Marc MacSharry (Fianna Fail)

I welcome the Minister of State for what is now our almost daily debate on economic matters. I suppose it is appropriate that we are engaging in such a debate, particularly in the light of the seriousness of the scenario.

The Minister of State provided a detailed outline of the specifics relating to the documents in their current form. It is expected that the substance of both documents which are before the Houses for assessment will remain the same. As the various commentaries in the political arena and elsewhere indicate, people are happy and unhappy about certain aspects of both documents.

The crisis has moved from Ireland. The funds that will be made available to the country under the EU-IMF package will provide us with the point of inflection for which we have yearned for two years. The changing of the goalposts at various points during the years has not been of assistance. The Government was obliged to take decisions on the basis of the best information then available. At times, the said information was less robust than we might have hoped for. Now that the goalposts have been moved, certain things have changed.

As the Minister of State indicated, it is worth noting that the European Union, the IMF and our colleagues in the eurozone have endorsed the various measures the Government has implemented to date in dealing with the deficit in the public finances and resolving issues relating to the banks. In the light of the fact that the goalposts were moved and in view of the quality of the information sometimes provided, it is obvious that the problems in the banking sector were caused by a national and international regulatory regime. We have ended up in serious trouble as a result.

I am optimistic that the EU-IMF package will be the source of the point of inflection to which I refer. I am also optimistic that it will allow us to operate outside the international financial markets, the approach of which to Ireland has been far too frenzied in nature. The focus has now moved to Spain and other countries. When the President of the European Central Bank, Jean Claude Trichet, makes an announcement in the next 20 minutes or so, I hope the international financial markets will take a different view to the eurozone as a whole. However, that matter is not in our domain for now and I believe the funding being provided will present us with the opportunity to continue to make structural and other reforms and meet the shortfall in income and expenditure.

I hope the reforms relating to the banks will be introduced quickly. It is clear that a banking Bill is to be introduced either next week or the week after and I look forward to its introduction. Notwithstanding the level of public anger regarding the vast sums of money involved, we have no choice but to invest in the banking system in order to try to stabilise and restore it; everyone wants to draw a line under the issue. As the Minister of State indicated, we must restructure the banking system to bring it more into line, from the perspective of size, with the needs of the economy. The system must be stable and sufficiently well capitalised to allow it to provide families and businesses with the means to survive and operate.

I wish to ask a number of questions on some matters on which Senator Twomey touched, the first of which relates to the individual rates of interest that will apply. My main question is on the sequencing of the draw down. What is the first money? Presumably, it is the money that will come from the State's cash reserves and the National Pensions Reserve Fund, the use of which I welcome. I want to mention the criticism for using it coming from some quarters, in particular that of Deputy Burton in the other House. In December 2002, Deputy Burton was criticising Government for shovelling money into this fund. My only regret is that we did not shovel more money into the fund. If we had, then we would have to borrow less or seek less support. What strengthened our hand in negotiations with the IMF in the context of what deal we could get was that we had some of our own cash reserves. Clearly, in sequencing, I am assuming we will draw on those resources first but I am interested in which source will be next called upon. Will it be the European financial stability mechanism or will it be the IMF? Clearly, the different amounts will involve different interest rates. I express the wish that since the IMF may be the next cheapest it should be drawn down next.

I am also optimistic, albeit with relatively modest growth forecast for the coming years, that within the three year period it is conceivable we can return to the bond markets and, regardless of who is in Government, we can get some of that funding, which is a facility of some €85 billion made available, sourced from other means. Of course, that would be open to the Government of the day as an Executive decision if there are means to do that and it is more competitive to do it. I would appreciate if the Minister of State could, to the extent possible, deal with the issue of sequencing and individual interest rates, as Senator Twomey sought, and I understand it may not be possible to give all of those.

On the overall average interest rate of 5.8%, the criticism that it is too high and us paying more than Greece, I note the Minister of State touched on this. Greece now is seeking Ireland's terms. It was on shorter money - three and a half years or thereabouts at 5.2% - and we are getting close to ten year money at 5.8%. I suppose if one was looking for that in the markets today, it would cost 9%, or a little less because in anticipation of the announcement by the ECB today on bond purchases, the markets have calmed somewhat. However, I think it will cost Spain something similar to source that kind of money from the wholesale markets. All things considered, the rate was quite good.

Without question, the interest payments will represent in the region of 20% of revenue in 2014. That is a vast and unacceptable amount, but we are in this situation and we must deal with it, and no doubt we will. I recall, of course, that in 1985 payment costs reached close to 35% of tax revenue and at that point our debt to GDP ratio was significantly higher than it would be if we drew down all of this money.

That brings me to note the many positives. While there has been a rightful focus on many of the matters that did not serve us well over the past number of years throughout various debates in this House, including today's, it is also important to acknowledge that many of the wins of the tiger years, for want of a better expression, are secure. The Minister of State mentioned the investment in infrastructure, in people and in the education system. There are still 1.86 million people at work, which is significantly more than even ten years ago. There are many positives to be built upon and the template is there to allow us grow to our potential in the future, regardless of who is in Government. Senator O'Reilly mentioned on the Order of Business that people were entitled to have hope, and they certainly are. Regardless of who is in Government, I have that hope. I am fully confident in the resilience of the Irish people to bounce back from this challenging and difficult time, and I believe we will do it quickly. This deal with the IMF and the EU provides us, as I stated, with that point of inflection from which we will grow quite quickly and I am optimistic about the year ahead. I note the Opposition has stated that the Commission has been more conservative in the context of its growth forecasts over the years but, as the Minister of State said, it has also revised our export forecasts upward. Indeed, the ESRI states that the forecasts of Government, and particularly of the Commission, are too conservative. Let us hope that such may be the case.

Europe is due a bounce of the ball and it has not come over the past number of years. Certainly, the crisis has moved on to Spain, and we will see what happens this afternoon. However, we in this country are fully financed for the next number of years. As I mentioned, the possibility to source some of that funding from the other markets still exists, but that money is there. Let us get down to focusing on getting the deficit under control and getting the public finances back in line. As the Minister of State also stated, much of this work had been started and is ongoing.

When I read today's newspapers headlines, such as "IMF names its price" in the Irish Independent, there is nothing in it that particularly scares me. Indeed, much of it was underway in any event. I wanted to mention the Croke Park agreement because for it to suggest that we will allow another nine months for what is effectively a business plan to be implemented is ridiculous in the extreme. While implementation plans are in - I have spoken to many trade unionists about this - there is simply no excuse. If it were a company, it would agree the business plan today and it would be implemented the next morning or the company would be gone out of business. The threat of a pay cut being an incentive to do a job to one's potential is laughable but to allow a further nine months for the implementation of it is ridiculous in the extreme. If the Croke Park agreement is implementable, then implement it in a matter of days and weeks. Certainly, to preside over a plan which states we will do it over the next nine months is not the correct place from which to start.

As we continue down the path of fiscal rectitude my personal opinion stated clearly on many occasions previously is that everybody over a certain level in pay in the public service, whether it is €60,000 or €70,000 and maybe it is higher or lower - let us agree in partnership with the unions - needs to take a percentage cut. I also stated this morning on the Order of Business that State-connected or supported entities, whether in the semi-State sector or in sporting organisations that receive substantial grant aid, cannot preside over monster salaries in an era where there is a national emergency. This morning I gave the analogy from a sports perspective of the Sligo Rovers bonus for having won the cup of €100,000 for the club, but in the meantime the State-supported FAI paid its chief executive €450,000 a year. It is not to hone in specifically on the poor CEO of the Football Association of Ireland but to make the point that there is a great deal of State funding going to organisations like these.

This morning Senator Ross mentioned the banks, as did Senator Twomey in his contribution. To be paying bonuses in this day and age is disgraceful. It is not in the spirit of solidarity, which circumstances have demanded of all of us and to which most have lived up. The banking sector, while there are many good people working in it, has contributed in such a significant way to the mess we are in and it is inconceivable that we can preside over paying bonuses to them.

I welcome the programme. It will provide us with the template from which to go forward. We have many difficult challenges and difficult things to do ahead. However, the international crisis has moved on from us for the moment and let us focus on getting our own house in order. We clearly now have the means to do it at an interest rate that is competitive in the current market, and as I said, there is a possibility always to opt out and go to the market for other funding when there are calmer conditions in the bond markets.