Sean Barrett (Independent)

When I proposed the Fiscal Responsibility (Statement) Bill 2011 in December of last year, it received wide support in this House. The problem with the recent referendum is that it was an attempt to make a fiscal response to a monetary problem. As Senator Healy Eames and others have said, the design faults in the euro destroyed the banking system which we then bailed out. The report of the Comptroller and Auditor General shows 676 people borrowed €67 billion and took out 35,000 mortgages. Those are the numbers. I am afraid we will end up in another crisis because of the design faults in the euro. The single currency does not have an exit mechanism and does not cater for a scenario in which a large country such as Germany provides a tsunami of credit to a small country such as Ireland. In addition, members lose the power to use the exchange rate and interest rate as instruments of economic policy and banking regulation is lacking. The Government needs to strengthen its economic service to avoid making the same mistake again. Milton Friedman and other economists warned that we were joining a system that was bound to fail. We threw away the key when we did not provide for an exit mechanism.

Now that we have the results of the referendum, we must move on and become much more insistent and outspoken at eurozone meetings. If we have evidence from some of the best economists in the world that the euro is fatally flawed, let us not allow a series of countries to go bankrupt simply because people in Brussels do not want to admit their mistakes. Greece, Spain, Portugal and Ireland have already suffered and Italy and Cyprus are next in line. It would be ill advised of any eastern European country to join the euro at this stage. The United Kingdom, Sweden and Denmark were very wise to remain outside the currency.

I am dismayed to hear reports that delegates or Ministers met for a working dinner. There have been 18 summits. If one's bus does not arrive in the morning, one cannot use the excuse that the bus driver was having a working breakfast. We need to increase the level of economic expertise in the Government and in Brussels and Frankfurt. The 40% of the population who voted against the fiscal treaty in the referendum did so because the failures of the past have had terrible consequences for the unemployed and those on low incomes. Even the International Monetary Fund is concerned that the burden is not being spread fairly between, as it were, the haves and have-nots. Massive economic mistakes have caused such misery through unemployment, emigration and so forth that we must be certain that legislation coming before the House is properly costed and debated. The Seanad, with its 42 new Members, will ensure this is done but we must also ensure we do not sleepwalk into any other agreements that become impossible to adhere to.

We need to strengthen the economic advice available to the Government economic and improve our performance when we attend international meetings. We have experienced the biggest economic disaster ever to hit the State. Those who founded the State in 1922 and those who succeeded them until 1972 were parsimonious in their running of the public finances. While we made mistakes in the period from 1972 until 1987, we also learned lessons and reduced the national debt as a percentage of GDP to approximately 25%. We had too much faith in a badly designed single currency. As the former Commission President, Jacques Delors, has pointed out, the euro was not the currency he wanted. I fear other countries will get into trouble or Ireland will need a second bailout unless someone from Ireland brings the message to Brussels that we must address the design faults in the euro, which have had appalling consequences for wider society.

We need to strengthen the economic advice available to the Government economic and improve our performance when we attend international meetings. We have experienced the biggest economic disaster ever to hit the State. Those who founded the State in 1922 and those who succeeded them until 1972 were parsimonious in their running of the public finances. While we made mistakes in the period from 1972 until 1987, we also learned lessons and reduced the national debt as a percentage of GDP to approximately 25%. We had too much faith in a badly designed single currency. As the former Commission President, Jacques Delors, has pointed out, the euro was not the currency he wanted. I fear other countries will get into trouble or Ireland will need a second bailout unless someone from Ireland brings the message to Brussels that we must address the design faults in the euro, which have had appalling consequences for wider society.