Larry Butler (Independent)

I welcome the national recovery plan which sets out the direction the country will take in the next four years. It is a first because we usually consider budgets on an annual basis. However, the plan shows how we will do our housekeeping and keep our finances in check, which is most important. We have been spending far too much money and getting little or no return for it. We have not been effective in curbing expenditure on the public service, but this document clearly sets out how we will do this and make up the difference between what we borrow and spend. That is both good and vital.

The red line we defended, the 12.5% corporation tax rate, is an important feature of the plan. If there is to be growth in the economy, it must be generated by inward investment and export-led companies. That is where growth is anticipated in the plan. However, how will we negotiate the loan in the context of the plan and the budget? It is extremely important that we get the right balance in what the ECB and the IMF will charge us in interest. As I said this morning in the House, unless we secure favourable rates, the savings to be made under this welcome plan and in the forthcoming budget which aim to balance the budget will end up being paid out in interest. That will not create jobs, only negativity in the economy. It is important, therefore, that we beef up our negotiating team in order that it can explain that if people want their money back, the economy must grow. We must be even more ruthless. A total of €90 billion is owed to the ECB. We must tell it that we could default on that debt if we cannot afford to meet the repayments. Therefore, I believe a rate of 2.5% or 3%, not 5%, is the ball line we should seek. Remember, every percentage point represents a sum of €1 billion.

I am disappointed that the document does not include one of our growth areas, the green economy. There is nothing in it to grow the green economy. The energy industry is probably one of the most important we could develop at this time. Why? First, it will employ people. It will also provide us with an export industry. It will help us to save on imports; over ten years it would save us €60 billion. It is important to look at where there is growth in the economy and this is one area in which there is growth. We have the greatest sources of wealth in Europe in terms of energy resources. Some strides have been made in harnessing some of this energy with our wind farms. However, we now have an opportunity to install storage facilities to store this energy, instead of ploughing it into the grid when the wind is blowing and there is no spare backup. We could harness this energy and sell it at a vast profit.

The Spirit of Ireland group gave us an update a week ago on its current position. It has a €3.5 billion investment ready to go. It is important that the Government has a policy on energy and the upgrading of the grid which will be vital for us in the next few years, especially when we will be paying high interest payments. It is also important for the European Union which is supporting the bailout. A contagion from our problem could spread to the rest of the Union which could make matters far worse.

The ECB which appears to be run by the German Government because it wants to keep its bonds at a valuable rate and very much in demand has not done much to deal with our exporting position. The euro has changed very little in value against the dollar, but the Americans are printing more money. They are making the dollar less valuable in order that they can export more cheaply. Who else is doing this? The Chinese are and making their exports cheaper. They are also cutting their costs. That is what this plan is about and I strongly support it. I wish to see everything in it being implemented.

The plan will change politics in this country for the first time. In the next election campaign no one will be able to promise anymore than what is contained in the plan. It will be the document for the next election. Whatever Government is elected will be able to tweak things here and there, but the 3% target to reduce our borrowing is sacrosanct and vital.

The problems in banking are serious and could undermine the recovery plan unless they are dealt with. They can only be dealt with by the ECB as they are too large for Ireland to handle on its own. It is important to show the European Union that we are serious about the budgetary plan. We have done so with the €6 billion in cuts to be front-loaded and by ensuring the balance of payments will be corrected. However, all this will be for naught if we do not get a good loan deal from the European Union. Greece was able to borrow at the reasonable rate of 4.4%; Ireland must be offered a similar rate.

Alternative energy production is one area in the domestic economy we can develop. Five wind power generating stations on the west coast could make us virtually self-sufficient in energy supply, save us €60 billion on imported fuel in the next ten years and even give us up to €10 billion in energy exports. This is what we need to hone in on to ensure the economy will recover.