Michael Noonan (Limerick City, Fine Gael)

Everyone is conscious of the situation and it is my view these things will not be allowed to happen. The Greek situation will get sorted. The next step after that must be changes in governance. Deputy Clare Daly referred to the debate in the European Parliament. The debate on the six pack regulations went on for some years, with the French Government holding matters up. Finally a compromise was negotiated by the Polish Presidency and this went through the Parliament. The Deputy will be able to have his say in the House. These are proposed legislative changes and we will be obliged to deal with them in the Chamber. In that context, there will be a full debate on the matter in due course.

The issue of governance must be addressed. It is vitally important that if this crisis is finally resolved, matters cannot be allowed to slip because we would be faced with another drama in two years time. If it is going to be fixed, it had better be fixed properly. The governance arrangements must be put in place. As I stated in the House on previous occasions, the key problem is that the euro - which was a great idea - was put in place 12 years ago, but the policy instruments to protect it in times of adversity were never introduced. These instruments are now being retrofitted. This process has been taking place for the past year or so, but there is more to be done. Part of the process to which I refer relates to the new governance system for the eurozone and the wider group of 27 member states. That is the fourth step in what needs to be done. There must then be a policy to grow the European economies.

In the 12 years since the euro was founded the level of trade in Europe has grown by 50%. During that period inflation has remained below 2%. The currency was established at a rate of €1 to $1.17. Up to two weeks ago it was trading at $1.43 or $1.44 and in recent days it has been trading in the $1.20 to $1.30 range. However, it is still above the value it held at its point of establishment. It is obviously responding to the stress being felt. This is the basis of the agenda I am pushing in Europe.

I wish to revert to the point made to the effect that we got lucky on the interest rate. If Deputies wish to see my position on the interest rate, it was published in the Financial Times in January this year, well before the general election. At that point I stated our policy was to move the interest rate down to that which applied to the balance of payments fund in Europe, of which Romania and some other countries outside the eurozone are beneficiaries. The latter fund has no margin attaching to it and when I checked the position on the most recent disbursement at the time, I discovered that money had been given at a rate of 3.3%. The position I have outlined is one I have consistently maintained. When I became Minister in March, I argued in Europe that there should be no margin in respect of the money being made available to us and that it was counterproductive to be charging us margins because we could not be rescued if the interest rate applying was 6%. It does not make economic sense to charge 6% on money, unless the growth rate is going to be 6.5% or 7%. Even then, it would only be possible to break even. There is a relationship between what a country can pay on its interest rate and its actual rate of growth.

We have dealt with this matter and I am pushing the agenda to which I referred on the basis that Ireland is one of 27 member states. There are many whose thinking on this matter is similar to mine. Matters are rapidly coming to a head and a solution will emerge in the next three weeks or so. I am not trying to talk down the crisis. There is a serious crisis in the eurozone. To centre that crisis on Greece is merely to focus it on one country which has paid a very heavy price. The crisis is within the eurozone. This can be seen from the way pressure has moved from Greece to Italy to Spain to the French banking system and so on. The crisis must be dealt with quickly and the Deputy is correct to state time is running out.

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