Seanad debates

Thursday, 22 September 2011

European Financial Stability Facility Bill and Euro Area Loan Facility (Amendment) Bill 2011: Committee and Remaining Stages.

 

Sections 1 to 3, inclusive, agreed to.

Schedules 1 and 2 agreed to.

Title agreed to.

Bill reported without amendment and received for final consideration.

Question proposed: "That the Bill do now pass."

1:00 pm

Photo of Darragh O'BrienDarragh O'Brien (Fianna Fail)
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I appreciate the Minister's response to the comments made. This has been a good debate. The legislation is necessary and I do not propose to delay the House further on it. There is a genuine desire on the part of all sides to ensure this country recovers as quickly as possible for the good of its citizens. This side of the House and my party will support these and other difficult measures. The months coming up to the budget will be difficult, but I hope that when it comes to dealing with the pre-budget outlook and the budget, the Opposition will be found to be a responsible opposition. It is important that our citizens see as unified an approach as possible. While we may argue about certain points of policy, we all know the direction we are going. There is confidence, and there should be, that we will come through our difficulties for the good of the generations that will follow us. This is one step in that regard.

We can do so much in this country, but I have one word of caution with regard to the response at European level. We would all like to see a more co-ordinated and robust response from Europe. I agree with comments made earlier by Senators Hayden and Barrett that in many instances we are not dealing with some of the fundamental problems. This Bill is a step in the right direction, but it will not be the last. The EFSM will be a more permanent mechanism. Hopefully, Europe and Ireland will learn from the mistakes of the past and be able to move forward so that we have stable European and Irish economies where job growth will return, people will be able to afford to pay their mortgages and bills and quality of life will be improved.

Photo of Sean BarrettSean Barrett (Independent)
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I echo Senator O'Brien's thanks to the Minister for his response to the issues raised. The term "eurosceptic" is an issue. There should be two definitions for that term. One should relate to being eurosceptic with regard to the currency - I am in that category - and the other to being eurosceptic with regard to the European Union. I am not in that category but we must distinguish between the two.

The Union operated successfully between 1955 and 1999 and it could go back to that. The definition still holds in Scandinavia and the UK. As everybody has said, we need to strengthen economic policymaking in this country. It is critical and the Ministers for Finance and Public Expenditure and Reform and their Minsters of State know they have the support of the House in doing that.

I refer to the retrieval of sovereignty. It is somewhat remarkable that for a county that spent so many years achieving sovereignty, it was all given away on 1 December last. As we pass the portraits of the great men who achieved independence for this country in the hall as we enter Leinster House, we must pay attention to that again. Ireland is damaged when people on this island transfer powers to Westminster in the case of Northern Ireland or to Brussels in the case of the Republic of Ireland. There are two kinds of unionists. I look askance at Northern Ireland Unionists for transferring powers to Westminster and European unionists here who transferred powers to Brussels unthinkingly.

Joining the currency with all its flaws while knowing the UK would not do so did nothing for Irish trade. EU member states only account for 31% of our trade, although we save on transactions. However, this precipitated a disastrous exercise in Ireland by German and French banks and today we are tidying up more of the mess while also dealing with the domestic banking collapse. Some thought should have been given to whether we wanted massive capital inflows used for speculation, financial intermediation and property prices. It was inevitable that a small economy such as ours would not be able to take that inflow of capital, even though people still utter clichés about how valuable is foreign direct investment. It is not if it goes to the wrong sectors. We conducted that experiment and the result has been a disaster.

One does not repeatedly conduct a science experiment and blow up the laboratory. Ireland will be a leader regarding fundamental reforms in how public business is conducted and public expenditure is appraised and in adopting a sensible approach to investment rather than a casino approach because we have suffered more than anyone else. That is why the public elected us. As the Minister for Education and Skills pointed out, the greatest ever change in any European democracy occurred in this year's general election. It demands that we invent a new style of governance, which will be superior to much of the problem the Minister of State has brought to our attention today.

Photo of Michael D'ArcyMichael D'Arcy (Fine Gael)
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It is positive that we have reached the conclusion of the debate. I agree with other Members that legislation should not be concluded in one day. It is difficult to complete analysis of Bills to ensure there are no loopholes in them. Our role is to scrutinise legislation. This has happened twice in the past week but I do not know if anything could have been done in the context of scheduling. I am glad the House is operating in a positive manner and I direct that view, in particular, to Senator O'Brien.

In response to Senator Barrett, one of the Government's primary objectives is to ensure we regain our financial sovereignty. We did not have more or less financial sovereignty going back generations than we have today when we were ruled by another nation. The people whose portraits are on the walls outside this House gained our financial sovereignty and they our nation's currency. We did not give away our financial sovereignty by deciding to participate in the euro in the same way as other countries. Ireland was one of the newest countries to join the euro. The euro model did not have structures in place for emergencies. That is what this legislation is about and there will be further legislation to ensure if there are difficulties, structures will be in place to ensure we go in the right direction.

Photo of Sean BarrettSean Barrett (Independent)
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That should include the ability to leave it.

Photo of Michael D'ArcyMichael D'Arcy (Fine Gael)
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Absolutely. I heard the discussion about an orderly exit. If that has to happen, legislation will be debated in the House and it will get a good hearing. I thank the Minister of State. I have been critical of the Department of Finance in the past but its officials have upped their game and I anticipate they will continue in that vein.

Photo of John GilroyJohn Gilroy (Labour)
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I thank the Minister of State for attending. I welcome the robust and interesting debate we had. I do not share Senator Barrett's analysis if I understand it correctly. It is a debate for another day but the notion that no country would welcome an inflow of capital should be rejected. That makes no sense and, therefore, I surely have misunderstood his argument.

This important legislation has been thoroughly debated, which is a good sign for the House.

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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I thank Members for their contributions. The ten-year bond spread for Greece earlier on the Bloomberg website was 22% while ours was 8.6%.

Photo of Michael D'ArcyMichael D'Arcy (Fine Gael)
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Down from 14%.

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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We have recovered a great deal of ground and we are getting it right. There is hope and change is happening. We are all united on the fundamentals, notwithstanding the differences between parties. We are getting our act together.

It is being increasingly recognised internationally that Ireland is different, that we are meeting our requirements and that the tough decisions that have been made and that will continue to be made are in the interests of our society. An article appeared on the website of The Wall Street Journal yesterday under the headline "Ireland achieving quiet success", which stated: "As the headlines of Greek tragedy and Italian farce continue, one solid national performance has been largely overlooked." That is ours and the article basically says we are getting our act together. If we can show we are different and can attract inward investment, we can restore competitiveness and create jobs. I acknowledge Senator Barrett referred to the building bubble and so on. I thank the officials from the Department of Finance who helped me in preparing for the debate.

Question put and agreed to.