Liam Twomey (Fine Gael)

I have just come from the Institute of International and European Affairs, IIEA, which was packed to the rafters with people who had come to listen to the European Commissioner for Economic and Monetary Affairs, Mr. Olli Rehn. I am sure the Minister of State, Deputy Roche, is well aware that when European Commissioners came to the IIEA to make speeches or give lectures on previous occasions, the crowd could often be small and the room certainly was not packed to the rafters. What has Mr. Olli Rehn got that many other European Commissioners do not have that attracts such a fantastic crowd? That reflects on where we are now.

Many of the issues to which the Minister of State referred, including European stabilisation mechanisms, the changes to the European Government and the report of Mr. Van Rompuy, are for the future but we are very much in the present as far as the European Union is concerned. What has landed us in this serious position? There is a complete loss of confidence in the Government on the part of the people. There is a sense that we have been abandoned by international investors, and that is the reason interest rates on Irish bonds are exceeding 8%. The Government is too unstable to guarantee the passage of the budget, not to mind the four-year plan, and that is creating serious concern. Why is Mr. Rehn coming here? Is he here because the Minister for Finance, Deputy Brian Lenihan, is shirking his responsibilities in carrying through this measure or is the European Union exasperated with the carry-on of this Government in recent weeks?

I discussed this matter when we had an economic debate in this House during which I focused on an article in The Irish Times of 29 September by Mr. Olli Rehn in which he was asked a series of questions by a reporter from The Irish Times. That was a game-changing event. One would have to ask whether it was because the European Union was tired of the Government continually not giving the proper facts and figures to the people that it began to exert more control over what was happening in the Irish economy. If that is the case it is regrettable because up to 29 September the Government was still talking about a €3 billion adjustment in the budget in a few weeks from now and that somehow everything was fine in the Irish economy. That article by Mr. Olli Rehn was an eye-opener for many of us because he was saying there will be a need for serious adjustments in the budget and serious consideration for a four-year plan. What the European Union recognised was that this Government not only had a major crisis to deal with but that it had exacerbated that crisis in the past two years by some of the policy decisions it took in regard to banking and the overall running of the economy. It was failing to make the next necessary adjustments, the very measures the Minister spoke about, namely, controlling the Government deficit. It was subsequent to that article in The Irish Times that we were all asked to meet the officials in the Department of Finance and to meet Mr. Olli Rehn.

I would like to know who invited Mr. Olli Rehn to come here. The Minister said this morning that the Opposition invited Mr. Rehn to Ireland. I was not aware of Fine Gael requesting to meet Mr. Rehn. We were simply informed he was coming.

A serious issue arises in this regard, and it concerns our relationship with Europe. We must maintain that partnership with Europe and ensure the impression is not given that Europe is paternalistic towards Ireland or that Europe is coming here to tell the errant child what to do. The Minister might say that is nonsensical and that those of us in the political system and in the establishment who understand the relationship between Europe and Ireland know that is not the case, but the public could quickly come to the conclusion that Europe will dictate terms in a way that does not reflect a partnership role if we are not careful about the way we approach the problems we face right now. As a nation we have a strange relationship with Europe. We rejected the first Nice treaty referendum but changed our minds on the second. Much of that was based on the fact that we saw the gathering economic dark clouds over this country. We realise, to some degree, that we are dependent on Europe and that Europe has a strong role in our economy in more ways than one, but there is a growing concern that we must ensure the way we handle this relationship in the coming months and years gives the people cause for hope and confidence in Europe. That is very important.

In my meeting with Commissioner Rehn he emphasised that he is not here to dictate terms to the people but instead wants to work with them, but there is a sense that this Government does not know what is going on or what it is doing in regard to our economy. Further concerns have been expressed, and the Minister of State, Deputy Roche, would be well aware of them. One of the striking comments Commissioner Rehn made when he met us was that prior to coming to Ireland he had a meeting with the President of the European Central Bank, Mr. Trichet. The reason for that is that they continue to be concerned about the fragility of the Irish banking system, and the European Central Bank is the holder of the majority of Ireland's sovereign debt. I have no doubt Commissioner Almunia will be taking a further look at many of the problems in the Irish banking system. We need to have that debate in these Chambers and we need to be fully abreast of what is happening and what is going on between our Government and Europe to allow the people continue to believe they are part of a partnership with Europe, notwithstanding all the gross mistakes made by this Government in recent months.

There is a need to restore lost confidence in our economy. There is a need for a four-year plan to give some sort of confidence to the bond markets, although I do not know if that will work. Europe may have to play a stronger role in our economy next year. We must continue to provide incentives for the jobs market because it is only when we have a growth package and generate jobs in our economy that we will get out of this mess we are in, and we must prioritise any measures in the forthcoming budget that will have the minimum effect on economic growth because €6 billion, if that is the Government's final figure, will have a significant impact on both GDP and the potential for growth next year.

Ministers must be open with the people about what is happening right now between Europe and this Government. As I said, it is not about the relationship between the State and the European Union but the relationship between the people and the European Union. For the majority of that time it has been a partnership arrangement and we must ensure that continues and that the perception of the people is that Europe is good for this country.

We face serious economic issues. If we think they are serious now they will become more serious after Christmas and there is a significant need for the Government to be honest about its responsibilities in terms of causing this mess, how it will get us out of this mess and the way we handle our relationship with Europe in the years to come.