Seán Ardagh (Dublin South Central, Fianna Fail)

Circumstances are such that, potentially, the sums of money in question are huge. I can understand the concern of Deputy Bruton in tabling his amendment. Having said that, I believe the reason behind the extension of the guarantee, for five-year bonds in particular, is to restore the credit system in the banking world. This will allow banks, in time, to give loans to first-time buyers for houses and to small businesses to get the blood flowing. Unless the banks have the finances to do so and are not spancelled in raising capital, there will be a significant problem.

The Minister for Finance has shown since last September that there is a step-by-step plan in place. There are no knee-jerk reactions and the problem is being worked out in a methodical way. The Minister goes to Europe and visits various investment bankers and managers in London to put the case for Ireland. In all cases he is very well received.

The Minister or Taoiseach stated no subordinated debt would be included in the extension of the period subject to the guarantee and that the debt in question would be the five-year medium-term debt that is auctioned off on a normal basis in the euro banking system. To have to come back in December for another extension certainly would cause fear among investors in that they might believe there is something wrong in the Irish system. They might believe we are now going to allow a guarantee and change our mind in six months. Therefore, it is important that confidence be inspired among those who are to invest in the banks through the medium-term five-year bonds. This can be achieved by demonstrating the guarantee will not be lifted in six months.

I can understand the Deputies' concerns over the open-ended nature of the guarantee. However, they should bear in mind the current financial position and the NAMA legislation in September - there is nothing sure about this and we all hope it can be worked out and that the valuations will be fair, agreeable and manageable. There is nobody more competent and better able to address this issue than the present Minister for Finance. I ask Deputy Bruton to withdraw his amendment and allow the Minister time to deal with the financial circumstances that obtain. The Minister has done very well since he entered office and needs to be given the confidence and assistance that the House can give him to ensure the banking system will be restored such that the economy can be stimulated.

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