Marc MacSharry (Fianna Fail)

I support and commend Senator Carroll on his proposal into which he has put a great deal of work. It is innovative and creative and is the kind of issue to which everyone in this House should be dedicated at present. It is thoughtful in the context that one rarely seeks - certainly, the Department of Finance is nervous about it - to reduce VAT as a means of stimulus. Senator Carroll has shown through his research, however, that with the use of the Sixth EU VAT Directive, such a measure is permissible and has proven in other countries to create employment, not least in helping our environment in terms of retrofitting many buildings. It would give adequate stimulus. I ask the Deputy Leader to make time available in order that we can discuss the merits of it as a matter of urgency.

Another proposal which I have made to this House in recent times in the context of forthcoming actions in trying to deal with the economic crisis was to see whether the Government could introduce a change in order that the Irish Government bond yield rather than the German yield curve would be the valuation benchmark for Irish pensions. Currently, pension funds are required to use German bond yields when calculating the minimum funding standard or current valuation of future liabilities of pensions.

This development would bring two benefits. First, it would create additional demand for Irish bonds from Irish pension funds. As Members may be aware, less than 15% of Irish debt is owned by Irish sources. Second, it would improve the solvency of specific funds by enabling them to discount their future liabilities at the higher Irish bond rates rather than the lower German bond rates. Reports in recent weeks state this could increase demand for Irish debt and Irish bonds by up to €10 billion and, as anyone who has seen the yields this morning at up to 7.3% will testify, we certainly need that in this country. At 15%, the amount of debt owned by Irish institutional interests is very low. In Spain, it is expected to be 90% at the end of the year. Rather than being ultra-conservative as it so often is, the Department of Finance needs to follow the industry and the calls of others, including myself and other Members of this House, and take the appropriate action in this regard.