Joan Burton (Dublin West, Labour)

I mean no slight on the Minister of State, Deputy Devins, in saying it is disappointing that there is no economics Minister present in the Chamber when we are discussing a measure of such fundamental importance for our future. I understand the Minister for Finance may be doing media work in the context of the announcement of a mini budget, but this measure involves a sum of €7 billion for the banks. Several Ministers and Ministers of State have direct economic responsibilities. While I have no objection to the Minister of State, Deputy Devins, being present, as he is just doing what he was asked to do, I find it insulting and an appalling comment by the Government, particularly given the repeated suggestions made by members of the Government that the Opposition has not been co-operative enough. This is the forum in which we can speak and make comments on what the Government is proposing to do and if it is so arrogant in not even wishing to bother hearing what we have to say, it makes co-operation very difficult.

I have before me a useful timeline published in the Irish Independent some weeks ago. On 23 October Mr. Eugene Sheehy, the chief executive of Allied Irish Banks, declared that the bank would not be looking for cash from the Government or shareholders and said they would rather die than raise equity. How is that for a capitalist warrior going into the breach and saying they would rather die than raise equity? On 5 November Allied Irish Banks slashed its profits forecast and indicated that it expected to write off €2.35 billion in loans, mainly to property developers in the past few years. Fast forward to yesterday when the same Mr. Sheehy was rather more subdued when he admitted a worse case scenario for the bank in the next few years of €8.5 billion in bad debts. This followed on the heels of its sister bank, Bank of Ireland, which made an announcement that it expected to have a broad bad debt provision in the next few years of approximately €6 billion.

The Government is putting €7 billion into the two banks — €3.5 billion per bank. I asked when the recapitalisation announcement was made if what was being done was adequate. Some €8 billion and €6 billion make €14 billion. The first question for the Minister is what are the economics of what he is doing? We should bear in mind that is not about saving the vanity of the various senior executives involved but about getting credit flowing to businesses. I am sure the Minister of State will have seen today in the February Exchequer returns that excise duties and VAT returns are down considerably. If one is in business, a fall in excise duties and VAT returns means that business activity is way down because importers have reduced their imports. As a consequence, there is paralysis in the country such that people are nearly afraid to paint their front room, they wonder if they can afford to do so, if it is sensible for them to do so, if they will have a job, or if they would they be better off putting their money under the mattress or saving it in a bank.

This is the last in a series of measures the Government has put before us and none of them has done the trick. We need to recognise that the Government has failed miserably in all its attempts, namely, the bank guarantee scheme, cited as the cleverest measure in the world when introduced at the end of September, bringing forward the budget in October, the announcement of the recapitalisation scheme and of a variation of it, the announcement of the nationalisation of Anglo Irish Bank and the announcement that the banks would not be able to raise more capital but that the State would up its capital investment to €7 billion. In counting these measures on my fingers, they number seven. Today another measure was announced — a mini budget. The pension levy legislation was passed last week. After counting all these measures on my fingers, I have only one finger remaining. All these measures were meant to fix the problems facing us — the lack of fiscal stability in the public finances and the recapitalisation of the banks. I will not even begin to talk about the disaster of unemployment stalking the land with people losing their jobs or income due to having their hours of employment reduced.

At the time of the announcement of the bank guarantee scheme the Government would not acknowledge that property developers and the golden circle had been central to the fall in our fortunes, but Allied Irish Banks stated yesterday that it had loaned €5.4 billion to 30 developers. Mr. Sheehy said only four or five clients — I love the way bankers talk, they should write novels — owed the bank more than €500 million each. What a charming concept. They are photographed in today's edition of the Irish Independent, taken after these announcements and before their nice lunch — given all the humble pie they have had to eat, I am surprised they needed lunch also — against the background of a well known painting in a well known hotel across from Government Buildings. It is a beautiful painting by Jack B. Yeats. I am sure the Minister of State, Deputy Devins, will know it——

See this speech in context