Michael D'Arcy (Fine Gael)

I have a number of questions to ask. When we look back and wonder how we got to this place, it is clear that it is from the calamitous decisions made by the previous Government. I am sorry, Senator O'Brien, but there are no two ways about it. We see that the Sinn Féin policies are more akin to voodoo economics than any version of real economics. The Minister's time at the Department of Finance has been steady and sound, which is what the nation needed. We are in a European cycle that is difficult, although the level of debt is not as bad as it was two weeks ago in the debate on the Bill dealing with the European financial stability fund. European debt is €6.5 trillion and US debt is over €10 trillion and in both cases there is a ratio of 2:1 of publicly traded funds to privately traded Government funds and ECB and Government bonds. The question Europe is failing to answer is whether we are prepared to do what is required to take us out of this. It is not that difficult and other countries that are sound and that have a triple-A rating are capable of paying more. The question is whether they will. To date it has not been answered.

One crucial point is that we have friends in Europe again. For too long, we lost all our contacts and, following years of good diplomacy by various Governments and diplomats, we backed ourselves into a corner and were left exposed and isolated. We had no friends there and that was seen in the deal brought back by the previous Government. Fine Gael said it would renegotiate the deal and it has done so. We will continue to improve the circumstances, terms and conditions as we see fit from time to time.

I will not try to cover the ground covered by the Minister. I come across a number of issues at the coalface when dealing with constituents who are clients of banks. Banks are trying to force people, who are capable of paying interest only, from interest only payments. I realise that the interest only deal was put in place for a certain period but banks are now trying to force people into repaying interest and principal. If the banks force people into that payment regime, they will stop getting any money and people will default. People are not capable of paying the interest and principal, which amounts to a doubling of the interest payment. It is a mistake because, if people are capable of keeping their heads above water by making interest payments, the banks should be told that is the appropriate payment at this time. As market conditions improve and as the economy progresses, they can move towards interest and principal. However, making this mistake now will force people into default on payments.

Senator Darragh O'Brien touched on mortgage protection, which I spoke about before. I am dealing with a number of repossessions, which is not fun. I am dealing with the State-backed banks and the banks that are not backed by the State. The latter are prepared to negotiate a position with people who realise they have no further outlet other than handing back the keys of the property or allow the property to be repossessed through the courts. This category of banks is more reasonable to negotiate with. It is fair that, if a property is handed back, the remaining debt on the property should be written down. I have heard the Minister speak about this before and, according to the Blackrock stress tests, a figure was assigned for further recapitalisation of Irish pillar banks so that these amounts could be written down.

Anecdotal evidence is supported by the evidence of the witness from AIB who appeared before the Joint Committee on Finance, Public Expenditure and Reform who told us that in 2011, AIB had written off €600,000. The anecdotal evidence is that banks not backed by the State are writing off sums of money and treating it is as a non-recourse loan but the Irish pillar banks have taken the recapitalisation funds and they are not writing off amounts from mortgages. They are still trying to force people to retain the debt even though the House has been returned to the bank. It is unfair and unreasonable and I would like to hear the Minister's thoughts on this point. We must look at where we are going and we must be more clever in how we do things. The budget arithmetic is coming up in the next few weeks and it is a welcome improvement to reduce spending by some €3 billion. It is not a choice because it has been agreed with the Troika and that must continue.

The black market is booming, particularly in construction. Perhaps we should reduce VAT on labour to 0% and increase VAT on products so that, if someone buys a product, VAT must be paid. It is crucial that we do not raise income taxes. Middle Ireland is paying significant taxes and should not pay more income tax. Those who earn €37,500 pay tax at, in effect, 59% on every euro above that amount when income tax, levies, PRSI and other factors are calculated.

There is a great deal of talk about commercial rates at the moment. The commercial sector is being hit hard. Local authorities receive €1 billion in rates and, within one of the Finance Acts, there is the option to reduce rates by up to 10%. That would cost €100 million and I do not know exactly where the money should come from but the measure should be considered. Local authorities have shown that when the block grant is reduced, they are able to cut costs. However, if the block grant is not reduced but rates are reduced, the effect will be the same. The difference is that the commercial ratepayer receives the amount of the reduction.

The Ministers for Transport, Tourism and Sport and Arts, Heritage and the Gaeltacht appeared in the Chamber. Arts and sport are two vehicles by which we can get positive coverage for the country. We saw the benefit of President Obama's private visit and of the Queen's state visit. We can also see the benefit of a sports event happening in the country.

According to figures I saw, when Wembley hosted the Champions' League final, the city of London benefited by approximately £50 million. Croke Park in Dublin would be a wonderful facility in which to hold a Champions' League final at some stage in the future. The next available final is 2014. This would be of major benefit to the city and also to the State because of the increase in tax revenues. The GAA would benefit from the rent, and we would have a great opportunity to showcase ourselves in a similar way to the visits of President Obama and the Queen of England.