was, rather, leadership, inspiration and dedication. The then President of that country succeeded in convincing his people that they had more to gain by following the gospel he was preaching as opposed to following those being preached in Europe at that time. There is a dramatic contrast between the consequences this had for the US and Europe.

We cannot afford to turn upon each other. Society must remain constant, supportive, cohesive and united. If society turns upon itself, then we will not move forward. If we each target that sector which we dislike most, we will end up with a divided society. With division comes defeat and this will lead to our going nowhere. As low as it is now, our stock will be even lower if that comes to pass.

The recent stress tests carried out by the Central Bank and others on the instruction of the Government will serve a good purpose provided this is the last occasion on which they are used. There are those on the opposite side of the House who state that we do not know if there will be a need for further stress tests. Of course we do not know whether such a need will arise, particularly on the basis of the performance of the previous Administration. Real stress tests were not carried out in the past. We did not get to the bottom of the hole in our banking system and were not, therefore, in a position to know where we were going.

Let us suppose a decision was taken to stop providing support to the banking system. What would be the position if those in government had stated that the banks had been provided with €30 billion or so and that was enough? We would have been obliged to return to the relevant lenders on a monthly basis in search of more money. In doing so, however, we would have informed them that we would not be repaying the loans we had already received but that we wanted more money in any event. I do not know what the new Members of the House think about that strange scenario. I have never known such a strategy - I call it the "cop-out strategy" - to work. In the real world, we must be serious when it comes to our responsibilities.

The Government could have decided to wait for a further three or four years until the economy and our financial system imploded in the hope that someone would come along and save us. It will not happen that way. We must dig our way out of the morass in which we find ourselves. We must pull ourselves up by our bootstraps and march on. We must do it ourselves because assistance will not be forthcoming from elsewhere.

Reference was made to Professor Honohan's report. I accept that in his report the current Governor of the Central Bank stated that the banking system had to be provided with support in 2008. However, he also stated that there were a number of alternatives. Following the putting in place of the bank guarantee on 29 September 2008, I recall not being able to understand why a furore had not arisen with regard to the actions of the then Governor of the Central Bank, the then Secretary General of the Department of Finance and the Financial Regulator. I am not an economist, and neither am I a soothsayer or a fortune teller. However, from the practical knowledge I have gained as a result of being a Member of the House, it was obvious to me that such a furore should have arisen. Lo and behold, last night's television programme has proven me to be right. There is no doubt that the then Government should have sought the information which should, as a matter of course, have been made available to it at the time. The previous Administration should have asked whether we could afford what was happening and whether the boom would last. It should also have sought information regarding why the boom might continue or why it might cease.

Many people have stated that the private banks should have been allowed to fail. If this had been done, there would have been major repercussions. First, the level of job losses would have been massive. There are those who will say that such job losses have already occurred. That is true but there would have been even more and they would have occurred overnight. This would have given rise to a major financial collapse. The then Government found itself between a rock and a hard place. We know that it did not face a simple choice. However, an in-depth assessment should have been carried out long before the extension of the bank guarantee in order to discover what could have been done to avert what has happened.

I hope we will never again find ourselves in a position such as that which we currently occupy. It should never again be the case that a particular development in society be allowed to proceed unchecked just because people are of the view that they are having a great time and that it will never end. We hope that will never happen again. If it does, we will be finished and it will take all the resources of the entire population and every positive thinking Member of this House to recover our composure, dignity, standing in the international arena and economic sovereignty. If we do not put the wagons in a circle and fight our way out in a cohesive way there will be much more serious consequences. I do not wish to apportion blame to the previous Government. It is long past the time for that. The decisions should have been taken in 2002 and 2003. Because the decisions were not taken in time the medicine is much more severe.

What will happen to mortgage holders who are in arrears? It is three years since I first raised this matter in the House. At that time it was alleged that only approximately 25 people in the country were in that situation. The Government said not to worry about that kind of thing. I cannot understand how we were told that. I took it upon myself to go to the Commercial Court to find out what was going on. It was clear that arrears were accumulating at an appalling rate and that there was no hope of the poor unfortunate people recovering. In many households there were two earners, both of whom had been forced to go out to work to pay for the mortgage. What often happened was this. When they both lost their jobs the bank called them in and offered to help. If they were in negative equity the bank cosied along with them until they were deep in debt to the bank for the rest of their lives. I watched a television programme about this last night. A person from the corporate sector was interviewed and described such situations. If debtors had fallen into difficulty and there was very little loss to the lending institution, the lending institution would repossess the house and sell it, because it was covered in any event. This is crazy stuff.

Was nothing done to reassure the banking system and explain to banks that we would help them out, and even bail them out, but that they would also have to help the country out of its difficulty? Unfortunately, no condition was put on the original guarantee of 29 September 2008. Some such indication should have been given to banks at that time. However, we can do nothing about that now. We have spent the good money. The commitment has been made. When I speak of "we" I mean those acting on behalf of the people at the time.

As we move on from here, we can take inspiration from those who have gone before us and survived. This is the biggest difficulty we have ever had, but we will deal with it together and with the support of our European colleagues. If we do not have the support of our European colleagues, if we poke our fingers in each other's eyes and if our European colleagues fail to recognise that we have a serious problem but that we are capable of solving it ourselves they will be poking a finger in their own eyes. There is no advantage to be gained by destroying the cohesion of the European community or by exploiting the destruction of that cohesion.

From here on, we must concentrate on the economy. I recall President Bill Clinton's slogan, "It's the economy, stupid". I hope we will do that.

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