Jim Walsh (Fianna Fail)

I welcome the Minister of State and the Bill he has introduced. It is unfortunate this Bill marks another small step when giant steps are needed to address Europe's economic problems. It has not reassured the markets and one wonders what ultimate policy initiatives will achieve that end. I spoke informally to someone earlier and I predict that it will happen in approximately 2020 when it will dawn on politicians over a prolonged period that these minor steps will not achieve the outcome they seek and we will have had a decade of stagnation at that stage. I do not say that lightly or with any degree of exaggeration. When all of this happened in 2008 it was unprecedented since the Wall Street collapse of 1929. Both the bureaucrats and politicians right across the globe, not just in Europe – the same could be applied in the United States – have failed to grasp the seriousness of the issues that face us.

I hold the Minister of State, Deputy Brian Hayes, in high regard but I am concerned about some of the decisions made by his more senior colleagues. I am a critic of the Department in which the Minister of State serves and in particular of the senior Minister. The previous budget was nothing short of disgraceful. It failed to grasp the seriousness of the issues. The soft options of cutting capital expenditure and increasing VAT by 2% were taken in preference to taking the fundamental decisions that needed to be taken in the economy. I do not just say it now. I said it when we were in government that our salary levels are far too high both in the public sector and in the private sector. Public sector salaries are in excess of private sector salaries. It was a serious mistake to have allowed it to happen. There has been no recognition of that. We must have an ongoing debate on cutting social welfare rates - it is not popular for politicians to say it and very few are willing to say it - and cutting public service salaries, from which I benefit myself. It is my only source of income, as is the case with many Members of the House.

Correspondingly, we must bring the cost of living in this country under control. I would have thought it would be a priority for the incoming Government to establish a new Department of competitiveness and consumer affairs. If we had done that we would have driven down excesses which occurred in many particular areas of the economy. We have often referred to the legal profession in this House and I will not chase after that chestnut now but it is an example of the abuse of privilege within our economic structures. Politicians of all hues seem to be afraid of tackling it.

Senator Barrett posed the interesting question, which if it was made two years ago, people would have scoffed at, but nobody is scoffing at it now, namely, whether the euro will survive, and if the European Union will survive. He asked what damage the collapse of the euro would do to the Single Market. We are at a crossroads. What we are doing is introducing a series of minor adjustments and meeting each crisis with the minimum required to prevent going over the precipice. When we had to borrow we were followed by Portugal and Greece. Subsequently, Spain has met with serious difficulty.

The ESM is interesting. It is a good initiative which has a significant difference for us to its predecessor in that countries in the bailout were not expected to subscribe to the fund from which we borrowed. That is a significant and substantial difference. This time we do contribute and the amount is in the order of €1.25 billion. The question is this: is €700 billion, of which only €500 billion can be lent, anywhere near adequate? I do not believe it is. The amount required by Spain alone, if it needs to be bailed out, will exceed that figure. When I expressed my opinion recently, one of the other Ministers said I must have read it in the Financial Times. It is true that I came across it in certain articles written by economists. I am no expert in the area, but from my own business experience, the one thing we need to do is to get ahead of the curve. The minimum required to get ahead of it - it might not even achieve this - is €2 trillion, or three times the amount planned for the ESM. The reason for not doing it is the imposition it would place on certain countries.

While I welcome the Bill, we need to do far more. Although the Minister has the support of my party, it is clear from contributions on all sides of the House that there needs to be a recognition within the Government and the European Council that unless we are to leave the European economy to stagnate and act as a drag on the global economy for at least a decade, much more significant measures need to be taken to tackle what is admittedly an unprecedented economic and financial crisis.