Peter Mathews (Dublin South, Fine Gael)

This is a report card by the Government to the people who entered into an agreement to provide a working capital arrangement for Ireland over the next five or six years. Some of the points made by the Opposition this evening are understandable in so far as they are trying to grasp the situation without thinking it through fully. The straitjacket of the parameters of the template for this programme - a joint programme by the IMF, the EU and the ECB - is made out in such a way that we have to show discipline. We also have to show it for ourselves, as it is not just for others because we have to get the operational machinery of Ireland - the political, economic and social machinery - working again.

In early November, a G20 meeting was held in Seoul, on the other side of the globe. This was an important meeting because the finance Ministers present were concerned, most particularly the Europeans, that the exposure, referred to by Deputy McHugh earlier, of the ECB and our Central Bank as proxy for the ECB at more than €150 billion in total was perilously close to being uncollectible and could have been a serious fissure in the entire financial system. With regard to last weekend's conversation in the newspapers about whether the previous Government and the Minister for Finance knew what was the driving force behind the arrival of the troika, a close examination of the six Irish-owned financial institutions would have suggested the answer to that question and it remains the same. However, the new Government has a responsibility, and by virtue of a document such as this is fully accountable for the necessary corrections and reining in of what had got out of control.

The ECB has not done us any favours. Last week, Klaus Regling, who was a joint author of a report on what went wrong in our banking sector, in his address to the Institute of International and European Affairs confirmed that people in his country, namely, Germany, which has the largest population in the EU, did not understand that the bailout for Ireland is not a transfer of funds or a gift but a loan. This brings me to my next point, which is that it is a loan at an expensive rate of interest. Where I commend the Minister for Finance, the Taoiseach and the Government is that having been told "No" on their first presentation of a request some weeks ago immediately after the St. Patrick's weekend having just taken office, after 40 working days they acted wisely. This is like the first nine holes of a golf scorecard; one demonstrates one can keep within the operational parameters in the first nine holes and then one returns and re-opens discussions on two fronts. We now have a better picture of the true extent of losses in the banking sector. As the first step of what the Minister, Deputy Burton, stated will be a robust race and not a sprint we must ensure the figure for losses, which is the starting point, is in clear and sharp focus. As the first step, on 31 March, the outline was presented whereby we would regroup with a revitalised banking sector with new supervision, management, boards of directors, energies and competencies in place. This is all in the report card.

New capital has not yet been injected, and there are various ways of putting capital into businesses and banks. One is by direct injection and another is by writedown of creditor amounts, and this may be coming. It is already in the report card where it discusses liabilities management exercises for subordinated debt so we are on the right track. I am confident that with sharper and clearer focus and fuller measurement we will know at the end of the month what further loan losses are likely in the two banks being wound down, namely, Irish Nationwide Building Society and Anglo Irish Bank. We will have a better fix on this, and with that better fix we can present the losses to the counter parties in the troika, particularly the ECB, and state this is the full measurement and here is where we are, that our banks are indebted to it on the emergency funding basis at a level of, for example, €170 billion or €180 billion and that it is too much for the marathon ahead of us so let us discuss a resolution.

There is huge misunderstanding about default. Default is just a state of existence; it is not something one chooses from a panel of buttons. One arrives at default by going broke. It happens to households, businesses and countries. What is important is to be ahead of the curve and anticipate what is happening and likely to happen, measure it correctly and meet the people who will be part of the outcome prior to the outcome becoming harder to deal with.

I am confident we will do that because good and honest people from the Labour Party and the Fine Gael Party are sitting in Cabinet. Imagine what it would be like if one had to take over a business that was in a state of disarray with nobody willing to provide credit. That is not a nice thought. I invite each of the 166 Members of this House to collectively put their shoulders to the wheel rather than nitpick, particularly when the nitpicking comes from those who landed us in our current predicament. I remind Deputies that BlackRock Solutions prepared its report only after we entered Government.

Let us be courageous as a people and think in terms of values, responsibilities and accountability so that we fill in the second nine holes over the next year and get within striking distance of par. I am confident the Minister for Finance will be able to draw this simple picture for Mr. Trichet and others. There will be a resolution even if we do not achieve all the parameters we have set out for 2013. They are not set in cement because the IMF has a better understanding of our situation.

In regard to the interest rates, I am confident the Minister will be able to demonstrate that the EU portion of the funds provide a profit margin that amounts to almost 3%, which equals €1.3 billion per annum when translated into a full draw down of the facility. That is too much and it does not seem to capture the spirit of EU solidarity to charge a margin of €1.3 billion on top of the basic cost of providing funds. I am confident the Minister will address that issue. He comes from the solid foundation of being able to fill in the first nine holes. I use that as an analogy.

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