Arthur Morgan (Louth, Sinn Fein)

Projecting the cost of the Anglo Irish Bank bailout as €29.3 billion is completely sly when admitting in the same breath that the final cost will most likely rise to €34.3 billion, in the event of further losses. We have been told that the €34.3 billion figure is a worst-case scenario, but we must remember that all aspects of the Government's banking strategy have been the worst case scenario up to now. When the Minister for Finance told us two years ago that the worst was over, the worst had not even begun. When, according to the Minister, the worst was over, the cost of the overall bank bailout of nearly €50 billion had not even surfaced. When the Minister first proposed nationalising Anglo Irish Bank in January 2009, he estimated that it would cost €4.5 billion. Government policy is like watching economics for slow learners. It takes it years to decide anything and when it does, it is the most costly and worst option.

Concerns about the Government's ability to pay for the banking bailouts have pushed Irish State borrowing costs to record levels. Because of the financial impact of the guarantee, the borrowing and the recapitalisation of the banks, Ireland's debt is now being serviced at a record Irish and EU high of 6.8%.

The prospect of the Government taking a majority shareholding and control of AIB is now inevitable and has been since the outset of this crisis. AIB should have been nationalised two years ago, as advocated by Sinn Féin. Such swift and decisive action two years ago would have dealt with credit streams to SMEs and households, and it would have stabilised the banking sector.

The impact this bailout will have on the Irish deficit is enormous. The Government's goal to come back within the terms of the Stability and Growth Pact by 2014 has been blown out of the water. Today's estimates will mean the Government has less money to spend and will have to introduce an even tougher budget in December. Almost every cut that is being made is to fund the Government's failed banking policy. Where will the growth come from to bridge the chasm between what the Government is spending on the banks and what it is taking in? The bill for this bailout will bankrupt the State. The reality is that Ireland is bust and faces a potential Greek-style crisis.

Bondholders lent private money to private banks, not to the State. They did not lend the money for infrastructural investment or to create jobs; they lent their money for a high return. The Government warns that cutting Anglo Irish Bank's bondholders would kill demand for Irish sovereign debt. The opposite is true as record-high sovereign spreads show. The open-ended exposure to private liabilities across the banking system drives up sovereign yields. While the State continues to promise it will fund Anglo Irish Bank's bondholders, the prognosis for financial institutions and the State's own sovereign debt remains uncertain.

Why should we socialise the losses of the financial sector? Why should we inflict pain on our people for the failings of capitalism, liberal markets and unbelievably greedy bankers and speculators? It is demanded of us that the economy be hamstrung by pay cuts, job losses and privatisation while servicing an increased level of debt. Reducing incomes while increasing sovereign debt only raises the risk of default, hence yields will continue to rise. A crucial, yet widely ignored point from Standard & Poor's when downgrading Irish debt is that the austerity measures have depressed activity and tax revenues. This slash-and-burn approach does not work and only increases the budget deficits and the interest rates on Government debt.

No matter what language the Government tries to hide behind, the taxpayer still has to pay for the Anglo Irish Bank debacle. Public funds are being pumped into these banks while public services and welfare are ruthlessly cut to try to bridge the gap in the public finances. Our Government's banking policy makes the mistakes in Iceland look tame.

Feeding the opportunistic bank bondholders is killing economies in trouble. If an economy does not grow but tries to pay back huge debts, it will turn into a debt-servicing agency which hollows out the productive marrow of society. The Government has placed international bondholders above every man, woman and child in this State, on this, the worst day for our economy in history. Black Thursday is as good a name as any to attribute to it.

The Government's credibility is contaminated by the banks. Our banking system is crippled and having a serious impact on our sovereign debt. The markets want growth; anything that strangles growth scares them. The State's sovereign debt has become tied to our banking institutions. The most recent increases in interest rates on Irish State bonds were directly linked to the uncertainty surrounding Anglo Irish Bank and Ireland's ability to pay for the bank's debts.

Ireland will fill economics books of the future with tales of pathetic and, in many cases, corrupt economic management. Those who run our country recklessly fuelled the boom with disastrous consequences. Now, in the bust, they are making things considerably worse. The problem for us is that the very people who did not see the bust coming and cheer-led the country over a cliff are still in power.

In advance of the 2007 general election, Fianna Fáil told the electorate the economy was fine and built on solid foundations when clearly it was not. Today Fianna Fáil, and especially the Taoiseach, Deputy Brian Cowen, lies to the public when it claims nobody warned of the pending economic crisis. This is to hide its culpability in the financial and banking crisis faced by the State.

The bill for the bank bailouts has escalated to €50 billion. The Government has done more to ruin this State's future in one day than any other single body, institution or group ever did. We are being deliberately sabotaged by a Government that also has the neck to defend arrogantly what it has brought down upon the people of this State for generations. This was a home-grown crisis, fuelled by the culture of greed and corruption of successive Fianna Fáil Governments. It was the dismantling of regulation by the Government, coupled with its pro real-estate policies, that brought this financial and banking crisis to fruition.

Today, Sinn Féin tabled a motion of no confidence in the Minister for Finance, the very Minister entrusted with the financial security of the State, who has led Ireland on a trajectory of perpetual debt for generations to come and who will savage public services for the people of the State in next December's budget.

The motion reads:

That Dáil Éireann, expressing its serious concerns about revelations in RTE "Freefall" documentary on Monday, 6 September 2010 that Bank of Ireland chairman, Richard Burrows, and chief executive, Brian Goggin, were informed by Anglo Irish Bank chairman, Seán FitzPatrick, and chief executive, David Drumm, that Anglo Irish Bank was insolvent and requested a takeover of the bank;

noting that immediately following this meeting Bank of Ireland management then contacted AIB and both banks immediately sought a meeting with the Minster for Finance, Deputy Brian Lenihan;

further noting that following these meetings the Minister introduced the Credit Institutions (Financial Support) Bill 2008, the bank guarantee on 30 September 2008 claiming in the Dáil that the purpose of the guarantee was to deal with liquidity or cash flow issues within the Irish banking system;

deplores the fact that the reality of the situation in Anglo Irish Bank was not revealed to the Dáil by the Minister before the passing of the guarantee;

noting that due to the financial impact of the guarantee and the subsequent borrowing and the recapitalization of the banks that the State's debt is now being serviced at a record Irish and EU high of 6.8%;

noting that the estimated cost of the Government's banking policy has continued to spiral out of control;

noting that new estimates for the capital and recapitalisation costs of Anglo Irish Bank will reach €34.3 billion and that the total cost of the bank bailout will reach €49.3 billion

has no confidence in the Minister for Finance, Deputy Brian Lenihan.

I note Deputy Noonan's similar sentiments earlier. I invite the Deputy and the Fine Gael Party to consider giving some of their parliamentary time to allow this motion of no confidence to be tabled so we can expose the gross mismanagement of the State's finances.

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