Eamon Gilmore (Dún Laoghaire, Labour)

Many people, at some stage in their lives, have been approached by a family member, friend or business colleague who has asked them to be guarantor for a bank loan. Most people would be cautious and reluctant to do that and would want a certain amount of basic information before going to the bank and signing a guarantee for somebody, no matter how close they are to the person. People would want to know how much they were guaranteeing, the conditions attached to it and a little about how the person for whom they were going guarantor would behave financially afterwards. They would certainly read the small print of the guarantee very closely.

This country is being asked to go guarantor for the banks and in effect we are being asked put up the deeds of the country as security in doing so. Today on Committee Stage we will go through the small print of what that guarantee amounts to. Several issues regarding the Bill presented yesterday and the small print are of very serious concern to the Labour Party. I want to highlight some of those and perhaps the Tánaiste will answer them.

How much are we being asked to guarantee? Figures floating around have ranged from €300 billion to €500 billion. When I asked the Taoiseach about it yesterday he suggested to the House that this would never be called in, that no payment would ever be required from the taxpayer for this guarantee. Yet, the Bill explicitly provides for payment and there is a Financial Resolution before the House that requires for payment from the Exchequer. What exactly are we being asked to guarantee? In the Bill there seems to be no limit.

What charge will the banks pay for this comfort with which they are being provided? We are told there will be a charge, but no charge is specified in the Bill. The charge applies only if the guarantee is called in. It is like having an insurance policy where one has to pay the premium only on the day one makes a claim. What is this charge and how will it apply? What are the exact conditions? In the Bill, we are being asked to sign up to the guarantee of which we will be told the conditions later. The Minister for Finance will introduce a scheme before the House and it will apply provided we do not annul it within 21 days. We need to have the conditions of this guarantee upfront and known to us before the Bill is passed and before it comes into effect.

We know that the top executives of the banks have been paying themselves in millions. Will any limits, restrictions or constraints be put on the continuing arrangements for top executive reward in the banks? These are among the issues addressed in a series of amendments to the Bill by the Labour Party. How the Government responds to those amendments will determine whether the Labour Party will support this Bill.

I want clear answers. I want to know how much we are being asked to guarantee, what the banks will pay for the comfort, whether we will see the exact conditions before the guarantee is signed and whether the Government will allow top executives of the banks to keep their fists in the till.

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