Eamon Gilmore (Dún Laoghaire, Labour)

The meeting of the European Council on 15 and 16 October last considered the great challenges facing the European Union's leadership. The intended focus of the meeting, the Union's energy and climate change programme, was superseded by the crisis in the international financial system. One of the notable aspects of the current crisis has been the leadership displayed by the EU, the European Central Bank and the European Presidency. They have taken decisive action to try to stabilise the European and global economies. The creation of a financial crisis cell should enable swift action to be taken to deal with any future crisis faced by a member state. It is another example of the importance of clear lines of communication and decision-making within the EU. I join Deputy Kenny in commending the leadership of the French Presidency during a time of unprecedented turmoil in the global markets and great uncertainty across the banking system. President Sarkozy took decisive action to ensure solidarity among European leaders in the face of the banking crisis. It is significant that he co-ordinated the eurozone countries on 12 October to support the banking sector.

The Taoiseach and the Minister for Foreign Affairs should note the various recommendations of the European Council. The Council has emphasised the need for reciprocity between the banking sector and the member states guaranteeing it. The Council considers that measures to support financial institutions in difficulty should accompany measures to protect taxpayers, in the interests of securing accountability on the part of executives and shareholders. That recommendation contrasts with the blanket guarantee that was hastily given by the Irish Government to the Irish banks. That guarantee contains precious little to protect taxpayers or secure such accountability. Irish taxpayers are carrying the risk for €500 billion, at a relatively small cost to the banks.

The Council has emphasised the need for bank executives' bonuses to reflect their contribution to the long-term success of the company and the need to control excessive risk-taking. In Britain, several chief executives of banks bailed out by the Government there have been required to step down. Gordon Brown has made it clear that the days of excessive bonuses in the banking sector are over. In France, President Sarkozy has told businesses to rein in chief executive pay and unwarranted golden parachutes. By contrast, the Government here has repeatedly refused the Labour Party's request that chief executive salaries in the guaranteed banks be capped and that the people who have exposed the banking sector here to serious risk be held accountable for their actions. Member states are required to report to the Council, by the end of the year, the decisions they have taken to link executive pay to the real performance of a company and curb risky behaviour by banking executives. I am interested to hear what the Taoiseach and the Minister for Finance will tell their European colleagues in December. The Council has pointed out that the maintenance of confidence in the financial and banking system requires rigorous implementation by financial institutions of recommendations on the transparency of their commitments and risks. Can the Taoiseach explain to the House, in transparent terms, exactly where the Irish banks have committed themselves and how much risk they are carrying? Indeed, the Taoiseach might take this opportunity to clarify an issue that was raised earlier by Deputy Rabbitte.

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