Ivor Callely (Fianna Fail)

-----we should make progress on issues on which we agree. I am pleased to note the Opposition recognises the need to correct the public finances, stabilise the banking system - albeit its view is different from that of the Government - and restore our competitiveness.

The current crisis is obvious and is being given the high priority required. The crisis is a serious challenge facing not just Ireland alone, but countries across the globe. I believe the world financial crisis was caused by overstretching financial liberalisation, lack of appropriate regulation and lack of oversight of financial markets. The world economy is in severe recession which has serious political and social consequences. Given the global nature of the crisis, I believe an international co-ordinated response is essential in order to alleviate the strains on societies and to prevent similar crises. The financial crisis is a security concern that can lead to widespread insecurity. A sense of urgency in national governments in implementing an effective and co-ordinated approach to recovery is urgently warranted. Governments face insecure populations as unemployment increases and standards of living decrease leaving the position ripe for rising crime, labour strikes, protectionism and revolutionary ideas to be sown. Political and economic nationalism are also likely. The financial and economic crisis may also have a gender specific impact, particularly on women as they are often first to be laid off. National governments already implementing various measures to reverse the financial and economic downturn lack a common response. That is particularly noticeable in the transatlantic response.

The co-ordination of financial and economic policy is implemented on an ad hoc basis and often in the narrow interest of individual states. The origin of this crisis is seen as regulation failure. Greater supervision of financial institutions is the answer. The crisis has its roots in misguided deregulation policies in the United States. I do not mind the Opposition spouting on about different governments in the 20th century. The reality is that the current crisis is global and has its roots in the United States. The US authorities have recognised their failure in certain financial regulation policies and have pledged to correct them. Europe has acknowledged the need for increased financial regulation and I identify a lack of co-ordinated European fiscal decisions.

While the United States and United Kingdom spending plans are likely to create debt and currency problems in the future, many are praising them as the necessary first steps. I recognise that the G20 conclusion took positive steps to alleviate the effects of the financial crisis, particularly in establishing the financial stability forum to co-ordinate regulation globally and to give a stronger role to the IMF in lending to distressed countries. The G20 also reached agreement on making additional moneys available in trade credit to importers and exporters. Another proposal was the Stiglitz initiative creating a new global economic council to set the agenda for global financial and economic policy. It also proposed a new global reserve system to regulate-----