Kieran O'Donnell (Limerick East, Fine Gael)

I also commend Deputy Bruton for tabling this motion. My colleagues have touched on many of the areas but I want to zone in on one term, namely, "credibility". We have Government spokespersons and Deputies coming out and continually saying that the Opposition is making soundings without any content. I want to consider this in the cold light of day. Why are we here at this particular point in time today? It is because of the policies implemented by the Government, particularly in regard to the banks. I read the announcement today from the Minister on the recapitalisation of the banks and could find little or nothing about credit to the real economy. It is all about the banks and having to reprogramme the budget, thereby hitting taxpayers.

When the guarantee was put in place, the Government had a two year window of opportunity to deal with the banks. It procrastinated. We put forward very straightforward policies which involved the banks dealing with their toxic loans and setting up good banks. Furthermore, we spoke about a national recovery bank, which concerned the flow of credit to the SME sector which is currently dying on its feet. It is the lifeblood of this economy. Half of our general Government deficit is due to unemployment. The Government did not factor in any sort of growth.

Now we are in a situation whereby €90 billion is going into the banks, including NAMA. It is the equivalent to virtually 100% of our annual wealth. How did we get to this position? How do we have a situation whereby the biggest bank in the country is being nationalised today? How did that happen? It is because the policy the Government went with put no onus on the banks to deal with their situations. Effectively, they put their hands out and all the Government asked was, "How much more do you need?".

The problem is getting the real economy going. Furthermore, the old board of AIB needs to be told to step down by the Minister. I heard him earlier saying that it was not his role to interfere with boards of banks. We now effectively own AIB. That is taxpayers' money and he who pays the piper calls the tune. We need to send out a marker to the international markets that change and credibility is going to happen. Furthermore, our bond yields went down earlier by a minuscule amount. We are paying 6.57% in international markets today. The Government has put us in a position where the NTMA is reluctant to go out next month to borrow money on the international markets.

The Minister said earlier that it is not going out because of the rates. That sends out a message that there is a further degree of uncertainty. It is about credibility and belief. If I go into my local bank manager and I am doing well, he or she will more than likely give me the funding. If I have made mistake after mistake and I go back to him or her, he or she will query my figures in minute detail. The Government knew there were problems with Anglo Irish Bank. It went to Bank of Ireland and said it wanted it to take it over because it was insolvent.

Furthermore, Mr. Michael Somers, the former CEO of the NTMA, stated that he was reluctant to give deposits to Anglo Irish Bank for a long period before that. Now we have a situation where Irish taxpayers will have a millstone around their necks for the next ten years and beyond to repay €90 billion in debt, €52 billion of which is to recapitalise the banks and €40 billion of which is for NAMA. NAMA was supposed to stabilise the market but it has had the opposite effect. The haircuts are so severe that they have undermined the quality of the loan books in the banks while the international markets are looking on.

The Government's banking and budgetary policies have failed because it did not factor in that the economy must grow and we must have jobs. It is a four letter word - jobs. The Government is very slow to cop on to it.

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