Kieran O'Donnell (Limerick East, Fine Gael)

I support this amendment. Professor Honohan, the Governor of the Central Bank, yesterday appeared before the Joint Committee on Economic Regulatory Affairs, whose Chairman, Deputy Moynihan, is in the Chamber. At the meeting, I asked him a number of questions, one of which was specifically about Anglo Irish Bank. I asked whether Anglo Irish Bank was of systemic importance in the Irish banking system and, furthermore, whether the Irish banking system could survive without it. His answer to the latter was an unequivocal "Yes." The Irish Government has poured €4 billion of taxpayers' money into Anglo Irish Bank. We supported the bank guarantee scheme, but when it came to the nationalisation of Anglo Irish Bank, we opposed it. There should have been an orderly wind-down of the bank. The Government continues to talk about a wind-down, but I am talking about an orderly wind-down. These are two totally different things.

Anglo Irish Bank is not of systemic importance to the Irish economy. The ordinary person or public servant is wondering what has happened to Seán FitzPatrick, the former CEO and chairman of Anglo Irish Bank. Why is he not being held accountable? The transactions that went on between Anglo Irish Bank and Irish Nationwide Building Society involved funds being moved between both balance sheets over a two-month period. People find this impossible to understand. A total of €80 million in directors' loans were kept off the balance sheet of Anglo Irish Bank at the year-end.

Professor Honohan said yesterday that he would apply the public sector pay cuts to staff at the Central Bank and the Irish Financial Services Regulatory Authority. Furthermore, they should apply to the National Treasury Management Agency, which is fully State-owned. Some 5% of the money paid to the banks by NAMA, or €2.7 billion, will be in the form of subordinated debt, but Professor Honohan stated it should have been treble that figure - 15%, which represents another €5.4 billion on top of the €2.7 billion. However, the Minister for Finance led us to believe Professor Honohan was in total agreement with what was being proposed.

What we need here is fairness and equity. Anglo Irish Bank is fully owned by the State. It is effectively a Government Department - a very expensive one. We introduced a reasonable amendment, No. 18, through Deputy Bruton to deal with the issue of salary reductions, although we will probably never reach it, more is the pity. Its effect would have been to exempt the first €30,000 of the salary of any public servant from the reduction. Thus, anyone on €30,000 would be fully exempt, while those in receipt of a salary greater than that amount would have a reduction applied to the balance. The pay cut should apply to the higher-paid staff in Anglo Irish Bank, but not to the many employees at the bank who are relatively low-paid.

The Minister still has not answered my original question. In the last budget, the pension levy was not imposed on the lower paid, but the Government is now imposing pay cuts on public servants earning any salary.

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