Joan Burton (Dublin West, Labour)

The purpose of amendments Nos. 79 and 80 is very simple. They are not prescriptive in detail. They simply seek to require the Minister to establish a framework with the participating institutions in receipt of the €54 billion that will provide for a two-year moratorium on house repossessions by those institutions. I am well aware that Bank of Ireland and Allied Irish Banks have stated continuously that they are not eager to rush to repossess houses. This is correct but we do not know what will happen once the NAMA legislation is implemented. The banks may find it necessary to change their policy.

We do not know the breakdown in respect of house mortgages held by Anglo Irish Bank and Irish Nationwide. It may be that these mortgages largely pertain to houses bought to let or to more expensive homes. All we are saying is that there should be a framework. The Minister and his officials will probably claim the €54 billion is an Irish form of quantitative easing to put more money into the economy but the fact is that we are putting more money into a distressed economy that is deflating probably at a rate not seen since the 1930s. Our level of deflation is worse than that of almost any other economy I know of. Both the extent and speed of deflation genuinely frighten me.

If the €54 billion being invested as a means of quantitative easing does not have a positive impact on people's psychology, the exercise will not succeed. Deputy Michael D. Higgins referred not only to macro-economics and econometrics but also to political economy. Political economy concerns the psychology of consumer spending and consumer and business confidence. If €54 billion is to be invested as a means of quantitative easing, the Minister has included no corresponding mechanisms in the Bill to ensure this will work. This is a very difficult task. I do not underestimate the extent to which it would tax the officials of the Department of Finance. It is a challenge they have not faced before. It would need a considerable amount of ingenuity to think through how one does that. I say that as someone who worked in banks. It is extremely difficult to be prescriptive about that. That is why the Labour Party amendment is not prescriptive. It is focused rather on sending a psychological signal, backed up by a reference in the Bill to there being, first, in regard to the quantitative easing, a framework of two years on the home loans. People can scoff at this for technical reasons but they would be very foolish to scoff at it for business and psychological, economic reasons. I appreciate this would challenge the officials in the Department of Finance, the staff in the Financial Regulator, and it would particularly challenge staff in the Central Bank to be imaginative about how this would be overseen. Probably the single greatest challenge facing the National Asset Management Agency if it goes ahead, is how one makes the €54 billion effective?

I draw the Minister's attention to the fact that of the €77 billion, as he is aware, €28 billion is for Anglo Irish Bank, and a staggering €8.3 billion is for Irish Nationwide.

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