Mark Dearey (Green Party)

It is extraordinary that the House is discussing the merits and shortcomings of an EU-IMF programme of financial support for Ireland. What has happened is my worst nightmare.

Last Saturday in Drogheda, I addressed a group of young people from Ireland and Africa at a development perspectives event. They were anxious to know how this country arrived at its current position. I found myself speaking to these young people, especially the Africans who kept asking probing questions, not primarily about banking debts, the size of the banks relative to the economy or the country's excessive reliance on the banks but about politics. I spoke about my background in local government and my experience, albeit less than extensive, in this House. I pointed out that Ireland, as a small, open economy which relies on its ability to trade with the rest of the world, needs a more robust political system to enable it to withstand the worst excesses of the free market, to which we have had a purely ideological attachment at times. This economy was always likely to suffer more than other economies when the train came off the rails, as it did.

The political system and process have been incapable of dealing with the type of structural problems that were deeply embedded in national life and the economy. I spoke about the need for a new type of politics in which the demands of the parish pump are secondary and the primary focus is on clear eyed, rational structural analysis. This may mean having fewer Deputies elected from multi-seat constituencies and more appointed from a list system drawn up by the political parties on the basis of expertise or by communities on the basis of how embedded they are in their locality. We need to rethink the reason for politics because the costs we are paying for the failure of the current political system even to moderate the effects of the collapse demand it.

The national recovery plan is an imperfect document in many ways. As a member of the Green Party, which has been part of the Government and participated in recent negotiations, it would be dishonest of me to deny I shared the feeling of national humiliation about which Senator Ross spoke. However, I also welcome aspects of the plan. The banking sector will be shrunk to a size appropriate to the economy. We will also be able to call it when banks lie to public representatives, as they have done repeatedly, including recently when they did not honestly provide basic information on the percentage of performing loans on their books.

I welcome many of the structural reforms to the financial sector which we will be compelled to implement. While we should have done this ourselves, as I noted, the system was probably not able to handle it. In addition, minimum capital requirements will be increased and a strategy for the reorganisation and downsizing of the banking sector must be presented in the first quarter of 2011. Legislation on improved procedures for early intervention in distressed banks will also be brought forward to the first quarter of next year, as will legislation to address the issue of burden sharing, albeit in regard to subordinated debt.

I concur with Senator Donohoe's comments on the language, concepts and outcomes regarding how we deal with debt. It would be awful if, having played the role of an obedient member of the European Union, we were to find out later we had been outflanked by other EU member states which may end up renegotiating debt. Senator Ross spoke about the attitude of the Italians should they be faced with such a prospect. I do not believe it was possible for Ireland to make a unilateral decision on the issue of senior debt. While I understand the IMF favoured renegotiation of such debt, the European Central Bank opposed such an approach. I can understand the reason the ECB did so because it wants to protect European pension reserves and banks which are highly exposed. If we are able to avail of a burden sharing mechanism in future, we need to be alert to that prospect to ensure we are not left behind by other countries which may enter such a mechanism. I am pleased legislation on subordinated bondholders will be brought forward.

While some of the proposed structural reforms are welcome, others are not welcome because their utility is unproven and they are driven purely by the ideological concerns of their advocates. I propose to discuss two unwelcome proposals. The first is the statement in the plan that State utilities should have a role in paying off some of the country's debts. While this may not amount to an explicit proposal to sell them off, it is not far from it.

Bord Gáis, Bord na Móna and the Electricity Supply Board have committed to invest more than €30 billion in the economy in the years ahead. This financial provision, which the companies will be able to make, will drive economic growth. Moreover, the ESB and, in particular, Bord na Móna, are embracing the technologies and knowledge based skills that will deliver an economy that is not reliant on imported oil and other fossil fuels and will allow Ireland to substitute much of our annual €6 billion in oil imports. To have the privatisation of these State assets looming on the horizon when we are on the cusp of taking advantage of such opportunities could be a fatal mistake and may cost the State more than it will save.

Anything could happen if State utilities are privatised. For example, they could, as was the case with Eircom, be passed around global corporations which will asset strip them and rob them of investment. We would lose the opportunities available to us as a nation rich in renewable energy. I would like to see a cost benefit analysis of the privatisation of State assets. I am convinced that by retaining control of these utilities, the State would be much better positioned to repay some of the overwhelming debt we face.

The second unwelcome proposal, one on which there also appears be a lack of analysis, is the request that we revisit the cap on retail space. This is regarded as a structural reform to drive competitiveness in the retail sector. While I accept that large supermarkets or hypermarkets can drive down prices, provision is made for the introduction of such large retailers in gateways as part of the national spatial strategy, albeit only in areas where the population is sufficiently dense to sustain them. The reason for the restriction is to ensure they do not drain local economies within a radius of 50 miles of every petrol station and corner shop. I am concerned the plan will run roughshod over this key provision in the spatial plan.

The Opposition has usefully proposed that it will address specific issues in the years ahead without changing the overall framework of the plan. Effectively, this will mean renegotiating particular aspects of the plan. I hope the Opposition and all parties will continue to press this case and try to achieve maximum flexibility.

The requirement to report the national balance sheet on a weekly basis should be more than sufficient for our overseers and provide proof positive that we are achieving our targets. At the same time we can address some of the more ideologically driven proposals although I would caution against that.

The coming budget is, in effect, step 1 of the four year plan. Many clear indications have been given, as was necessary, in regard to where the burden of the budget will fall. I would be very anxious, even at this late stage, to see a greater commitment to equity within the budget. Specifically, I wish to see higher paid civil servants, among whom I include politicians although not exclusively politicians, bearing a significant portion of the burden all of us must carry in the time ahead. It is untenable for us to seek welfare cuts and exclude ourselves from the cuts while asking others to take them. I do not believe the people will accept that. It would be advisable at many levels that the budget should put equity first while addressing the very painful demands of the plan. To return to a phrase used in another context, burden sharing is the way to do that.