John Paul Phelan (Carlow-Kilkenny, Fine Gael) | Oireachtas source

I will take up where Deputy Dara Murphy finished. I was shocked at some of the media commentary over the past 24 hours, particularly that concerning the finance spokesperson of the main Opposition party. He tried to cast all sorts of doubt on the negotiated agreement of Deputy Noonan, which saw the end of the promissory note. This was a positive step for the country financially. Last year, we ensured that we would not pay in excess of €3 billion at the end of March every year for the coming ten years. That arrangement had been negotiated by the previous Government, in which that finance spokesman was a Deputy. He was in this House, on the Government benches but he now tries to cast aspersions on the validity of the agreement, which has lifted a huge weight off the shoulders of the Irish taxpayer. People have short memories but they need to be reminded of what they landed the country in a couple of years ago.

I have no difficulty in supporting the legislation. I should hold my hands up and say that I have €300 in an ICS Building Society account. It will not be affected in any way by the legislation. I used it as a savings account to gather funds to make a downpayment when I bought my house. When I was in secondary school, which is not all that long ago, there were several building societies operating in the Irish financial sector. Now, we are down to one building society, which is a subsidiary or an arm of one of the pillar banks. The legislation seeks to allow an agreement between that pillar bank and the European Commission, which was made in the middle of last year, to come into practice.

The second aspect of the Bill concerns the establishment of a transfer facility with the ESM to deal with the difficulties in Greece. I agree with some of the points made by Deputy Joe Higgins to the effect that Greece is in a very difficult position. Legislation that allows for its difficulties to be eased somewhat should be welcomed.

I must get across the importance, for the future of the country, of avoiding what we witnessed in the five or six years before the economic crash. In essence, this involves avoiding another property bubble. In certain parts of this city and in isolated other parts of the country and particular segments of the market, we can see significant shortages and dramatically rising property prices. Economically and politically, I can see the benefits and the necessity for property prices to increase somewhat to help people in significant negative equity.

The overriding responsibility of the Oireachtas must be to ensure that we never again experience a property bubble such as we had prior to the economic collapse a few years ago. We should look around at different parts of Europe. Germany, in particular, is an obvious example of a country that has studiously avoided boom and bust cycles in the property market over the course of its economic history since the Second World War. Germany has achieved that by means of a number of measures. The previous speaker, Deputy Dara Murphy, correctly hinted at the reluctance of the European Central Bank to get involved in quantitative easing and the dangers associated with it from an historical perspective in Europe such as inflation and hyper-inflation, in particular from a German point of view, as it led to a political situation in that country that had serious and devastating repercussions across the Continent and further afield. At this juncture perhaps the European Central Bank might look at the way the Federal Reserve in the United States operates in order that some of the best parts of its approach could be introduced into the operations of the European Central Bank. There is more than just Germany in the eurozone but that point does not often come across as well as it should.

In certain parts of this city there is a shortage of larger homes and apartments which is leading to an increase in prices. We only have to look at the property supplements of newspapers. For some years such supplements virtually disappeared or were only printed every now and again but they are now back and are nearly as big as they ever were. The latest research shows that property prices, in particular for larger homes in the south Dublin area, are starting to increase significantly. There is a need for stimulating activity in the construction sector in that segment of the market and in the apartment rental sector. I could bring Members to a few apartment complexes in Carlow and Kilkenny in my constituency where nobody would ever live in an apartment but we do not have apartments in places where we need them. For those reasons there is a strong argument to be made for stimulating the property sector to ensure a supply of apartments in parts of Dublin city in particular.

Economic activity in Dublin has increased at a pace which is far quicker than most of the rest of the country in recent years. I do not wish to cause difficulty by making that point. Everybody outside of Dublin is pleased that certain parts of Dublin are improving but people would like to see more improvement in their own part of the world. The Minister of State, Deputy Jan O’Sullivan, who has responsibility for social housing is more familiar than I am with the significant shortages in the supply of social housing in Dublin but also right across the country, including in my area.

We should never lose sight of the fact that a political decision was made in the early part of the millennium to remove the regulatory role of the Central Bank for financial institutions and to establish the Financial Regulator. It is an understatement to say that did not work. I was not a Member at the time but the committee responsible was chaired by the former Minister for Justice, Equality and Law Reform, Mr. McDowell, which came up initially with the homework for the legislation which resulted in the establishment of the Financial Regulator and the removal of the function from the Central Bank. In future, we must be cognisant in all of our utterances, actions and legislation so as to ensure the property bubble which has crippled so many people in this country and that will leave a lasting legacy for individuals, families and the State cannot be repeated. I am not convinced enough is being done to avoid the emergence of a property bubble again. In certain parts of the city in particular we are already seeing surging prices which are not a positive indicator in terms of avoiding that horrific scenario in future.

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