John Gerard Hanafin (Fianna Fail)

When positive proposals are put forward, they should be welcomed. However, it is difficult to expect that they would be taken on board in full when many aspects are already being implemented. I am very conscious of the fact that part of the proposal is probably unacceptable in light of what my colleague said in connection with off balance sheet lending. Off balance sheet lending has been responsible for a major part of the Irish banking crisis. Perhaps it would be timely if a proposal came forward to ensure that in future banks could only lend a certain percentage linked to their actual reserves in mortgages and commercial loans.

I am also conscious of the fact that there are very positive proposals to go before the Government. It is not as if we have not been here before. We have already been around the houses in the 1980s and we came up with very positive ways of creating employment. Taxes will be increased, property based incentives will be reduced — they will certainly over time pass their sell-by date — and more incentives will be introduced in terms of ensuring employment. When one listens to positive contributions it is then difficult to listen to illogical contributions and to hear at Ard Fheiseanna and in this House people suggest that fixed rate mortgages can be broken as easily as a ministerial diktat.

If a financial institution offers a fixed rate mortgage at a rate of 4% or 5%, it must have, correspondingly, a guaranteed income stream of between 6% and 6.5%. Otherwise, when the European Central Bank, ECB, reduces rates to 1.5% the banks which issued loans at the rate of 5% will not be able to fund them. This process is funded by mechanisms that include fixed rate mortgages. Rather than assisting the banks in the current situation, we would be ascribing a non-financially viable situation to them. It is surprising to hear the Labour Party continue to make impossible suggestions that fixed rate mortgages of 5% be reduced to 3%, and the bank could make up the difference. That is not feasible.

Wind energy provides a wonderful opportunity for Ireland. Having seen the Arklow bank wind park and the turbines in the sea, the potential for wind energy in this country is evident. Ireland and north UK are best placed to ensure we obtain wind energy. I suggest that because Europe now claims a competence in the area of energy, in the same way as it claims competence in the area of agriculture — in other words, subsidiarity at European level is reflected at national level — we would now see a major input from Europe in terms of substantial funding to ensure a back-up supply to Europe in its energy needs. We have seen twice in the past year the Ukraine cut off the gas supply into Europe from Russia. Whereas Russia may be a reliable supplier, its transit network is not reliable. Up to 10% of Europe's energy requirements could be supplied from Ireland and paid for by the EU. I would like to see that happen.

The ESB will in the next couple of years invest up to €22 billion in projects, half of which will be in the area of renewable energy. While this is positive news, there is no doubt but that we have paid significantly for our energy costs and that this in turn has impinged on our competitiveness. However, the good news is that there will be a 10% reduction in electricity prices for all customers in April and May. Gas prices for domestic and small and medium enterprises will be reduced by an average of 12% in April. The €100 million national insulation scheme will unlock great potential for energy efficiency and employment for those employed in the construction industry moving away from the construction of houses. Households can expect to halve their heating bills, with reductions of €700 per annum. The total number of jobs created from this initiative will be 7,000. The proposal regarding on-site generation of electricity in homes and farms across Ireland is to be welcomed. There is no doubt but that the Government has good green credentials. Since 2000, the Government has invested €1.6 billion in water schemes alone.

As regards broadband, Ireland will have 100% coverage by September 2010. Half of the area involved in the scheme will receive coverage by the end of this year. Positive initiatives are being undertaken by Government in a wide number of areas. The price of oil today was $49 a barrel. Interest rates are currently 1.5% and are expected to fall to 1%. It is disquieting to hear Standard & Poor's has reduced Ireland's AAA credit rating. In the 1980s when we had a 130% debt to GDP, only half the current number of people at work and sky high interest rates of 18%, we managed to pay everybody in full and on time. The same Standard & Poor's gave a AAA rating to the sub-prime lenders that almost brought down the world's financial systems. It is also disquieting to hear the comments of some UK commentators in regard to the euro. For some reason, they downplay the euro and Ireland's role as much as possible.

I have no doubt we will come through this crisis and that the same elements that made us stronger in the past remain in place to enable us catch the upswing in the world economy whenever it comes.