Thomas Byrne (Meath East, Fianna Fail)

We are in a serious situation. We have taken the lead in several areas. The State bank guarantee certainly saved the banking system. The recapitalisation is necessary but we should remind people that it is a loan which must be repaid at a relatively high rate of interest. That point is always forgotten and ignored. It is almost as if one's Christmas bonus is paying for the bank recapitalisation although nothing could be further from the truth. I urge everyone in the House to consider this point because we all have the same objective. Our motives are the question but we have the same objective of ensuring that the banks are able to perform and work and that the economy gets back on its feet. There are some signs of hope and of a slowdown in the slowdown. We would be very pleased if this were the start of a turnaround. That is what gives confidence and confidence has been crucially absent.

I agree with Deputy Beverly Flynn on the issue of mortgages. I have done a good deal of work in that area. Issues such as negative equity result in a substantial sap on people's confidence but solutions exist. Apparently some of the covered institutions are seeking a slightly higher variable rate. If this is the case then why not cut off a certain lump of the mortgage? Some people who are working and in a position to pay might rather pay a slightly higher rate of interest if they thought their negative equity was being addressed and if there were forgiveness of some of the loan. That is one possible solution to the matter of negative equity. The issue of negative equity must be examined also in cases where people must move house. Let us consider the case of a family in a one bedroom dwelling which cannot move but with a child or children on the way since property values declined. Such people should perhaps be able to take a negative equity mortgage to move to a larger property.

Perhaps Deputy Bruton's solutions are more properly thought out than what has been offered by the Labour Party, as one might expect. However the debate serves to remind the people that two weeks ago there was a debate on Fine Gael's main job creation plan which was to have been the answer to all our prayers. Nevertheless, the Labour Party did not vote for it in the Dáil. Tonight the Labour Party has proposed what it has described as the most historic debate in the history of the Chamber, which is an exaggeration. It proposes nationalising the banks but Fine Gael does not agree. The people will ask who has the coherent solutions, who is providing real answers and who is upping the ante politically.

See this speech in context