Frank Fahey (Galway West, Fianna Fail)

The State will receive an 8% dividend on that investment. In addition, the State is allowed, through the purchase of preference shares, to appoint 25% of the directors and to have 25% of the voting rights. The National Pensions Reserve Fund is getting a much better return for its investment in the two banks than it would obtain from any investment anywhere in the world.

The 2000 Act provided for a minimum payment of 1% of GNP into this fund from the Exchequer in each year from 2001 to 2055. The objective of this was to meet, as far as possible, the cost to the Exchequer of social welfare and public pensions from 2025 onward. It is important to emphasise that the State will continue to invest that €1 billion per annum during the course of this crisis. Of the €7 billion total, the National Pensions Reserve Fund will invest €4 billion in Bank of Ireland and Allied Irish Banks. Another €3 million, €1.6 million this year, which is provided for in the recent budget, and €1.4 million next year will be invested by the Exchequer. The Exchequer will continue the key principle, even in these tough times, that we will continue to put away 1% of GNP, which was the original intention of the Bill. I refer to the absolute importance of this reserve fund, which amounted to €16 billion at the end of last year. At its highest point, it was some €19 billion. It is probably down somewhat now.

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