Eamon Gilmore (Dún Laoghaire, Labour)

I want to return to the serious state of the economy and to focus in particular on the role of the banks in the economy at present. When the Irish economy was booming, the banks were in the driving seat. One could get a loan for anything and they were pushing money at people. However, now that the economic circumstances have changed somewhat, the tune of the banks has also changed and it appears they are now behaving in a way that may add to our economic difficulties.

I am hearing from businesses, big and small, that when loan review dates come up, the banks are in to reduce the facility, change the terms, add on extra charges and increase interest rates without waiting for the changes made by the European Central Bank. Businesses starting up anew or which are expanding find that, in effect, the banks are now closed to new businesses. In the new economic circumstances in which we find ourselves, it appears the banks are squeezing the life out of many businesses in this country and putting jobs at risk.

I do not expect the banks to act in a way that is not commercial or not responsible to their shareholders. However, they could apply their credit policies in a more measured and sensitive way in the new circumstances in which we find ourselves. I would have thought it must be in the banks' own long-term interest to ensure the Irish economy gets through the more difficult times it is now in. The banks need to look at the wider picture rather than just their own quarterly returns.

Has the Taoiseach had discussions with the major banking organisations in this country with a view to getting them to look at the bigger economic picture and behave in a more measured, responsible and sensitive way at this time? The Taoiseach has been good to the banks. I recall that in the 2005 budget, for example, he abolished the bank levy, which at the time was worth approximately €103 million per year of a benefit to the banks. The banks did very well when the Irish economy was doing well. They made huge profits, and the four larger banking groups made most of their profits here in the Irish economy.

Will the Taoiseach exercise leadership with regard to the banks? Will he call in the major banking organisations, have a discussion with them and persuade them to act in a more measured, reasonable and sensitive way with Irish business at this very difficult time? In this way, the banks and their lending and credit policies could be made to become part of the solution to our economic difficulties rather than adding to the problem, as, frankly, they are doing at present.

See this speech in context