Paul Gogarty (Dublin Mid West, Green Party)

I am referring to the cost of recapitalising the banks. At present, the European Central Bank, ECB, rate is 1.5%. If we were to recapitalise the banks through external borrowings rather than through the ECB, it might not be possible to obtain the relevant moneys in the first instance. If one were successful in obtaining such moneys, one would be obliged to pay a higher interest rate. That is why making a reasonable estimate with regard to the profits one might make - which is acceptable within the relevant parameters - means that one can obtain the money at a lower rate than if one sought it on the financial markets. Within these parameters, it is a reasonable risk to take because, one way or another, the money must be invested in the banks.

Earlier, I referred to taxi drivers and Deputy Burton referred to the dogs in the street. Both taxi drivers and the dogs in the street would be of the opinion that the State is going to be a majority shareholder in one if not both of the main banks. In that context, we will be sharing some of the risk if the banks make a profit and the State does not. However, if the banks do not make a profit and the State does, we will still be obliged to put up the money to recapitalise the banks in order to ensure that they work properly.

I accept that others disagree with the argument I am putting forward. Some people propose temporary nationalisation, Fine Gael proposes the establishment of a good bank and David McWilliams proposes that we adopt a let-them-all-be-damned approach. These are all valid approaches but some are riskier than others.

On amendment No. 16, if one chooses a market value that relates to the current market value of an asset, one is ignoring the realistic prospect that said asset may actually increase in value. People are always warned in the small print that the value of their shares may fall as well as rise. That could happen in this instance. During the next three to four years, as property prices in Ireland fall - depending on global circumstances, the value of assets in the UK, Northern Ireland and other jurisdictions may also decrease - people may well be in a position to say "We told you so" and inform us that what is happening is terrible. However, in recent years, even if there have been sharp falls, the ultimate trend in respect of values has always been upwards. The Green Party has strongly emphasised the damage that peak oil could do to the global economic system. I do not know how the advent of peak oil will affect what we are attempting to do. I hope the Minister will take cognisance of this aspect in the context of valuations.

It may well be that the threat from peak oil to the global economic system will push up the value of properties as the cost of raw materials pushes up construction costs. This is not an exact science. We do know that it is as wrong to take current market value as the ad infinitum bottom line as it is to predict that the market value will increase or decrease. The Government will make its line in the sand at the appointed time, based on a realistic possibility that the value of the assets will rise to a certain degree. I believe this is a realistic risk. It is a 50-50 risk which is counter-balanced by the equity that has to be taken in the banking system in any event.

There is too much emphasis on the minutiae of the exact economic value. The €7 billion over-payment based on the current guesstimate is not so much of an increase above the current market value estimate as to be preposterously off target. There is a strong possibility that the market value will, over ten years, reach or exceed that point and, therefore, this is a reasonable and balanced approach to take. The banking system must be recapitalised regardless. The risk in terms of that recapitalisation versus the €7 billion over-payment on current market value versus the long term economic value is not too much of a risk.

Deputy Ó Snodaigh mentioned other areas where money could be spent, including the Spirit of Ireland project. I understand that Spirit of Ireland is seeking private as well as State capital and may in the six months come up with some concrete proposals. This year, on any particular day, 40% of our energy came from renewable sources. Under the renewed programme for Government and, through the Minister for Communications, Energy and Natural Resources, Deputy Eamon Ryan, this target is increasing all the time. I agree there needs to be more State investment in this area. However, money must be put into the banking system. Sinn Féin may believe it is better to put money into energy projects rather than into the banks. However, I am a convert to the fact that, begrudgingly and with a sad and heavy heart, the money must be put into the banking system. We have no choice.

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