Brian Cowen (Laois-Offaly, Fianna Fail)

With regard to the guarantee scheme, this has been an evolving situation. I want to make it clear to the House that work on the scheme being carried out by officials of the Department of Finance, the Central Bank and the Financial Regulator is continuing with a view to finalising it as quickly as possible. The boards of the Irish Financial Services Regulatory Authority and the Central Bank discussed the scheme on Monday evening and they will feed their recommendations into the finalisation of the scheme. It is important to stress the need for discussion on the draft scheme later this week between the Irish authorities and the European Commission with regard to EU state aids and competition requirements.

As the Deputy will be aware, the Minister for Finance met the EU Commissioner for Competition on Monday evening to discuss the Government's approach and contacts are ongoing as the work proceeds. The issues discussed at the meeting between Commissioner Kroes and the Minister for Finance currently are being factored into the drafting of the scheme. A particular priority in this regard is to ensure the scheme appropriately addresses the issues of subsidiaries of overseas parents operating in Ireland with a substantial retail main street presence.

I assure the Deputy that it is a priority to ensure the scheme will be laid before the House as soon as possible. The Minister, Deputy Brian Lenihan, and the Commissioner both agreed it was important to take steps to guard against any undue distortions of financial flows and the Minister indicated that such concerns would be addressed through the implementing measures currently being drafted, which will provide for controls and quantitative balance sheet controls. This is the up to date position and it is important to point out that the breaking situation in the United Kingdom also must be factored into our considerations here.

I make the point that as the House passed the legislation last week on foot of the statement given by the Government on the morning in question, it was setting out its preparedness to stand behind the banking system and the six main banks in the State. Subsequently, in the course of discussions, both inside and outside this House, suggestions were made as to whether it would be possible to incorporate into the scheme other banks that were not on the list for reasons already outlined by the Minister. Consideration of this issue continues and important questions must be clarified and addressed in respect of wider group liabilities in the event of anything happening to a subsidiary here.

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