Billy Kelleher (Cork North Central, Fianna Fail)

Much more has to be done on this but everybody inside and outside the House knows that until such time as the impaired balance sheets of the banks are addressed their access to wholesale money markets and lending will also be impaired. I urge people debating this legislation not to make throwaway flippant remarks such as "bail out the bankers and builders". We all know the difficulties we are in but the parties using lines about bailouts know well, as the Minister for Finance outlined on a number of occasions for those who want to listen, that people who owed money to the banks will owe the same amount to the National Asset Management Agency and they will have to pay it back or be pursued for default in the normal way. These populist lines do not do justice to the seriousness of the debate before the House.

Approximately two-thirds of the properties involved are in Ireland, one fifth are in Great Britain and 6% are in Northern Ireland. The remainder of the properties that will be taken into NAMA are in the United States and Europe. A view is being expressed that this is bailing out developers who invested abroad. However, if there is recovery in those economies those assets will inflate in value. Not having all its eggs in the Irish market could be of assistance to NAMA and we should acknowledge that if there is a recovery in parts of Europe or in the United States it may assist in inflating the value of the loans that NAMA is taking on.

We must also acknowledge that some of the lending practices, not only in property development but in all credit, were not done in a sustainable way. People purchasing homes received mortgages of 103% and 105% and stamp duty, car loans and credit loans were rolled into them and that is an unacceptable practice. On another day we must discuss how we as a society should lend to people.

The Bill is very important. As the Minister of State with responsibility for trade, I travel abroad and there is an acceptance outside of Ireland that we are dealing with this in a structured and managed way. It has been complimented by the European Central Bank and the IMF and many commentators throughout the world have stated that Ireland is making critical decisions and is going the right way to address the problems we face in our financial institutions.

Some parties take the view that nationalisation is the appropriate measure as if it were a free ride and that the taxpayer would not be exposed to any risk. As we all know, the opposite is the case; if the banks were nationalised the full exposure would be on the Irish taxpayer. Simplistic views are expressed that there are easier ways to address the difficulties but there are no easy ways to address this and when we have these debates we should debate with honesty and integrity knowing well that there are no easy options in trying to address the huge problems we face.

In recent times we had huge contraction in the Irish economy and projections are for a 9% contraction this year and 3.5% next year. However, there is evidence to suggest that the rate of contraction is slowing. That is no comfort to the many thousands of people losing their jobs and those who have lost them but at some stage this recession must bottom out and there is evidence to suggest that this is approaching faster than was anticipated in projections by the Government and commentary in the Dáil.

We are quickly becoming more competitive. We are an open trading economy and we live or die by our exports. Recently, there has been a major restructuring downwards of labour unit costs in the broader economy. While that might create certain difficulties for workers and employees, it adds to our competitiveness. Recent trade figures suggest we are regaining competitiveness in the international markets. Over the coming months, if we see signs of recovery in the French or German economies or other large economies into which we trade it will provide huge potential for us to gain market share in those areas.

We would all prefer if were not discussing this Bill because the difficulties we face had not come about. However, they are present and the Government has dealt with them resolutely. It has had a clear strategy since the brave decision on 29 September last year on the guarantee of the banks. That was very important as we would not be debating banking issues if that guarantee was not put in place because there would have been a systemic collapse of the major banking institutions in the country. That would have had profound implications for the broader economy, jobs and opportunities.

While we discuss this it is important to acknowledge that some commentators have stated recently that the National Asset Management Agency is the way to go and that other options proposed by political parties, while put forward with the right ideas in mind, cannot address the problems we are trying to address to ensure credit flows to small and medium sized businesses and to people who want to purchase homes. The Taoiseach clearly stated that is the only motivation for proposing this Bill and those who continually slur the integrity of the Government by stating it is a bailout for developers and builders are not being fair and honest in their assessment. This is about addressing the problems in the financial services to allow credit to flow to the broader economy.

See this speech in context