Jim Daly (Cork South West, Fine Gael)

It was great to witness Deputy Dooley's road to Damascus moment, when he accused the Minister for Finance of saying one thing when playing to the home audience and speaking another language when in Europe. Deputy Dooley has a very short memory if he has forgotten the arrival of the IMF last October and names like Dermot Ahern and Noel Dempsey.

Notwithstanding that, I share the aspiration of everyone in the country to see the IMF and the ECB leave the country and to see us regain our sovereignty. This is a battle we fought and won before and it is one we will fight again. We all look forward to that day.

Deputy Dooley also referred to the image of Ireland abroad. It is important to correct the record in this regard. Deputy Dooley seems to suggest that we are inclined to get ahead of ourselves, to look beyond our own weaknesses and to see too much that is not there. I refer Deputy Dooley, and anyone else who is wondering about our image, to a German Parliament budget committee hearing of this week. Klaus Regling, who is head of the European Financial Stability Facility, EFSF, addressed the committee. These are, in effect, our paymasters so what they say about us is worthy of note. Klaus Regling said:

The international rescue programme for Ireland, with support from the EFSF, is showing very positive results. Ireland generated a current account surplus through increased exports and recovery in her competitive position. The State's deficit is sinking faster than originally planned for. Also, the Government's restructuring of the banking sector is faster than originally required. The markets have recognised and honoured these steps with a reduction in interest rates for Ireland from 14% to 8.5% in the last two months.

We cannot underestimate how far we have come, notwithstanding the challenge that lies ahead for us.

Deputy Wallace argued for an end to austerity. That is something we would all love to see, in an ideal world. If we were not living in the real world we would support him wholeheartedly. Unfortunately, we must exist in the real world.

On Monday of this week, the Handelsblatt, which is the German equivalent of the Financial Times, reported that the Institut für Wirtschaftsforschung, Ifo, which is the German equivalent of the Economic and Social Research Institute, ESRI, had warned about excessive lending by Germany and the continued fear of the markets as to where Germany's generosity will bottom out. The Ifo suggested that Greece will probably have to leave the eurozone and that there is too much uncertainty with regard to Portugal. Speaking about Ireland the report said:

Ireland has, however, shown that through a realistic and strong programme of reforms it is possible to eliminate a current account deficit. The other countries should learn from Ireland. After a period of loose budgeting guidelines in the eurozone only through a programme of hard reforms can a realistic programme of devaluation be pushed through.

The Ifo held up the measures Ireland is taking as an example of the right steps. It is important to recognise the opinions of others, especially our paymasters.

The argument for default, which has frequently been made recently, is tied in with the move to the European Stability Mechanism, ESM. Sinn Féin and others speak about burning bondholders. Default as an aspiration is ridiculous. We cannot begin from a point where we wish to default and set out to do so. A philosopher examining any system, finance or otherwise, has to begin from a beginning. The beginning principle of our finance system is that pay what we owe. This must be set in stone. Only from here can we continue to work on and be part of a community based finance system.

The ESM is an exceptional model for Ireland and suits the current Irish situation. The challenge is that while the reduced interest rates are favourable an individual country has the ability to derail the interest rates by defaulting and causing the cost of borrowing to go up. That challenge lies ahead of us. However, I welcome this development and support the legislation.

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