Martin Mansergh (Tipperary South, Fianna Fail)

I watched on the monitor some of the hearings over recent weeks and followed them in the newspapers. He was a good Chairman of the all-party sub-committee. I agree with his point that the question of the Lisbon treaty needs to be integrated into most of our debates. It is the case that if we do not resolve the matter satisfactorily, it will make our economic and financial problems a great deal worse.

The capitalisation of banks was raised and various views were expressed. When I came into the House, I heard Senator O'Toole congratulating the Minister for not having done anything much on this subject. Others urged that it should have been done before now. One can see from observing what other countries have been doing that it is important, if and when the Government takes action on this front, that it does it right and with proper effect.

A couple of days ago the Minister asked the banks to put forward a plan within ten days as to how, if action were taken, it would flow to the needs in particular of the small enterprises which are the lifeblood of the economy and to which the Leader of the House and others referred in their contributions. The Minister indicated that in some circumstances it would be appropriate for the State, whether through the National Pensions Reserve Fund or otherwise, to consider supplementing private investment with State participation.

I want to return to the matter of stimulus because I want to respond more to Senator White. The Labour Party suggested that the Government should be deliberately borrowing more to provide stimulus along the lines that the Government of Gordon Brown is doing across the water, aiming at a borrowing requirement of approximately 8% of gross national product. Equally, other governments in Europe with substantial socialist or social democratic participation are not willing to go down this route, and I am thinking in particular of the German Government where the finance Minister, Peer Steinbrück, is from the SPD.

As the Minister expressed in his opening statement and as I have explained, we are providing a stimulus to the economy. However, it would be dangerous for us to start going down the same route we first took in the mid-1970s and again in the early 1980s. Of course, with greatly increased borrowing one can provide a short-term stimulus to the economy. However, one is then left with the headache of closing a gap that has widened even further. That type of approach was largely responsible for the depression of the mid-1980s.