Kieran O'Donnell (Limerick East, Fine Gael)

I want to address a number of points made by the Minister. His speech was basically about policy and mine will be in the same vein. One must look at this matter in a number of ways. The property bubble was clearly caused by reckless lending from the banks but it was also associated with a lack of proper regulation of the banks. If regulation is not applied consistently, certain people in business will abuse the system.

With regard to the guarantee put in place, Professor Honohan stated it was too wide. There is no other compatible guarantee worldwide with such a level of spread. Anglo Irish Bank was clearly insolvent at the time of the guarantee. When the guarantee was being advocated, the Taoiseach, Deputy Brian Cowen, stated it was for €440 billion. He stated the assets in the banks were worth more than the liabilities and that we would not have to enforce the guarantee. We find today that between €48 billion and €52.8 billion will be going into the banks. This is an incredible figure. It is up to 32% of national wealth. This is the equivalent of our current expenditure on an annual basis. In respect of Anglo Irish Bank alone, €30 billion will be required. The Taoiseach said yesterday interest repayments would cost €1.5 billion per year at a rate of 5%. When put in context, this will result in the removal of home helps and special-needs staff and will have a considerable effect on education, which is important to the Green party and others. It has enormous implications for the ordinary person on the street.

The Government is trying to present today as a normal day. It is a momentous, black Thursday. It is a frightening day for the public, who see that AIB, the biggest bank in the State, is being nationalised. It is costing the taxpayer €10.4 billion.

When the guarantee was introduced, it was too wide. Professor Honohan has stated that. Once the guarantee was introduced, the Government had a two-year opportunity to sort out the banks.

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