Enda Kenny (Mayo, Fine Gael)

When the Minister for Finance spoke on the legislation dealing with the guarantees on deposits he said we are deeply "embedded" in the banking sector. Now the Tánaiste tells me that the Government will continue to be "vociferous". I asked her three questions. I did not ask for a specific day or date. When does the Government calculate that lending restrictions will be eased for small businesses throughout the country? How much does the Government calculate will be made available in extra lending capacity as a result of NAMA, given what I said earlier? Can the Tánaiste tell the House, as she continues to be "vociferous" with the banks and as the committee is doing its work, or at least monitoring if not solving problems, what specific commitments have the Bank of Ireland and Allied Irish Bank given the Government that they will use the extra moneys they receive through NAMA to lend on to small business and struggling families across the country?

The Tánaiste has not answered any of those questions and I have a further question. The Government says, through the Minister for Finance, that the NAMA bonds will pay a premium of 0.5% above the main ECB rate and it claims that NAMA can cover its own costs at the introductory rate of 1.5% on the bonds issued to the banks and the big fees to be paid to bankers, lawyers and valuers. On this basis it says that NAMA can break even if the value of the assets purchased rises by 10% over ten years. Has the Government considered what will happen if interest rates rise? The financial markets are pencilling in not just a rise in rates but a quadrupling of the ECB base rate over the next ten years to an average of 3.8%. That would add €1.5 billion extra per year to NAMA's operating costs which over ten years amounts to €15 billion.

That does not take into account the very likely escalation in non-performing loans and the decline in rents expected on the NAMA portfolio. That is a €15 billion black hole in the Government's figures. I have asked four questions, on a day when the Central Statistics Office announced that emigration is back as part of the fabric of this society, and when we know that in the year to March 174,000 people lost their jobs. It is fine to be "vociferous" about the banks and to talk about "convergence" and all these wonderful schemes but can the Tánaiste explain how €30 billion going into Anglo Irish Bank and Irish Nationwide will take one person off any of the dole queues around the country which have been created by the incompetence of this Government?

See this speech in context