Lucinda Creighton (Dublin South East, Fine Gael)

From the contributions I have heard, the context of the debate on this motion has been skirted over by the Government, certainly by the Minister for Finance in the speech he delivered earlier today. It is clear we desperately need to restore confidence in the banking system in this country. It is equally obvious the banking system is fundamentally important to the general economy and the two cannot be separated or divided.

The problem is that the issue of confidence in our banking system is inextricably linked to the mismanagement, incompetence and bumbling we have seen from the Government benches, particularly from Cabinet and specifically from the Taoiseach and the Minister for Finance over the past six months.

As Deputy Coveney pointed out, the Fine Gael party stepped up to the plate last September when the scale of the banking crisis began to emerge. We put our faith and trust in the word, commitments and assurances given to us by Government at that time. We did so because we believed that by restoring some faith in the banking system, we were doing the right thing, the patriotic thing, and doing what was necessary to ensure an entire breakdown of the system did not occur.

However, it has become evident in recent months, particularly in the past few weeks, that we did not get any clarity from the Government at that time. We were essentially being kept out of the loop and we were not seeing full disclosure of the seriousness and gravity of the situation and the extent of the toxic debt that was and is present in those banks. While "duplicitous" is probably too strong a word, it was certainly a breach of faith from both the Government side and specifically from the perspective of the banks, which had at that point been asked to provide full disclosure to both the Government and the public. That did not happen.

Now, we are being asked to invest — as the Government chooses to call it, although I am not sure it is an investment — or at the least to spend public money to the tune of €7 billion in order to recapitalise the banks. This is something the banks and the Government assured us before Christmas was not necessary and would not arise in the context of the Irish banking system, which was clearly incorrect.

I have concerns on two points specific to the scheme. First, the 8% dividend which is to be committed on an annual basis to the Government will amount to approximately €600 million per annum from Bank of Ireland and AIB. I seriously question how this will achieve the freeing up of credit for small businesses and mortgages which we have been assured will happen by both the banks and the Minister for Finance. I do not see how this will be achievable when that level of money is being committed in a dividend return to the Government on an annual basis. The banks are clearly not in a healthy state and it is very difficult to understand how this will be viable.

Deputy Coveney pointed to the issue of the failure of the Government to separate toxic debt from the good loans which are and potentially will be on the books of the Irish banks in the coming years. This is a major mistake on the part of the Government.

The scheme does nothing to break the culture which has become pervasive in Irish banking. It has shown the Government to be weak and unable to confront and stand up to the banks and demand transparency and openness. We have not seen disclosure of the type of information that is required to justify this expenditure of €7 billion on the Irish banks.

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