Darragh O'Brien (Fianna Fail)

In response to two points raised by Senator Gilroy, I put on the record that we gave credit where it was due - excuse the pun - to the Taoiseach, the Minister for Finance, Deputy Noonan, and the Minister for Public Expenditure and Reform, Deputy Howlin, for the work in which they participated to ensure a rate reduction not just for this country but for other countries. I have no difficulty saying that they did a good job. All of us are keen to ensure that citizens are protected as best as possible. If savings accrue to the State, which from looking at the figures could be in the region of €800 million or €1 billion per annum, that must be welcomed. I welcome it unequivocally.

Since the Government came to power it has seen that this is not simply an Irish crisis. I agree with a number of points made by Senator Barrett. In particular, he said that Europe has been far too slow in dealing with the economic crisis. Mixed messages are being sent. Europe is not working as a community. Peripheral nations exist. The axis of power has definitely swung towards France and Germany. I do not get a sense from them that they are dealing with their partners in Europe on the basis of community but on the basis of sovereign state interests.

With that in mind I have a couple of questions to pose to the Minister. As part of the new arrangements in the EFSF each state must ratify and agree the new legislation. Finland and other countries have sought additional collateral from Greece in particular before signing up to it. The Finns are the most prominent in that regard. None of the rate reductions to which I referred have been passed on yet because they are not in place. It is my understanding that the reductions will not come into effect unless all countries sign up to the legislation. Perhaps there is an update on the current Finnish position and how the negotiations are going with them and other countries.

The term "economic sovereignty" has been bandied about. I speak from my own point of view and do not expect everyone to agree with it. I and some of my colleagues met the troika in July of this year. We put that very question to the members on the Government saying it could not do X, Y or Z because we have lost our economic sovereignty. That is not true. Any Government has to work within the constraints of what is available to it, as was the case with previous Governments and the four-year financial package. It is for the Government to make choices on how it gets to the 3% deficit reduction target by 2015.

I reject the idea that this country has lost its economic sovereignty. It has not. I accept that the country must work within the confines of an international deal that has been put in place. It has had to do that as part of the eurozone in any event. When we put it to the members of the troika, they rejected that too. I will not be overly political but promises have been made on no income tax increases or social welfare rate cuts. Two weeks ago the Taoiseach said he would have to go back and negotiate with the troika on whether it is possible not to have any income tax increase. There is no specific reference in the agreement to income tax. We are talking about €2.1 billion being raised in taxes.

It is not true that we must go back and negotiate no increases in income taxes. The choices are for the Government to make. I know very well that they are difficult choices that will not meet with broad agreement. I have no doubt there will be issues that are contentious and controversial. The Government must be straight with people, however, and it cannot hide behind the deal with the troika, saying, "Our hands are tied because we cannot do this, that or the other". The choices within reaching the 3% by 2015 are for the Government, as well as for the Seanad and the Dáil.

The fiscal plan will be published shortly and will be up for discussion in both Houses, which I welcome. It is a good initiative to show citizens in advance what we are doing in each area. If the new EFSF facility is passed by all member states and savings to this State are in the region of €800 million, will the Government's targets take that into account? What will those choices mean for the general public? The Government is targeting €3.6 billion this year, with a further €3.1 billion next year on the basis that €800 million will come back to us next year. Given those savings, will the Government revise those targets downwards to ease the financial pressures?

We have been talking about the banking crisis, both here and in Europe, for months. I am seeking an update in this regard. The Government has continued to follow a policy - on which I did not agree with the previous Government either - of trusting AIB and Bank of Ireland to lend €3 billion each year to the business and SME sector. It is patently obvious that is not happening. Where is the national strategic bank, which was a good idea? It is necessary because I do not trust our two pillar banks. Is the national strategic bank plan still on the table? How regularly is the Government dealing with AIB and Bank of Ireland to ensure that they are hitting their lending targets for the economy?