Michael Noonan (Limerick East, Fine Gael)

I believe an extension of the ELG scheme is necessary to ensure the refinancing of Bank of Ireland and Allied Irish Banks may proceed in an orderly fashion, that deposits are underpinned elsewhere in the market and that other institutions that wish to avail of the guarantee are free to do so. I am reluctant to support the motion, however, for two reasons, as dealt with in my amendment. When the CIF guarantee was introduced two years ago, Fine Gael supported the proposal of the Minister for Finance. It was our view that a guarantee was necessary in the interests of a functioning banking system, the general economy and in the national interest. However, we are of the view that we were misled by the Minister and before we support the motion tonight, we must have an assurance from the Minister that he is providing us with the full facts at his disposal and that we are not again being misled.

In the course of the debate in 2008 I asked the Minister for Finance whether he was seeking the guarantee to deal with a liquidity crisis within the banking system or if there was also a solvency crisis. I spoke at some length during that debate and outlined my concern in some detail. I explained my concern in some detail. The Minister in his reply assured me that the guarantee was necessary to deal only with a liquidity problem in the banks. It was clear within a couple of weeks there was a major solvency problem in the banks despite the Minister's assurances in the House to the contrary and, on that basis, Fine Gael voted for the guarantee. It is possible the Minister was misled and was not aware of the full facts regarding the banks when he proposed the guarantee to the House. This has been the Minister's defence since the full facts emerged, namely, that he was not aware of the full facts; that the banks had been economical with the truth and that he was sorry he had misled the House but it was unintentional. That may be so and what has happened over the years gives credence to the Minister's explanation.

It was the current Minister for Finance who stated in this House when Anglo Irish Bank was being nationalised that the total exposure of the taxpayer would be €4.5 billion. I do not know what the current figure is but yesterday, it was €24 billion and rising with a further instalment to be added. I do not believe the Minister made up the figure he gave us and as such he must have received bad figures from the bank, the Financial Regulator and the Governor.

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