Enda Kenny (Mayo, Fine Gael)

The second part of our proposal is to give the banks some time to strengthen their own balance sheets. Although the details are not the same, our proposal is broadly parallel to that put forward by Dermot Desmond in the newspapers yesterday.

If individual banks make progress we could, under the Fine Gael proposal, inject capital into them to aid a return to financial health. If they have not made adequate progress, particularly in renegotiating the terms of their loans with the bondholders, we would nationalise an individual bank and separate it into a good and a bad bank. We will place all of the equity capital and subordinated - or high-risk - bonds into the bad bank, along with the worst developer loans. The good bank, free of the worst of the debt, could trade normally and would be re-floated in the market when it made financial sense. If individual good banks make progress, under the Fine Gael proposal, we could inject capital into them to aid a return to financial health. If they have not made adequate progress, particularly in renegotiating the terms of their loans with the bondholders, we would, under the plan, nationalise individual banks and separate them into a good bank and a bad bank. We would place all the equity capital and subordinated high risk bonds into the bad bank along with the worst developer loans. The good bank, free of the worst of the debt, could trade normally. It could be refloated in the market when it would make financial sense to do so.

The Government claims that these proposals are untried and would somehow deny Ireland access to the capital markets. As Deputy Bruton pointed out and as referred to by the Taoiseach, investment in markets did not close as a consequence of what happened in the case of the US Government in terms of Washington Mutual or in the case of Northern Rock and Bradford and Bingley in England.

My message today is that the time for spinning is over. NAMA is secretive, politically driven and a politically directed workout for banks, developers and speculators. It will do nothing to get credit flowing to business when we want to do so now. It is the highest cost and the highest risk solution for the Irish taxpayer and, above all, it is deeply unfair.

The Taoiseach asked last night whether NAMA is a gamble and he replied that the only gamble was if nothing was done. For four years prior to becoming Taoiseach, he sat in Merrion Street and knew the projections that were being made, yet nothing was done by him, as Minister for Finance, or by the Government, of which he is now leader, to stop this. With all the evidence and information that was flowing into Merrion Street and if patriotism and standing by their country was foremost in those people's minds, then surely action could and should have been taken long before now. However, I suppose it goes back to the Taoiseach's belief of loyalty to the party first and loyalty to the country second.

How can the Taoiseach ask his party and the Irish people to make sacrifices in the forthcoming budget if he is not prepared to insist that the banks and their investors assume their fair share of risk? I recognise that we are faced with the political reality of the NAMA legislation as being the option under debate. I ask the Minister again to open his mind to alternatives that exist which will not strangle the Irish taxpayer, that will allow for fairness and real risk sharing and will create a situation, through a national recovery bank, where credit can flow to business now.

Every Deputy in the House can point out what has happened in the case of business people in their constituencies. I know of a case last week where a man received €45,000 for a job he completed. He put that money into his current account to pay his workers their wages but the cheques bounced. When he went to his bank to ask what had happened he was told that the bank has offset that money against his overdraft. There are many such cases of banks hoarding money. If they believe a levy will be applied against them in a number of years time, they will want to increase their capital base and that will restrict lending. How much of the moneys to be transferred by the Irish taxpayers to the banking system will be spent by banks in clearing the debts they have borrowed from other lending institutions abroad? We need to know that figure because this is fundamental to what will be available to lend as credit to business around the country.

If we all espoused the sentiment that we stand by our country, that we want to see a competitive and vibrant banking system, the restoration of our public finances to good health and for people to be able to get liquidity and credit so that business can flourish, there are other ways of doing it than through NAMA. I reject the Bill that the Taoiseach has put before us because it is unfair and it does not allow for credit to flow. It is a bailout for banks, speculators and developers and it exposes the throat of the Irish taxpayer to a banking system that has failed, as the Taoiseach pointed out yesterday, while being supervised, or not supervised as the case might be, by an incompetent Government.

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