Brian Cowen (Laois-Offaly, Fianna Fail)

First, I will answer the Deputy on the economy. It is not true to say — nor did the Minister for Finance say despite the Deputy's attempts to portray him as so saying — that people were unaware of the overall state of the international economy until this June. The Minister was referring to the mid-term Exchequer returns. On the emergence of these returns, the Government took action to ensure that expenditure would come in on target this year, as it has in broad measure. The full year effect of the cuts that were outlined will mean a saving of €1 billion in 2009. While the Government brought forward its budget to close the gap again, there has been a deterioration in the public finance position since then. I stated that any programme of Government is subject to the health of the public finances. There always is such a paragraph that must inform any programme for Government as to how one can implement the priorities one identifies. That was simply the point I was making in this regard.

The Government's present position is that in the context of trying to give an impression of what the direction of the economy should be in the years ahead, it will set out a framework about economic renewal, which must involve social partnership participation. That is my response. We must involve social partners in ensuring the gap which has emerged on foot of reduced tax revenues of €8 billion this year will be addressed. If we are to set up a credible timeframe in which it can be addressed, when set against the expenditure items on our books, we must work out together, in a collaborative way, how to bring back health to the public finance position. I speak as someone who believes in social partnership. Others believe it should be done in some other fashion but this is how I believe it should be done. I am sticking by that methodology because I believe this is the way to do it. We will do this in the coming weeks and in the early part of next year with the social partners.

On the question of recapitalisation, the National Pensions Reserve Fund can participate through the significant cash reserves it has to hand. There is also the question of amending the fund in the context of not having a pre-1% payment into the fund next year on account of the financial situation and as we put the fund to work in the Irish economy with the real prospect of getting a return for our money. That is what we intend to do.

Deputy Gilmore asked about the nature of the recapitalisation. That may vary from institution to institution, but he can take it as read that the purpose of any recapitalisation in terms of participation by the State of taxpayers' money will be for the purpose of protecting the taxpayers' money. That, and ensuring that we have recourse to those funds in the future on a convertible basis or whatever. Those details will be worked out with each institution and it will be a matter that would have to be accepted by the regulator and by shareholders in that context.

We are taking this on a case-by-case basis. We are indicating what the total provision should be. It will total €10 billion. The extent of the State provision will depend on what comes forward and we will be making sure that the taxpayers' interests are protected. To elaborate any further at this stage, before the banks submit their proposals, would not protect the taxpayers' interest. That is the course of action we are taking on the question of the recapitalisation of the banks. It is the right approach to take.

With regard to the overall economic situation, we intend bringing forward a pathway on how we deal with the gap in the public finances over a credible timeframe with social partnership collaboration and participation. I make no apologies for that approach.

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