Pearse Doherty (Donegal South West, Sinn Fein) | Oireachtas source

Anybody following these proceedings would be of the view that the game-changer would have been experienced in people's lives and not out in the markets. All of us on this committee understand the crucial importance of our being able to be back into the markets at low interest rates, but the game-changer paraded by the Government at the end of June was that there would be a game-changer in people's lives in that we would get back the money we had put into these broken banks. That was the game-changer. It was spelt out by the former Tánaiste, Deputy Eamon Gilmore, and the Taoiseach, Deputy Enda Kenny. It was more cautiously suggested by the Minister when he made the point that it would have to be an asset transfer and when pushed on whether it would be the full quantum of money, that is, the €21 billion in the case of AIB or the current value, he was far more cautious and that is his position as Minister for Finance. However, he even he spoke about the quantum of money that was coming back to this State that would enable us do a number of things in terms of managing our debt interest, reducing our overall debt or freeing up money for investment.
That was then and now we are more focused on where we are going in terms of our banks and particularly this instrument. The Minister spoke about AIB not needing additional capital and that may well be the case. Hopefully it is when we see the results of the stress tests. I would not imagine that the idea of this retroactive recapitalisation instrument would be to look at AIB's position today in terms of the waterfall test. My impression is that what the board of governors of the ESM would do is turn back the clock to the point in time where the Irish State stepped in and capitalised the financial institution and then it would focus on that point in time and on the bank, which was in need of capitalisation, and say that if they were to apply the recapitalisation instrument that is available to us now, how would that apply to AIB, and if that is the case, is that the quantum of money that is on the table in and the quid pro quothere is the equivalent shares of the financial institution? Is that type of scenario we are looking at? What we have in terms of the guidelines is very sparse. We have outlined them and probably gone through a few times in terms of the rules and the modalities that will be made up in an application that will be spelt out at the decision of the ESM.