Michael Kennedy (Dublin North, Fianna Fail)

This is important and necessary legislation. Anyone who suggests we should allow bank failures in this country is living in cloud cuckoo land. The savings of our pensioners, the money of small and big businesses, and the money of local authorities, etc., demand that we have a proper banking system in the national interest and for economic reasons. Anyone who suggests the Government had an alternative is not living in the real world. Taking away the small number of detractors in the Labour Party and Fine Gael, the vast majority of business people and the public recognise that the actions of the Government with regard to the banking system, guaranteeing deposits last September and investing in Allied Irish Bank and Bank of Ireland, are necessary.

I reject criticism constantly levelled at the Government that this is an Irish problem. It is a worldwide problem. We see media reports of the meeting between President Obama and Prime Minister Gordon Brown. They issued a joint statement referring to the two important issues. They are working towards a new global regulatory system for banks and a fiscal stimulus package. Mr. Gordon Brown is quoted as saying that he regards the battle against the global recession to be greater than fighting fascism throughout Europe in the 1940s. That puts it into perspective. We are not alone in this, countries such as Germany, France, Spain, Belgium and the UK have the same problems. This House should be big enough to recognise that and to stop petty bickering with regard to our national financial position. I understand the members of the European Central Bank will meet on Thursday to revise the forecast it made less than two months ago. The EU Commission revises, almost on a daily basis, where the world and European economy is going. To suggest that this is purely an Irish problem is to live in cloud cuckoo land.

The US, having put €750 billion into the banking system, last week had to put a further €40 billion into Citibank, and only yesterday it had to put another €40 billion into AIG, a company which has had to be funded for the third time. That puts everything into perspective, as this occurred having let Lehman Brothers collapse in the hope that it would resolve all the toxic debt problems.

Last week Mr. Jean-Claude Trichet in Dublin spoke highly of what the Irish Government did and how it was resolving its problems. Last week the Government put a €4 billion bond in place over three years. This was completed at a competitive rate and without any major difficulties, which speaks volumes about the confidence in the Irish economy. We should not lose sight of that fact. Anything people say to detract from our country's finances should be put in the context of how international investors and funders see us. We are at a very crucial time and making disparaging remarks about our banking system or otherwise is not in the national interest.

When Fine Gael and the Labour Party were in Government in the mid 1980s, they had to bail out a bank. We all recall that a company called the Insurance Corporation of Ireland got into major difficulties. I was fairly familiar with the chairman because I worked in the insurance business. It was of paramount importance that the company be saved because it would bring down AIB. That cost the State in the order of £450 million and nobody in their right mind would suggest that AIB in the 1980s should have been let go to the wall. Equally, nobody today should accept that the Government should sit idle and not make every effort to resolve our banking difficulties. This Bill is about resolving difficulties that both AIB and Bank of Ireland have.

I would have thought that Labour and Fine Gael might have recognised that they had the same problem as today's Government in terms of bailing out banks. The day for cheap political posturing is over when we are talking about the national finances and our economy in general. I want to put to bed once and for all these smears that any Fianna Fáil Minister was involved with the Anglo Irish Bank fiasco. The Minister for Transport, Deputy Noel Dempsey, summed it up pretty well at the weekend when he made his remarks. We on this side of the House abhor the actions of certain bankers for their own personal gain which risk the security and stabilisation of the banking institutions. The Opposition should accept that. Smearing Members across this House does nobody any good. International investors and bankers are looking at us and we must move on.

I send my condolences to Deputy Bruton, whose father died over the weekend. I hope he and Deputy Burton will have a good look at our country's finances and that having got all the information, they will come to accept that we are at a very serious point in time regarding our finances. I sincerely hope that having studied those figures, they will see the need for passing the Bill today.

I cannot tell them what to do but I exhort them, in the national interest, to consider the bigger picture and think outside the box. This country needs a stable banking system and does not need people talking it down. It Fine Gael and Labour back this Bill it would show that they are responsible parties which have the country's interests at heart. To Deputy Burton in particular I suggest that we move on and take the actions required by the country in the national interest.

We are getting a good investment with this Bill in terms of what is proposed. We will have €560 million in income deriving from this investment in the two banks. That is twice, at 8%, what one would get in the open market. The €560 million will be put to good use. As Deputy Fahey stated on the National Pensions Reserve Fund, the fact that it was in place showed foresight on the part of previous Fianna Fáil-led Governments.

On the provisions for bank lending, the 10% provision for banks to lend to business is essential, and the quicker we pass the legislation and get the €4 billion into the system, the better it will be. The banks will do what we want and what the country — and specifically business — needs in lending money. The same is true of the 30% provision for first-time buyers.

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