Joe Costello (Dublin Central, Labour)

I compliment Deputy Burton on tabling this important motion which deals with the establishment of a strategic investment bank, an important policy item for the Labour Party and, I believe, the country.

The Minister, Deputy Ryan, appeared in his remarks to be depending largely on the Bank of Ireland getting the country out of the mess it is in. The words proposed to be inserted following the deletion of all words after "Dáil Éireann" are outrageous and seek to commend the Government on its actions to stabilise the financial system and note that its policy has already delivered a cleaner, well capitalised and better funded Bank of Ireland which is now in a position to provide credit to support economic recovery and renew job creation. If the Minister believes that, he is in cloud cuckoo land. All of the banks, including Bank of Ireland, are under-capitalised. It may be the best of a bad lot but that is all it is. If the Minister believes the engine of the Irish economy can be restarted by one bank, which remains in a considerable degree of trouble, he has another thing coming.

The reality of the situation is absolutely stark for this country. Unemployment has in the past two years almost trebled from just under 5% to almost 14%. The Live Register stands at 436,000, with 32% youth unemployment. Are we to allow this generation stagnate or emigrate? Some 40,000 people emigrated last year. The ESRI has stated that up to 60,000 people will emigrate this year. This means that 100,000 people will have emigrated from Ireland in the space of two years, which is akin to the 1950s when emigration was at its worst and the lifeblood of this country was being drained away owing to a lack of employment.

The current crisis came about because of irresponsible banking and regulation and, most of all, irresponsible Government. All have contributed to the current crisis we are in. The problem is that the only response from Government to get us out of this mess is to bail out the banks. That is its only coherent response. The mantra for the past two years has been, stabilise the banks, capitalise the banks, give the banks a guarantee and all will be hunky dory. The solution is that we give all of this to the private banking sector which was involved in bringing our economy to its knees.

We cannot allow the country to slip back into stagnation as happened in the past. Our first priority must be to get the wheels of our economy turning again, to stop the haemorrhaging of jobs and to find new ways of creating employment. The Labour Party has outlined its policy in terms of a stimulus package which would intervene to retain existing jobs, provide training, education and upskilling for those who might lose their jobs and to provide incentives and resources for the creation of new sustainable jobs. Central to job retention and creation is a reliable steady credit flow. This is where the Labour Party proposal comes in. The private banking system cannot provide this. Not alone cannot it not do so now but it did not do so in the past. There is no indication it is capable of doing so. The banks have been reckless, greedy and irresponsible. The citizen in the street and corporate Ireland require that steady flow of credit which is not available anywhere.

The banks splurged in the past and do not now have money to spend and are too impaired to provide what is needed. We can no longer allow the private banking sector to have total control of the purse strings that will determine the future of our economy. We must provide ourselves with a sufficient flow of capital to our economy, including to our citizens and small and medium-sized enterprises that are crying out for an injection of funds and cannot got them, causing huge problems. The small and medium enterprise sector generates 64% of all employment. More than one million in this country are employed in that sector. Some 50% of the entire working population of this country are in the small and medium enterprise sector. The Government has not been funding them. It has not been putting pressure on the banks which remain under-capitalised to do so. Also, the banks are not drawing down money available to them from the European Investment Bank.

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