Enda Kenny (Mayo, Fine Gael)

The Minister for Finance is quoted in this morning's Financial Times as saying the failure of Anglo Irish Bank would "bring down" this country. I wish to make it clear that the failure of the Minister's banking policy and his catastrophic misjudgment throughout the banking crisis have put Ireland's economic future at risk. For the first time in its history, this country is unable to access the markets. If this happened in any other situation of government, there would be mass resignations. The figures unveiled by the Minister this morning are absolutely horrendous and appalling. It is beyond the scope of most ordinary people to comprehend them. It appears that up to €34 billion of State money will be put into Anglo Irish Bank and almost €5.5 billion will be put into Irish Nationwide. We are aware that €6.5 billion has been put into AIB and €3.5 billion has been put into Bank of Ireland so far. These are astronomical figures. The total losses will come to at least €40 billion. That figure does not include the potential losses associated with NAMA. The Minister is well aware that many external commentators with a strong record in predicting banking losses have suggested that NAMA might lose up to €15 billion.

While those figures are shocking, some other figures are even more shocking. There are 450,000 people on the live register. Some 200,000 jobs have been lost since the introduction of the bank guarantee. By April of next year, 100,000 people will have emigrated. Some 2,500 people have their electricity supplies cut off each month. Approximately 200,000 mortgages are in negative equity. Does the Government not understand the emotional and economic pressures being faced by families throughout the country? The problems of the Ireland of 2010 have been caused by the political failure to see what was happening and to drive the country as we would want, with growth and with prudence. It is catastrophic that the Government has allowed a relatively small number of people to drive this country to the edge of an economic abyss. Nobody has paid the penalty under the law of the land. As I said this morning, a man who was unable to pay a fine of €250 was sentenced to 14 days of imprisonment in Mountjoy Prison and will have a criminal record for the rest of his life.

Many words, including "failed", "incompetent", "arrogant" and "wrong", could be used to describe the approach of the Minister for Finance to the banking crisis. Just one word - "unfair" - really captures the essence of what the Minister and his Government colleagues have done, however. Over the last two years, they had a clear choice between protecting the people of the country and bailing out reckless investors and even more reckless bankers. On every occasion, they chose to put the bankers before the people. Fine Gael would have handled things very differently if it had been in government during that time. Our policy has been very clear from the beginning of this crisis. We argued that Anglo Irish Bank could not survive as a commercial entity and needed to be wound down. After more than a year of denying reality, the Minister, Deputy Brian Lenihan, has finally acknowledged the inevitable by starting to wind the bank down. It is too late, as usual. It was suggested in this House that such a decision could not be taken under any circumstances because it would be catastrophic. Fine Gael's analysis of what should be done to deal with the Anglo Irish Bank crisis has been proven right.

Fine Gael also argued that even if NAMA were established, the Irish banks would not lend and would not be in a position to lend. We proposed the creation of a national recovery bank to make sure small and medium sized enterprises get the credit they desperately need. This was rubbished by the Minister for Finance and his Government colleagues. The Minister told the people of Ireland that the establishment of NAMA would unleash a wave of credit - it was described as a "wall of cash". Where is that wall of cash? Where is the wave of credit? We all know the answer - it never happened. Under the Government's failed banking strategy, it can never happen. What would the Minister say to the businessman who told me the other day that although his business has a turnover of over €1 million, the bank offered him an overdraft of €5,000? One cannot run a sweetshop in that situation.

Above all, Fine Gael argues that it was completely unfair for the Irish people to have to shoulder all of the losses of the banking catastrophe . It was only fair that the people who had lent recklessly to the banks should also share in the pain. What we were arguing for is nothing very revolutionary, it is a basic rule of capitalism; if one lends recklessly to failed institutions one must take the consequences.

However, the Minister for Finance and the Government decided instead that they were going to nationalise the losses of the banking system and make the people of the country pay the price for the mistakes of others. That is what they have done and that is what has crushed the spirit of thousands of our people, caused them uncertainty, disillusionment, anxiety and fear, and left a generation of young people considering their futures, many of whom have now left for the United States, Australia and other foreign climes. This is the sad consequence of a failed banking strategy by a Government that was unable to see the way ahead and find appropriate solutions.

The Government and the Minister of the Finance trotted out the big lie that there was no alternative. They and the bankers told the people that if they applied these simple rules of capitalism the international markets would desert us; that the only way to keep open these markets was for the Irish people to pump billions of their money into a failed banking system. Even on his own terms the Minister for Finance has completely failed in this regard. The markets he wanted to keep open are now closed to Ireland and the bondholders he tried so hard to please have turned their backs on Ireland. That is why, as Deputy Noonan pointed out, the country's bond auctions have been cancelled. The Government knows full well that if they were held the sovereign would either fail to raise the money or the interest rates we would have to pay would be extortionate. That is the consequence of poor political judgment in dealing with the options that were presented. It is the Minister for Finance and his policies that have closed the markets to Ireland; our policies - the Fine Gael policy - would have kept them open.

The very least the Irish people deserve from the Government, and from the Taoiseach and the Minister for Finance in particular, is that they should apologise for their actions, for their incompetence and unfairness and for their complete lack of understanding about how financial markets actually work. Instead they are still trying to run for cover. I heard the radio interview with the Minister for Finance this morning. He got annoyed when the interviewer reminded the listeners of his statement that the bank guarantee was the cheapest bailout in the world. He told her that was not accurate and that what he had actually said was that it was the cheapest bailout in the world so far. A fine lawyer's distinction.

What the Minister said almost two years ago was that the bailout of Anglo Irish Bank would cost €1.5 billion; he did not then add the words "so far". What he said subsequently was that the bailout would cost €2.5 billion, then €8 billion, then €16 billion, €24 billion and now €34 billion. Did he add the words "so far"? He did not. I also heard him claim today that the cost of the bailout to Ireland is only the extra interest that we now have to pay on the banking debt. That is nonsense.

Let me spell out the full cost of the banking bailout. It will be more than €2 billion every year in direct interest costs; sovereign interest rates at a record high and the financial markets now closed to Ireland; a banking system that is still in crisis and cannot access international funds, as a result of which small and medium businesses will remain starved of credit because banks are unable to fund themselves and therefore unable to lend; and a budget that will inflict massive pain on the Irish people as the Government again tries desperately to regain the confidence of the markets.

Let us be very clear about this. Every penny of spending cut by the Government, every penny of taxes raised above €3 billion in the next budget will be the direct result of a failed baking strategy. The markets have lost confidence in the banking strategy of the Minister for Finance, but they have also lost confidence in his economic strategy. Any small credibility he might have had left with the markets was destroyed last week when the Government produced its so-called "jobs strategy". It says a lot about this Government and how out of touch with reality it is that it thinks getting a series of State agencies to issue jobs targets amounts to a jobs strategy. They actually believe that 300,000 jobs can be created without any change in policy or without any additional money. What nonsense.

Fine Gael has produced a real jobs strategy called "New ERA"; 100,000 jobs can be created through an investment by the profitable semi-State companies and the sale of non-strategic State assets. That is a real jobs strategy, identified by the Minister for Finance as being a discussion document of real worth and identified by a Minister of State at the Department of Finance as being a worthwhile document. However, it will not be accepted by the Government because its tribal tendencies do not allow it to accept any quality proposal from anybody outside its own ranks.

The Government's "write whatever cheques" policy for banks has destroyed confidence in our public finances. That is why the Government has been forced out of the sovereign debt markets. That is why the Minister for Finance now says that we may need even greater spending cuts than previously thought. When one considers how €40 billion borrowed over the next five to ten years could have been invested to boost confidence in Ireland's long-term prospects, pouring it down the drain of two dead banks is, quite simply, an outrage on the Irish people by bad Government. Our banking and economic crisis is one whose origin lies in catastrophic policy mistakes. It is the legacy of the "when we have it we spend it" approach to managing the economy of the Taoiseach, Deputy Brian Cowen, when he was Minister for Finance and of his policy of blank cheques for zombie banks over the past two years.

The Fine Gael view is very simple; we can only beat this crisis and emerge from it if we have the courage to create a new future by changing our public services, restoring competitiveness and investing ambitiously in the arteries of the economy that drive recovery. Instead, the Government is pursuing a strategy which will leave Irish society, and the people who comprise it, deeply scarred by this recession. No matter how often the Taoiseach repeats it, writing whatever cheques are necessary to bail out delinquent banks and finding the softest targets to cut the budget deficit is not a formula for economic recovery. It is a strategy trapped in a cramped and out of touch view of the world. Many of its so-called "cures" are actually killing the patient. It is not doing anything to alter our course, change the underlying dynamic or redesign the dysfunctional system that is grinding down even the best of our people. Go into anyone's premises and talk to people in their offices and they will tell one how the State is crushing their initiative and enterprise. Some people continue to work hard and do reasonably well despite the pressure and intervention of the State and despite the fact that they operate against a background of catastrophic economic and political Government that has been there too long.

The Government strategy will not work because at its core it is about battening down the hatches and pulling up the ladder behind those who are already on the inside. It locks out those who have yet to get a foothold on the economic ladder and there is no help or encouragement to tap in to the motivation of so many people who want to help this country and who have a part to play, who want to take on new workers, who want to increase their business and who want to get back into exports. It is all waffle and loose talk. There is no concentration or real focus on making a real impact in that area.

It is the new generation which is being abandoned by Government, when it nurses along crippled loans from a reckless past instead of providing credit to the people who can build a successful future and when it slashing investment at a time when the arteries for our economic success are choked for the want of improvements. It is about Government banning new recruits from joining our public service, but doing nothing to reform the bloated structure of politics and of government, identified even in this Chamber on a constant basis. It is about Government cutting the pay of low-paid public servants, but finding a way to exempt the 655 top earners in what was a most unfair decision. It is about Government cutting social welfare payments, but doing nothing to reform the features of our welfare system that trap people in poverty. What does it do for young talent who cannot get credit, who cannot get jobs, whose potential is wasted and whose spirit is crushed, their disillusionment exacerbated? It offers them a series of closed doors and bleak prospects - a passport to another country. That is the catastrophic misjudgment of what is necessary for economic recovery in our country. That is what the Government does to people. That is where the Government is wrong. That is where the people will reward it when they get the chance, by throwing it out.

In November, the Government plans to unveil a multi-year fiscal strategy in an effort to convince the markets that it really has a plan for this country that will work. These multi-plans are in the area of banking, of fiscal policy and of growth policy. The problem for the Taoiseach and his Government now is this. How, in heaven's name, could the markets have any confidence in a multi-year strategy from a Government that will not survive beyond a few more months? Is not the truth very simple here? Neither the markets nor the people of the country, whose trust you have used and abused, can have any confidence in a Government that has run out of energy, ideas and credibility. What this country needs is a clear agenda, a clear pathway to the future. It needs a strong Government with a clear mandate from the people of Ireland. In that context, what this country needs is a general election.

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