Feargal Quinn (Independent)

I became chairman of Eurocommerce, based in Brussels, in 2006 and held the post for three years. That meant I spent much time not just in Brussels but in each of the other 26 member states as well. The respect for Ireland in 2006 was significant and everybody told us how well we were running the economy and what a success we had been. People noted our achievements. By 2009 and 2010, we found ourselves at the other end of the spectrum and people asked how we got it so wrong. We must return to where we were, and we can do so.

I am reminded of a comment from my father when I started in business in 1960. He told me a person's good name is very important and that I should always pay my debts so as not to get a bad name for unpaid debts. That is why I believe Ireland has taken the right steps, in spite of a costly impact on our economy and all the austerity. It is far better that we realise that our good name is more important than the alternative. I can see the number of people in Europe and around the world who are gaining respect for Ireland in spite of the significant cost to its people. I support the austerity movement and that we are paying our debts, although we are being criticised very severely for it.

The problem is that austerity will not return wealth to us and we must hope that confidence will return to the European economy. To a large extent, this is a psychological crisis. It was interesting to hear a senior EU official quoted as stating:

It is a matter of confidence. The consumer has abdicated. When you keep hearing talk of Greek default and the end of the euro, you will save your money rather than spend it.

We cannot go on running up massive sovereign debt, which has been part of our system. Professor Philip Lane argues:

The accumulated evidence of the past 30 years is that many governments have suffered from a debt crisis. The electoral cycle means a government may prefer to boost short-term popularity by raising spending or cutting taxes rather than maintaining a low debt level, and such a myopic approach can go on for a long time as the full cost of a high debt level is only revealed during crisis points which happen very rarely.

Governments are also forced to spend surpluses during boom times, and we are well aware of the position here. The public demanded tax cuts during the good years and the minimum wage and social welfare were increased. We became very generous to citizens because we could afford it. Senator Barrett spoke yesterday about the fact that we do not have many economists in the Department of Finance, and very little economic analysis was done, or none at all. It should be said that a former Minister, Charlie McCreevy, had some foresight in creating the National Pensions Reserve Fund, and more structures like it should have been put in place. Those of us who were in these Houses at the time must take the blame, and although we recognised what the Minister was doing, we now recognise it was not enough. The new fiscal governance in the European Union will, I hope, solve such major problems.

Other countries learn from experience. Sweden's good performance during the euro crisis has been partly credited to its fiscal law, which was introduced after its banking crisis in the 1990s. It is almost good to have a crisis as the countries behave afterwards, and I hope we will behave in future.

Despite this, all is not clear when we consider what other countries are doing. An interesting development has taken place in Spain, where the prime minister told the EU to forget the budget deficit target agreed to by Spain this year. Rather than a 4.4% of GDP deficit, it would aim for a significantly looser 5.8% of GDP target. He made this statement within minutes of agreeing to the previous target and argued it was done to give Spain more breathing space and put money into initiatives like job creation. Is it fair that rules are in place and can be ignored? We do not have the same economic sovereignty but do the actions of Spain show that we could push the EU to allow us do the same? I hope the negotiations, led by the Minister for Finance, Deputy Noonan, on the restructuring of banking debts will be successful. That would mean the burden of losses - the mortgages - could be lifted from some of the banks.

With mortgage debt rising, we must have some sort of debt relief in place sooner or later. That is a coming issue and it will be addressed to a fuller extent in the immediate future. The referendum could have a major effect on our return to the financial markets and we must do everything to regain our sovereignty. We must help Greece as part of the EU. What many people forget is that we are seen as the most successful of the countries to manage our way through crisis. If we reject the new rules, we may require a new bailout and we would not receive assistance under the European Stability Mechanism, ESM.

Last Monday, the Estonian ombudsman asked the country's top court to decide if a special voting procedure within the new permanent eurozone bailout fund, the ESM, is in line with the Estonian constitution. The argument is that the emergency voting procedure favoured big countries and jeopardises the principle of parliamentary democracy. I do not know if there will be a problem but it is interesting to consider how this fits in with the supposed equal status of EU membership.

This may be the first time I have spoken in the Chamber without a Minister present and I am not sure what happened today.