Conor Lenihan (Dublin South West, Fianna Fail)

Without dwelling on the policy chasm between the two main Opposition parties that are meant to replace this Government, it was amusing to listen to an Independent Member suggesting that default was an option and comparing Ireland with Argentina. In fairness the Fine Gael and Labour speakers this evening did not go down that road, which is a road of utter madness. One cannot compare the Russian or Argentinian economies with the Irish economy; they are vastly different economies in vastly different stages of economic, political and regulatory development. Our economy does not enjoy, as do those two other economies mentioned frequently in what passes for economic commentary here, the interest rate or currency levers and we do not control our money supply. We are elementally knitted to part of the European Union through the single currency. As long we are part of that our room for manoeuvre and our default option, the devalue option and of course the quantitative easing option are not available to us. That is a critical difference between us and every other country which has bothered to default or move their way out of a crisis such as we face through devaluing currency, lowering interest rates or just printing money; we are not in that space.

Eight or nine years ago when I served on the Committee of Public Accounts under the late former Deputy, Jim Mitchell, while I did not get much of a hearing from the other members, I suggested the idea of us adopting the Gramm-Rudman type legislation that was being promulgated in the United States of automatic reductions in public spending when they got to certain levels. We need to consider such options again. I was surprised that there were no takers at the time. There is no doubt that this Government has been culpable - we put our hands in the air in this respect - of being very generous in our spending allocations in health, education and social welfare over the boom years, and we are now stuck with those increases and forced to reduce them in a manner commensurate with the times in which we live. We do not impose austerity with pleasure or relish, but the cost structure of the State must be reduced.