BORROWING:IRELAND'S NATIONAL debt should be allowed to nearly double over the next four years in order to pay for spending on schools, telecommunications and other State infrastructure to kick-start the economy, the Labour leader, Eamon Gilmore, has declared.
"In the short term borrowing will have to rise, but our national debt is low and can take the strain. That's what the Organisation for Economic Co-operation and Development recommended," he told the Labour Party conference on Saturday night.
However, Mr Gilmore emphasised: "Borrowing must be prudent - used only for investment that demonstrates real return in the future. And Government should set a borrowing ceiling - a limit that must not be crossed."
The national debt currently stands at just under €49 billion, or 36 per cent of gross domestic product. Responding to questions yesterday, the Labour leader set the target at 60 per cent of gross domestic product, limit laid down under the European Union Maastricht Treaty.
In the short term, however, the Labour leader favoured a more modest €2 billion stimulus package to build schools, to fund a national insulation scheme for one million homes, and to create a nationally available high-speed broadband network.
Meanwhile, Mr Gilmore said the State and Irish taxpayers should be the ones to invest first in the country's banks to recapitalise them, before the Government backs investments by foreign venture capitalists.
However, he said banks, which already enjoy a State guarantee on their borrowings, should introduce an immediate two-year ban on house repossessions from people who are unable to meet their mortgage payments.
"If the taxpayer can go guarantor for the banks, then we must have a guarantee for families. A guarantee that, for the duration of this recession, no family will lose their home. If we can bail out the bankers and protect the property developers, then for two years at least, foreclosure and repossession should be off limits," he said.
Careful to strike a hopeful note in his speech, Mr Gilmore urged the public not to despair and to believe that the country can emerge stronger from the recession if the right economic decisions are taken now by the Government. "I am not here to tell you how bad things are, or that they might even get worse. I want to talk with you about how things can get better. There is a way out of these tough times. There is a way to save jobs and to get business moving again; a way to get people back to work; a way to reboot and stimulate the economy.
"We are in a recession. And for many, that is a new and frightening experience! But there is one thing we know for sure about recessions. They always come to an end. Or to be more accurate, they are brought to an end: by the actions of good government, by wise political leadership, but above all, by bold and imaginative new thinking," he declared.
"One thing we cannot do, is go on as we have before. The people and the ideas that brought us here have no answers now. The era of Thatcher, and Reagan and Bush, must join the Progressive Democrats in the dustbin of history," said the Labour leader.
