Marc MacSharry (Fianna Fail)

I join others in welcoming the Minister of State and am glad to have the opportunity to make some points on the economy. At the beginning of this session it is important that in our debate we communicate a strong and clear message that the Government and all Members of these Houses are prepared to take the necessary action and dispense with the pantomime politics which have taken up so much time over the past two years.

The airwaves seem to be exclusively filled with academic economists vying for position to ensure they are the ones chosen for the "Prime Time" slot, "The Frontline" slot or the "Tonight with Vincent Browne" slot. Last night, one wondered why we needed three of them vying for the position at the same time. They were comical in the extreme as one said to the other: "Don't you agree with that, David?" This is the kind of pantomime and comic entertainment to which serious economic issues have been reduced.

I was delighted to hear the contribution made in the House this morning by Senator Paul Bradford, who is always measured, intelligent, informed and thoughtful in his comments. He was the same in the Dáil and has been the same in this House in the eight years I have shared here with him. He said we should let the Punch and Judy show stand aside while we look forward to an inevitable election in due course. We on this side of the House say that is likely to follow the full term of this Government and following all of the actions that must be taken. He went on to say that in the meantime we should focus our views not on the "Oh no you are not, oh yes we are" blame game of who is right or wrong or who could have done things better and focus instead on what has been done correctly, what continues to be done correctly and what must be done in the interests of the people. Clearly this will be painful for every household and is not palatable for anybody in or outside of the Houses, but is the reality.

We have had various reports placing the blame and these will continue. We had Professor Honohan's report, the Regling and Watson report and the report of the Joint Committee on Finance and the Public Service, which had the help of experts to assess the role of macro-economic and fiscal policy in getting us into our difficulties. We are in those difficulties and must now, as the Minister of State said, reflect on some of the serious actions that have been taken over the past period of time. On the Order of Business today, which was largely taken up by commentary on this morning's announcement and the economy, I was appalled to hear a Senator effectively call the Minister for Finance a liar, saying he had misled the Houses. At no time did the Government mislead the Houses, but it is proven to have acted on the best information that was given to it at the time. In the context of the bank guarantee, there is much talk suggesting we must have known about the solvency-capital situation. At that time, the only talk was about liquidity. As soon as it became evident, when we set up NAMA and began following the PwC and other reports to look under the bonnet of these reckless institutions which were backed up by a reckless national and international regulatory regime, we took the most aggressive action in the world to rectify the situation and to assess the haircuts, no matter how draconian. We did not package it up like the Germans did, who for example insured against them hoping that when they take a close look in ten years time the situation will be better. We faced up to our problems from the off, as painful as that has been and as the situation regarding costs has become clearer, we have faced up to that too.

Thankfully this morning, as a result of the determination and actions taken by the Minister for Finance, Deputy Brian Lenihan, and his Cabinet colleagues, we can reach finality on Anglo Irish Bank. There is no question as to the disgracefully unpalatable amount of money that must be put into it, but we have the total. We are also aware now of the additional amounts that are required for AIB and Irish Nationwide etc. We must now look at the bigger picture in their regard. If one considered the amounts stated this morning as sums going into our national debt, they would amount to 98.6% in terms of debt to GDP ratio. However, when one deducts cash the NTMA would have plus the National Pension Reserve Fund, the net GDP ratio is 70%. Obviously, as we contemplate the kind of borrowings that must be done to get the ship moving in the right direction during the next few years in order to reach 3% by 2014, that ratio will grow to approximately 105%. This is manageable. If we reflect on the 1980s, the ratio was from 100% to 120% and more. We got through that then.

Senator Norris and others reflected on the positivity in yesterday's debate and on looking forward to what can be done. The public, rather than needing the pontification of academic economists vying for position need instead assurances from Members of these Houses that they are prepared to take the action on the public's behalf. There is light at the end of the tunnel. The election will come soon enough. We will take our chances then, based on the actions that have been taken on behalf of the people. However, at this point debate on the economy should only be about the future and the tangible actions that can be taken and the recommendations Fine Gael, the Labour Party, Sinn Féin and the Independents have for the Government. The Minister has consistently said they are pushing an open door. If they have a view or suggestion that is better than the ones we are pursuing, give them to us in order that we can assess them, move forward and embrace them if they are to be embraced on the basis of best advice, but that has not happened. I commend Senator Bradford. Every Opposition Member would do well to read his mature contribution in the Official Report of yesterday's and this morning's proceedings. They were mature comments by somebody who could be in government some day. Heretofore many Opposition Members were vying for position with academic economists and wanting to make sure they would be the first on the list of callers for researchers working on "Frontline". The debate is about the tangibles that will make everything better.

There has been a marginal narrowing of the bond spreads this morning from 6.78% to 6.7% and I am confident that when the markets have had time to assess the recapitalisation announced earlier and the process on which the Government will embark in November when setting out its four-year strategy to bring the fiscal deficit within 3% of GDP, there will be a further narrowing. On the comment that it is disgraceful that the NTMA will not hold bond auctions for the next two months because of the potential impact, it would be ridiculous in the extreme from a business perspective for Ireland to go near the bond markets until its future plans can be assessed by them. This is a basic business decision. We have enough money for the next eight to ten months. Why would we contemplate paying a premium of 6.7% or more at a time when we do not require the money, given that the markets have to analyse what the Government has put forward today as a viable way forward for the country? I checked the bond spreads on my BlackBerry before commencing my contribution and the initial indications are it has reduced to 6.7% and I am confident they will narrow even further as the Government continues to take action. The Minister for Finance has stated the budgetary framework for the next four years will be outlined in November and I am confident this will lead the country back on the road to recovery, far from the doom and gloom preached by economic academics who are determined to appear on various television and radio shows. Let us dispense with the pantomime politics in the Houses and focus on the tangibles.

With regard to the economic outlook, the Central Bank, the European Commission, the OECD, IBEC, Ernst & Young and various stockbroking firms have all forecast economic growth next year of between 2.3% and 3.5%. The Department of Finance budget forecast for GDP growth is due to be published soon. During the summer it revised its forecast from -1.3% to 1%. Export-led growth will ensure the sustainability of the economy. This has been a strong performing area in the past year. The value of exports in July increased by 12% year on year, but we have heard none of the economic academics talk about this. "Don't you agree with that too, John?" Peter Matthews said to David McWilliams last night. He replied, "Oh, I do, of course, David, that is very good, quite right."