Arthur Morgan (Louth, Sinn Fein)

I thank the Minister and his officials for the briefing this morning. However, I also echo Deputy Noonan's comments when he pointed out that it was a confidential briefing. I do not understand why they could not have been more forthcoming in answering some of the questions raised because as far as I am aware there has never been a breach of the confidentiality by any Opposition spokespersons who undertook such confidentiality.

We enter a new Dáil session and it will again be dominated by the banking crisis two years on. Is that a sign of incompetence? Instead of having one Anglo Irish Bank, we will now have two — or three if NAMA is included. We will have three administrations and everything in triplicate. So much for efficiencies, but then what would one expect from the Government that brought us the tripling of the costs of the Dublin Port tunnel, the doubling of the cost of the Luas and much more. There is no point in enumerating all of that this evening as we have done so often before.

The Government has told us for two years now that sorting out the banking crisis is its priority. It is not so much its priority, but the only issue on its agenda apart from slashing the incomes of low and middle-income families as we have witnessed in the past three budgets and we are certainly likely to see it again in December's budget based on the promises from the Government parties. Let us consider how the Government is getting on with the banks two years after the Minister for Finance told us that this was the cheapest bailout in the world. He did not say that at the time the guarantee scheme was initially introduced, but when the terms and conditions were announced. Like Deputy Noonan I had an early night last night and was home by 9.30 p.m. I saw the "Prime Time" programme which showed the clip of the Minister standing here in the Chamber when he said that. He also told us the worst was over at a time when although the guarantees were in place, no money had been pumped into Anglo Irish Bank. God help anybody who believed him on that occasion and God help anybody who believes a word that any member of the Government says.

I do not want to dwell on this point, but it is worth quoting the person who was in charge of the Department of Finance through much of the period when the bankers and speculators were wrecking our economy. The Taoiseach told us, "It is my intention to ensure that the Irish taxpayer will not be held liable in any way for any deficit that might occur". How can we believe a word that man says given what has happened since he said that in 2008? This is the same person who met representatives of AIB and Bank of Ireland on 29 September 2008 and knew exactly what was going on, as has clearly emerged. There are no excuses left for this man.

Let us be clear about this important point, which has been reiterated by many economists, including Professor Patrick Honohan. There was no need for a blanket guarantee in September 2008. The Government greatly over-stepped the mark and, as a result, burdened the taxpayers with many billions of euro. The amount is still unquantified — although it might be quantified by tomorrow afternoon. So much protection has been offered to the bondholders that considerable suspicion has grown as to their identity. Are some of them part of yet another golden circle? People are entitled to be suspicious given the Government's record. While I am sure many of them may be international investors, suspicion is growing as to their identity and the Government will not inform us who these investors are. Bluff and bluster has been the order of the day.

I will now address some of the technicalities of the scheme. In debating the motion before the House tonight it is necessary to revert back to the original eligible liabilities guarantee scheme of 2009, not only to gain perspective on what the Government is proposing, but also to highlight the delusion and faults inherent in the Government's banking strategy. Of special importance is the reference in the Schedule at 2.4 that the Minister makes this scheme having regard to "minimising the potential cost to the Exchequer and taxpayers". Nothing could be further from the realities of this scheme and the faulted banking strategy of Government. Its strategy of creating stability through the bailout of our banking institutions has failed.

The result of today's motion will be that certain bank liabilities will be guaranteed up to 2015. The Minister for Finance is able to extend the guarantee scheme on a piecemeal basis as far as 2015. In real terms, the extension of the guarantee simply represents taxpayer crutches for the bank sector. By virtue of provisions of the Financial Measures (Miscellaneous Provisions) Act 2009, the Minister can extend the period of financial support by ministerial order. This effectively means that the Government can draw out the terms of guarantee and extend financial supports to banks indefinitely, once the European Commission consents. The taxpayer is being asked to provide yet another lifeboat for the banks. The critical issue that must be addressed is whether the banking system with the aid of this guarantee can turn itself around, transform into a system that serves the domestic economy by providing the credit much-needed by businesses and households and whether placing this burden on the taxpayer is warranted. The answer is clearly "No".

The ELG scheme allows bonds to be issued with maturities of up to five years, with the bonds having the full backing of the Government to their maturity. When the Minister of State, Deputy Mansergh, introduced the original ELG scheme to the Dáil in December last year, he advised that these provisions would enhance the banks'"ability to discharge their central role in facilitating economic activity in the State" and he also advised that allowing institutions to issue unguaranteed debt was "key to restoring market confidence in the institutions". Nearly ten months later, neither of these objectives has materialised. In fact, there has been a complete shift in the opposite direction. Looking at the bond markets alone we see that bonds have been under pressure for some time amid concerns over the cost of the bank bailout and the sovereign debt. Yesterday Irish bond yields hit a new record high of nearly 6.8%, which is not restoring confidence. The Government is running this State into the ground and market confidence is hitting the floor as demonstrated by yesterday's bond yields. The people of this State lost confidence in the Government long ago and it is clear that the international markets have also.

The banking crisis is quickly becoming a sovereign-debt crisis because a prolonged guarantee puts us all on the hook. The inclusion of Anglo Irish Bank in the guarantee is the principal reason the taxpayer is being required to pump what seems like endless billions into the black hole of Anglo Irish Bank. Approximately €10 billion in bond debt held by Anglo Irish Bank was loaned by investors since September 2008 and it is subject to an explicit guarantee. The debt raised in this way is under a legally enforceable State guarantee.

The original eligible liability guarantee scheme of 2009 stated that the Minister made the scheme having regard to "minimising the potential cost to the Exchequer and taxpayers". Nothing could be further from the realities of this scheme and the faulted banking strategy of Government. The bill for the taxpayer is running into billions. The Government strategy of creating stability through the bailout of our banking institutions has failed. The taxpayer is being asked to provide yet another lifeboat for the banks. The critical issue that must be addressed is whether the banking system with the aid of this guarantee can turn itself around, transform into a system that serves the domestic economy by providing the credit much-needed by businesses and households and whether placing this burden on the taxpayer is warranted.

I have a few questions about what the Minister knew in September 2008 and what they claimed they did not know. We were told the problem was a liquidity issue and not an insolvency issue. Can this point be clarified before this debate concludes? It is a critical issue and it is only fair and reasonable that it be clarified.

How much does the Minister estimate will be required to recapitalise AIB and Bank of Ireland? If he does not have the figures this evening, will he inform us as to when they will be available and be published? It is important all Members have this information as soon as it is available.

This afternoon, responding to questions from my colleague Deputy Ó Caoláin, the Taoiseach claimed he did not mislead the Dáil and had no additional information as to the true state of Anglo Irish Bank and the Irish banking sector when he met with AIB and Bank of Ireland in Government Buildings before announcing the guarantee two years ago. This is now being proved wrong.

This morning we saw the anger among the public demonstrated by the action taken with a cement truck at the Kildare Street entrance to Leinster House. It is important the Minister of State, Deputy White, knows the anger out there. It is also important the Green Party takes its responsibility for what is happening to the Government's policy on the banks. The Green Party must realise it is propping up the Government and is not just a passive passenger along for the ride. This is real stuff and is manifesting itself in more anger.

The man involved in this morning's incident, of course, was hauled off to a Garda station, a matter which Deputy Burton earlier said was raised with her by people on the streets. I too have had telephone calls from constituents asking why this man is holed up in a Garda station being questioned about his actions when the bankers and speculators, aided and abetted by government policy, who wrecked the economy are not even questioned by any authority. A former Taoiseach told us that anyone decrying the massive property bubble should commit suicide while Ministers looked the other way or actively encouraged the speculators and bankers. It is time the Green Party takes its responsibility in all of this and lets us know where it stands. The issue of moral hazard is close to hand at this point.

The pouring of billions of euro into the banks is not happening without a significant cost to the people. In the past few weeks, I have been dealing with constituency cases of single middle-aged men critically ill with cancer being discharged home before their treatment has been completed. No after-treatment care was available for them because of cutbacks in public spending. People, already traumatised through ill health, are being penalised by the Government's policy to look after the banks and their bondholders.

It must be remembered the bondholders did not lend their money to this State. They lent their money to private banks. If I go broke, will the Government bail me out? Of course it will not. There needs to be a serious rethink of the consequences of this guarantee and the bailout before incidents much worse than what happened at the Leinster House gates this morning occur across this State.

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