Paul Gogarty (Dublin Mid West, Green Party)

In September 2008, the Irish banking system was about to be rolled over as a result of bad business decisions, lax banking practices particularly with regard to lending, a related political system unduly influenced by vested interests at both national and local level, to which I have alluded in previous contributions, as well as poor regulation. It was brought to the brink by its incapacity to deal with what was, admittedly, a global recession. Opinion still differs as to whether Anglo Irish Bank could be described as a systemic bank. The risk was that if Anglo Irish Bank fell, the rest of the Irish banking system would collapse. The Minister for Finance made a judgment call that Anglo Irish Bank needed to be protected, first by inclusion in the bank guarantee scheme and, later, through its nationalisation. It was an educated decision because the risk in letting Anglo Irish Bank fail was far greater than the risk in trying to manage its debt portfolio in an incremental manner through a national asset management agency.

Others both inside and outside these Houses may seek solace from the comforting security of inconsequential responsibility. The suggestions put forward have ranged from pulling out of the euro through letting the banks collapse to nationalising them. That would all be at a much higher cost to the taxpayer than a partial and temporary equity stake. The Minister, Deputy Brian Lenihan, as the line Minister could not afford to take those risks and just put forward ideas. He had to find something that balanced innovation and conservatism simultaneously. That is what NAMA is, and the Green Party agreed with this and fed into the process.

Much has happened since September 2008. There is a new Governor of the Central Bank and a new Financial Regulator. We now own Anglo Irish Bank and this process has begun, for better or for worse. It should be allowed to continue to minimise the cost to the taxpayer and maximise the returns from the good bank element in the future. There is a new chief executive in Anglo Irish Bank whose responsibility is to the Irish people, not to cronies and vested interests. I am disappointed that some say it is still more cost effective to let Anglo Irish Bank fail and leave its debts uncovered. The argument has moved on. We cannot realistically default on those debts without increasing the cost of borrowing and risking a Greek style financial tragedy. Moving forward is the only game in town.

There also appears to be confusion about where the money is coming from and whether there is an alternative way to spend the huge sums going into NAMA and bank recapitalisation. This is not our wish list. We had to put our banking and economic system on a sound footing and put the money into the banks. This money is coming from different sources, not a wish fund which one can spend on health, education and wages. It comes from a preferential ECB rate which is designed only to cover our bank rescue and NAMA. It would not be available otherwise. If one believes that getting our banking system up and running again is crucial to our economy, there is no other option and this is the cheapest method available. Other criticisms regarding lack of spending on capital projects or covering current annual State bills are spurious.

Today, we have been given the figures relating to the loans transferred to NAMA, comprising 20% of the entire portfolio. The average discount of 47% is far higher than the original guesstimate of 30% and puts paid to the suggestion that this would amount to favours for cronies. This is a decision made on commercial grounds and putting the public interest first. We now own significant shareholdings in the larger banks. This will balance the risks associated with NAMA to ensure a return in future for the Exchequer.

I welcome the measures to protect those at risk of losing their homes, which were announced previously. I also welcome the statement of intent by the Minister to provide additional support to SMEs in particular, with regard to providing cashflow and the credit review process. One sector that could do with help from the State is the printing sector. It is experiencing huge cashflow problems at present. There is scope for the State to act. It could cut up its contracts into contracts of under €50,000 and ensure that Irish printers are provided with good business, rather than the current practice of giving it to contract operations to divvy out the printing to companies in other EU countries that are not covered by the same stringent regulations. Think Irish first where that is possible and help speed up the economic recovery.

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