Niall Ó Brolcháin (Green Party)

I welcome the Minister of State to the House. I am delighted to be present to speak on this matter. It is an honour to do so in the present company because the Members present are very fair minded. I very much welcome Senator Bradford's speech and concur with much of what he said.

In my speech I would like to examine the past, present and future. This document is an appalling one. Most would agree it is necessary but no one in this House or elsewhere in the country is remotely pleased that we are where we are. It is dreadful we are in such circumstances and that we require the EU-IMF package. There is much to be learned. The only way we will be able to prevent ourselves from making the mistakes of the past is by considering them. A great saying I love implies that the only thing man learns from history is that man never learns from it. Unfortunately, being in politics, I do not wish to buy into that saying because I believe politics can make a difference.

With regard to Senator Bradford's contribution, systems, especially political systems, are rarely reformed from within. Political systems require a good cross-party consensus, but in order to be reformed they also require an outside impetus. It is rare that a political system is changed dramatically from within. The system under which people were elected is what they tend to protect, particularly if they want to remain where they are.

I am of the view that our difficulties began prior to 2000. I was not in favour of the level of federalism in Europe at the time or the introduction of the euro, particularly in the context of the way in which it was being put forward. However, I am a very strong advocate of the European project. I wrote about this matter at the time and indicated that bringing together in a very loose affiliation a number of economies at different stages in their cycles and underpinning the project by introducing a new currency - the euro - was a recipe for danger rather than disaster. I considered it would not be a disaster because there was always the hope the economies would come together and that their economic cycles would come into alignment. In the absence of a clear political direction, however, this was always going to be difficult to achieve. My party's leader alluded to this matter in a well publicised speech he made in recent days. I accept that our points may not be exactly the same but they are similar.

This country experienced a boom up to the year 2000 approximately. We had never experienced such a boom before and made a great deal of money, particularly in the area of IT systems in which I was involved. In fact, money flooded into the country and people who had previously emigrated and garnered great skills while abroad began to return. They used the skills to which I refer to help to create the Celtic tiger, of which everyone was so proud at the time. Unfortunately, between 2000 and 2002 we reached a plateau and our economic cycle appeared to be coming to an end. What we needed to do, therefore, was to begin to dampen things down. Instead, we joined the euro and gained access to much cheaper interest rates than should have been the case. We did not have devaluation, rather we joined a currency that was underpinned by a different economic cycle. From what I can gather, the upshot of all of this was the beginning of our wonderful housing boom. We used unsustainable funding to fuel wage inflation and boost the economy in a way which was inevitably going to cause the entire thing to come crashing down at some point.

The systemic problem we are facing is not purely Irish in nature. It is actually a worldwide one. In trying to understand this problem I would be prompted to consider as causes the end of the Cold War and the issue of peak oil and the massive increase in oil prices which preceded the collapse of Lehman Brothers. If one does not take account of the ecological and natural worlds in one's analysis or take a holistic view of economics and society, one will never see the full picture with regard to what is likely to happen. As a result, one will not be in a position to make proper predictions.

We used the housing boom to insulate ourselves for a number of years, but, unfortunately, this was never going to last. I recall Mr. Michael McDowell desperately suggesting stamp duty should be abolished for first-time buyers and reduced for others in order to further fuel the boom. Thank goodness, this did not happen because it would have placed us in an even worse mess. We must learn the lesson that the idea of paying less tax, having more income, paying higher wages and providing better services all at once is just fantasy. Those who pointed this out during the period to which I refer were pilloried. There are some who state this matter was never mentioned at the time. It was and many articles were written about it. A number of famous - now infamous - journalists and commentators highlighted what was going to happen. However, the prevailing wind was very much in their faces. I seem to recall a certain former Taoiseach stating those who talked down the economy should contemplate committing suicide. That was an outrageous statement to make.

Up to 2007, estate agents continually appeared in the media in order to state the housing boom would never collapse but would instead level off. These individuals were given airtime to make their case, which was obviously nonsense. I recall telling people that what was being suggested would be unprecedented in the history of the planet. The estate agents to whom I refer appeared to be of the opinion that the laws of gravity did not apply to the Irish building boom. What they suggested would have equated with one throwing a stone up into the air and expecting it to stay there. The laws of gravity tend to apply to every single building boom. Eventually, the stone fell out of the sky and the building boom ended.

What has happened in the years since 2001 has caused us to be less capable of dealing with the global crisis. It is not the case that we caused the latter and we should not take the blame for doing so. The monetary difficulties being experienced are global in nature. They are being experienced in Europe, the United States and across the entire western world. There will be grave problems in the coming years, but I hope these will be solved.

Ireland is in the first tranche of countries to be affected by what has occurred. That should not have been the case. We should have planned for the future and not acted like children in a sweet shop when the euro was introduced. Unfortunately, we made a large number of mistakes and did not make adequate plans for the future. That is the legacy our political system has left us with. Senator Bradford hit the nail on the head in that respect. The key lesson we must learn relates to the reform of the political system. That reform must be the outcome of the current crisis.

The political system is not coping with the crisis and no one in this or the Lower House is prepared to state it is coping. Before I entered the Chamber, somebody pointed out to me the irony of Ministers trying to deal with queries from their constituents relating to housing, potholes or snow drifts at a time when we were trying to deal with such a major crisis.