Leo Varadkar (Dublin West, Fine Gael)

I wish to share my time with Deputy Perry. I am grateful for the opportunity to address the House on this important issue. As Members will be aware, Fine Gael supports the guarantee, which is a necessary response to the liquidity crisis. However, it appears that there is more than a liquidity crisis at issue here. There is also a capital crisis, an issue to which I will return later. I welcome the fact that there will be Government representatives or observers on the boards of the various financial institutions, although I share the concerns of Deputies O'Donnell and Bruton regarding the mandate of those observers and to whom they will be answerable.

I wish express my disappointment that the Government is allowing the banks to get off so easily in terms of the levy that is being charged. Essentially the guarantee is an insurance policy for the banks. At a commercial rate, one would expect to get approximately €1.5 billion per year from the banks for this guarantee based on 0.5% for wholesale and 0.25% for retail deposits. Initially, when the Minister came before the House he told us there would be a commercial price for the guarantee. However, this seems to have been reneged upon. The banks will get it for one third of what it is worth and this is wrong.

Essentially, €1 billion of the cuts or tax increases announced on budget day would not have been necessary had the Minister not put the interests of the banks ahead of the interests of middle-class taxpayers, the poor and the old. In many ways, this shows where the Government stands. The Minister for Finance does not work for us or the people; he works for the bankers and this is very sad. If the banks cannot pay the €1.5 billion, which may well be the case if they suffer significant losses during the year, the difference could have been made up by the State taking preference shares in the banks. However, this has not been done.

There is no provision in the scheme to require that credit is extended to small businesses and individuals which is unfortunate. I share the concerns of Deputy Higgins with regard to the lack of accountability. Deputy Conor Lenihan stated that an apology from the bankers would not be worth anything. It would be worth a great deal, as would humility. In the United Kingdom, the chairman and the CEO of the Royal Bank of Scotland both lost their heads, partially at the instigation of Gordon Brown. In the United States, the chairman of Lehman Brothers was brought before a committee and grilled and humiliated by the politicians there.

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