Mary White (Fianna Fail)

I welcome the Minister of State to the House and thank him for his excellent speech. Much attention has been paid to the economic crisis in Greece. This is understandable, for Greece has broken important promises and, apparently, committed fraud towards other eurozone members. The exact extent of fraud committed by Greece to appear euro-ready is still uncertain as new details are still emerging, the latest detail being complicity by the controversial US investment bank Goldman Sachs. The EUobserver reported:

Investment firms, including Goldman Sachs, arranged currency swaps for Greece over the last decade that allowed Athens to raise funds to reduce its budget deficit while pushing payments well into the future. Those transactions were not classified as loans, reports The New York Times, and not made known to Brussels officials.

Greece is fighting a battle to restore its international credibility as well as its economy. Arriving in Brussels yesterday, the Greek Minister for Finance admitted his country is in a terrible mess.

However, the narrow focus on Greece clouds what really matters. This is no mere Greek crisis. It is a crisis for the euro. In his speech, the Minister of State said the EU summit last week agreed to bail out Greece, if needed, but demanded tougher government reforms in Athens to restore economic stability and calm world markets anticipating a single currency collapse. At their meeting yesterday, the ECOFIN ministers expressed confidence in the plans of the Greek authorities. Today, they adopted a comprehensive and ambitious package of recommendations for Greece, covering fiscal and structural policies, based on proposals from the European Commission and following discussion with all member states. These recommendations require that the Greek authorities take steps to reduce the deficit on the public finances below 3% of GDP by 2012, in line with their obligations under the Stability and Growth Pact. The authorities are also requested to implement specific economic reforms considered consistent with the smooth functioning of the euro area. The Minister of State also said that, as envisaged by the European Council, the European Commission will closely monitor implementation of the recommendation, in liaison with the ECB, and would propose necessary additional measures, drawing on the expertise of the IMF, and that a first assessment would be done in March.

Many international analysts remain sceptical as to whether Greece's current plans will go far enough, especially since figures released last week show the economy contracted by 2% in 2009 as against a projected contraction of 1.2%. In yesterday's Financial Times, a senior Athens banker is reported as saying it was difficult to see how Greece could avoid a further tightening of fiscal policy. French and German officials have said they are willing to wait until March for further assessment. The ECB is anxious to safeguard the eurozone's "no bailout" clause, but last week Mr. Trichet backed a eurozone leaders' pledge to take determined and co-ordinated action if needed to safeguard financial stability in the euro area.

When wrapping up his speech, the Minister of State said it was widely recognised the Government had taken difficult but necessary budgetary action to restore stability to the public finances. There is no doubt the Minister for Finance has restored credibility to the Irish financial situation through his international meetings and as a result of his grasping the crisis from the beginning. We are also making progress in the area of competitiveness, with necessary price and wage adjustments under way and as a result of the resolution of problems in the banking system. However, the Government has not spelled out sufficiently what it intends to do to create employment. People say governments do not create employment, but they do. The actions they take help create jobs. What is our Government's strategic plan for jobs? We now have 12.7% unemployment. I believe unemployment is a scourge.

As I mentioned last week, Dr. Craig Barrett has said there are many inherent inadequacies in our competitiveness, but the Minister of State has said we are making improvements and wages have reduced. Dr. Barrett, previous chairman of Intel, has spelled out the many areas where we are not competitive. The blueprint we developed for bringing in foreign direct investment, which brought in Hewlett Packard, Microsoft and Intel, is no longer our exclusive blueprint. It has been copied worldwide. Today we have competitors in China, Russia, India, Brazil, etc. Our biggest competitor at this time is Israel. Dr. Barrett spelled out the fact that we are only average in the world at mathematics and science. He says the new technologies of the 21st century will be nano-based, but we are not in the business. Those other countries are competing for international mobile investment, but we no longer have the highly educated workforce we had 20 years ago when Intel came here. We have competition from China, India, Israel and the Middle East. Dr. Barrett said that if we want to come first, we have to compete. We are not even in the race at this time. We have become complacent. We thought we were great, we believed our own story and we let the ball drop.

There is a crisis in employment in this country. The Government talks about a smart economy while forgetting that India, China and Israel are all in the smart economy but their educational standards are much higher than ours, including their level of mathematics and science education. I am despondent at present about this crisis. For me, it is all about jobs. Having started a business in the middle of the 1980s during the last world recession, I saw the psychological effect of unemployment. I also saw, when people got a job, how they began to stand up straight and how their self-confidence grew. Work is not just about the money; it is about meeting and talking to people, and being involved rather than stuck at home, depressed.

I cannot think of anything worse than a person losing their job. Many people are worried at present that they will lose their jobs. Every second day, we are hearing about this or that company going out of business. I am sorry to be pessimistic but that is how I feel, and I always say it as it is. We have our heads in the sand. We have forgotten we are competing with Israel, India and China. Every year, China must create 23 million new jobs for its people. The Government and the people of China are hungry for jobs. We did not have that competition 20 years ago, when we were the only ones with a serious blueprint. Senator MacSharry referred to the IDA being a model but that blueprint is no longer workable to deliver the jobs we need.