Pat Rabbitte (Dublin South West, Labour)

Listening to Deputy Bruton and Deputy Burton I am bound to say I have some sympathy for the Minister for Finance. Of all the Ministers in the former Taoiseach, Deputy Bertie Ahern's second Government he is least responsible for getting us into the terrible mess we are in now. He has taken the worst hospital pass in modern politics from his predecessor. Whereas he was a good Minister for Justice, Equality and Law Reform, I am bound to say that when it comes to economics he has proved to be a slow learner. However, the middle of a crisis is no place for on-the-job training.

The Minister misjudged the downturn. He got it wrong on the pay deal. He got it wrong on the budget. He bet the country on the banks and that has not solved anything. The Minister is back where he was on 29 September except that this time the banks have him over a barrel because of the guarantee. He did what he did on 29 September because the Government argued then that if one bank went down it could cause difficulty for other banks. That same bank is again in danger, despite the guarantee. We have not heard from the Minister whether it is his intention to nationalise Anglo Irish Bank. If he does, what are the implications for where that bank interacts with the Bank of Ireland? Does the Minister intend to use Anglo Irish Bank as a vehicle to strip out some of the toxic loans in some of the other banks or does he intend to reorganise along the lines Deputy Burton, I and the Labour Party favour, which is the way the Swedish Government did it?

The problem is that in the meanwhile the real economy is suffering. Small companies are hurting, people are losing their jobs and, in some cases, their homes. The banks are stalling, share prices are sliding and credit is tightening. There can be no economic stability, not to mention economic recovery without a functioning banking system. The Minister is correct to say that on day one I referred to the likelihood of capitalisation being necessary from the National Pensions Reserve Fund, but I said that would be the case because the core problem, as Deputy Burton indicated, is the quality of some of the big loans on the loan books of the banks.

Whereas we may not have a full-blown credit freeze, small companies are fearful of what the first quarter of 2009 will bring. All the while the Minister is locked in a never-ending embrace with the banks reminiscent of that scene in "They Shoot Horses, Don't They?" where each is afraid to let go of the other.

The two Brians boasted of how speedily, decisively and instantaneously they reacted on 29 September when they got a telephone call at close of business from the two big banks and that a guarantee was in place by midnight. Meanwhile, Mr. Seán Fitzpatrick slept soundly, disturbed only by the closing scenes of the play he had attended that evening. I did not believe a word of that then and I do not believe a word of it now, but if the Minister could react so speedily then what has he been doing for the past 11 weeks? It is this drift, uncertainty and prevarication that is doing so much damage to the morale of our people and to the confidence of the business sector.

There have been press releases to the effect that we do not need an economic plan because we have one, called the national development plan. Then we are told we will get an economic plan. Another press release indicated the banks did not require capitalisation but then we heard we are going to set up a recapitalisation fund. The Minister for Finance told the Dáil he would raise the issue of pay with the unions but the Taoiseach said no, he is not. Sunday night's announcement from the war room in the Cabinet office, on examination, amounted to no more than an invitation to the banks to "Come up and see me some time". The banks will write to the Minister over Christmas and we will work out something.

Following the debate, we still do not know what is the shape of the fund, what it will comprise, which bank will get what, we do not know what will be the terms and conditions. We need to know whether the Minister is going the route of Irish fund managers' investment with the National Pensions Reserve Fund or whether he will go outside the State to some of the private equity consortia. We have not had any indication.

I accept the Minister is constrained by what he can say but he is not constrained in terms of what he can do. It is 11 weeks since 29 September. Business is hurting. Jobs are being lost. Credit is beginning to freeze up and we still do not have the shape of a solution.

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