Frances Fitzgerald (Fine Gael)

The two banking reports published in recent weeks shatter the myths, illusions and spin which the Government has tried to force on the people. The words "I am sorry" were slow to come from the Taoiseach with him instead preferring to hide behind another two words, "Lehman Brothers".

Now the jury has returned, however, and the independent verdicts are in with a clear result. The reports stated this economic crisis was home-grown, nurtured by policies and a culture presided over by the Taoiseach Brian Cowen and his predecessor, Deputy Bertie Ahern. The reports also pointed to the blind-eye turned to warnings and sound economic advice. Anybody who dared to disagree or express concern was dismissed as a naysayer and even told by the former Taoiseach to go and commit suicide.

The message that rings out clearly from the two reports published by Patrick Honohan and Klaus Regling and Max Watson is that the people have been spectacularly failed by an economic and financial system with the Taoiseach, Deputy Brian Cowen, at its apex.

No one can have confidence in his stewardship of the economy. His failures were directly based on decisions he made and through the regulatory and banking systems he oversaw. These failures have caused misery for thousands and replaced hope with despair for an entire generation. Whoever thought we would return to the days of 60,000 people leaving our shores last year as they saw the country no longer able to protect their well-being or foster their ambitions? Up to 40,000 more people are due to join them this year.

For those who remain, lengthy dole queues ensue with 439,100 men and women unemployed but still no details of a jobs plan from the very Government that did not know how to manage the economy and now is overwhelmed trying to cope with the recession.

Deputy Brian Cowen, when Minister for Finance, talked about a soft landing for the economy. When the economy collapsed, he adopted the mantra of it not being his fault. He was wrong not to accept responsibility.

There had been warnings that a crisis was looming. A long list of individuals and organisations warned that all was not well, that Government policy was unsustainable and that Fianna Fáil was overheating the economy. Patrick Honohan, now Governor of the Central Bank, economist John FitzGerald, various economic commentaries, the ESRI, the IMF, the OECD and the Fine Gael Party all warned of these developments in the economy.

The ESRI repeatedly warned of problems. In 2001 it warned about the need to use fiscal policy to prevent property market bubbles. In 2003, its medium term review expressed concern about unduly expansionary fiscal policy, specifically the failure to control the housing market, surmising the economy was flying too close to the sun. In 2005 the authors went on to simulate the economic effects of a 30% fall in house prices. These warnings were, in turn, ignored, dismissed and even sneered at. Patrick Honohan warned of unmistakable signs of overheating in 2002. In 2005, he warned that the housing and property sectors could have destabilising effects because of the way they were operating at that time. The criticisms, advice and red-light warnings were there for all to see but the Department of Finance and the Government appeared blinkered. I call on the Minister to comment on the points which Michael Somers made at the weekend in respect to the lack of good advice. Yesterday morning, Senator Boyle commented on this matter as well. I refer to comments from recent days in respect of the Department of Finance and its response at the time. Yesterday in The Irish Times, reference was made to poor advice from Department of Finance, which is extraordinary.

We offered many warnings. It is wrong to say Fine Gael did not point out what was happening. Nothing could be further from the truth. Consistently, we warned that Government economic policy was overheating the economy and undermining the Celtic tiger. Like all others, our warnings were ignored. I wish to put some of these warnings on the record of the House. In 2002 we stated, "It suits members of the Government to say it is the global economy rather than their own appalling and inept mismanagement that is the cause of this". On 3 December 2003, Fine Gael stated:

The sad reality is we are experiencing the legacy of the 'get out and party' years. Never did a Government spend so much to achieve so little.

In 2005, we warned, "Not only did Government spend money recklessly, particularly in the run-up to the previous general election, it also allowed proper controls and performance systems to rust over". When one reads the two reports published this week, this is precisely what is spelt out about the absolute failure of the economic, fiscal and financial policies of the Government. After the 2008 budget, Fine Gael stated:

The Minister talks smugly of a timely housing correction. The Government presides over a dysfunctional housing market. Change in the way taxpayers' money is spent is already long overdue.

These words and many more are on the record of the Dáil and this House for all to see. As the reports of last week stated, the Government cannot blame Lehman Brothers, a lack of economic warning or the Opposition. The blame rests with those in charge, those who made decisions and those in control of economic banking and regulatory policies. The reports outline an examination of each of these areas and in each case there are significant and serious failings which have had an extraordinary impact on the lives of this generation of Irish women, men and children.

The two reports vindicate the charges made. The reports clearly show the Government played a central role in causing the crisis. This is denied again and again but it is clear that its role was central. The misjudgments by the current Taoiseach were at the heart of the problem. These reports demolish all his excuses and the guilt is plain to see. It is a very serious and comprehensive rebuttal of the policies of his Government and his time as Minister for Finance. On page ten of his report, Mr. Honohan notes "More generally, a rather defensive approach was adopted to external critics or contrarians". On page 16 he notes that:

the weaknesses of Irish banks were not caused by the interruption in the flow of cheap money from abroad. Even before the failure of Lehman Brothers in September 2008, Irish residential property prices had been falling for more than 18 months and few observers expected their fall to end soon.

He found that the failure of Lehman's was not decisive and he outlines that:

a soft landing was not based on any quantitative calculations or analysis. This appears to have been a triumph of hope over reality.

He goes on to outline how Government policy played a central role in contributing to the crisis and outlines the negative impact of the Taoiseach's budgetary policies as Minister for Finance. They have had the most extraordinary impact on the lives of ordinary people.

As everyone in the House is aware, people are hurting due to these inaccuracies, errors and failures. Everyone has paid a price for these failure of the Taoiseach. That is to say, everyone except the Taoiseach. Hospital beds have been closed. People's sons and daughters have been forced to emigrate. Special needs education has been cut left, right and centre and social welfare recipients have been penalised. However, the Taoiseach continues in office. He has not faced up to the serious impact that his decisions have had on the lives of Irish men, women and children. He has led us into this crisis. It is clear that far more will come out about our banking crisis. For example, it is clear the reports have not examined the NAMA decision. They have not examined the capitalisation of the banks. There is a cut-off date which does not include the guarantee scheme. At this point, we do not know the full story of the range of decisions for which this Taoiseach was responsible and which have led us into our current position. We lack confidence in him and I move the motion which Fine Gael has tabled.