James Reilly (Dublin North, Fine Gael)

I welcome the opportunity to participate in this debate. This is a very bad day for Ireland and Irish people. Yet again, as my colleague Deputy Varadkar stated, we have been told we have turned a corner or reached finality. We have heard many metaphors in the past two years but they amount to nothing more than meaningless bluff.

I remind Deputies that the Minister for Finance, Deputy Brian Lenihan, informed the House that the Government's approach would be the most cost-effective way of dealing with the banking problem and we could even turn a profit through NAMA and other measures. We were then told the cost of the banking measures would be €4 billion, a figure which later increased to €10 billion, €20 billion and €28 billion. This morning we were told that Anglo Irish Bank alone, in a worst-case scenario, will cost €34 billion.

The €34 billion must be taken as the minimum final figure because on every other occasion, the worst-case scenario, as enunciated by the Minister for Finance, has been surpassed. This figure does not include the €6 billion required by Irish Nationwide and the additional €3.5 billion announced for AIB.

The Government's banking strategy has cost the country a fortune and ruined the economy. Notwithstanding the Minister's statement that his measures would settle the market and make it easier for Ireland to borrow, it has had the opposite effect, to the point that we have had to withdraw from the market for fear that an auction would fail or the interest rates offered to us would be so extreme as to be unaffordable. What do I mean when I state the Government's banking strategy has ruined the country for its citizens? What it means in hard, cold facts is 462,000 people unemployed, which is 200,000 more than when the Government returned to power in 2007. It means 100,000 people emigrating by next spring, people who are terminally ill being unable to get medical cards and a reduction in the allowances for disability, and all for nothing. It is being done so that all this money can be invested in the banks while the taxpayers and ordinary citizens of this country suffer. Some 2,500 people per week are having their electricity disconnected and businesses are hanging on by the skin of their teeth or their fingernails.

Our health system is in chaos and further chaos threatens. This day six years ago we got a new Minister for Health and Children and there was great hope that the morass of the health service and its lack of reform could be sorted out. Six years later it is worse than ever. That is not the subject we are here to discuss.

As the Fine Gael finance spokesman said, it is more money for the banks and more misery for the taxpayers and citizens. This proves that the Minister's banking policy is in shreds. Notwithstanding what other action he takes, the economy is mortally wounded by this.

When Professor Honohan was asked today if this was the end of the matter, he said it was, at this stage. The qualifier was there. I must share the pessimism of my colleague, Deputy Varadkar. Why would the Government not listen to the Fine Gael position and to the suggestions we put forward? Why, when the guarantee was introduced two years ago, was the House told there was a liquidity problem? The Government must have known it was a solvency issue. Anglo Irish Bank had told the Bank of Ireland only days previously that it was broke. Long before that, knowing there was an escalating crisis, surely the Minister for Finance must have asked his officials, the regulator and others to assess the balance sheets of the banks. It is incredible that the Government did not know there was a solvency crisis and, as such, misled this Chamber into voting for the bank guarantee.

The bank guarantee was too extensive. There were repeated refusals to wind down Anglo Irish Bank and deal with subordinated bond holders. Everyone knows that subordinated bond holders get a premium on their interest rate for the additional risk they perceive they are taking. Any punter knows that when the punt goes wrong, they take the hit. We decided to guarantee everything. There is still money to be saved if negotiations take place.

Deputy Varadkar referred to the deliberate confusion by the Government of sovereign debt and bank debt. Many people on this side of the House believe this is what the Government truly believed and that is why the Government did what it did and made such a mess of things. Equally, there is talk of default as opposed to renegotiation. If it is true that Anglo Irish bonds are changing hands at somewhere between 17 cent and 35 cent in the euro, there is no reason the Minister, the Central Bank and others cannot renegotiate our exposure along that level.

The only way we will get out of this financial morass is with honesty and transparency. While M. Jean-Claude Trichet congratulates us and commends us on our four-year strategy to deal with our budgetary situation and the Government promises to do this, can anyone in this country have any belief in its ability to do it? Will the Government have any credibility in international markets, given that any strategy it devises will not last? The Government will be out of power by March 2011, in my view, but certainly by May 2012. What good is a four-year strategy? What credibility does it have?

Today is a very dark day for this country. It is clear who is responsible for turning out the lights. It is the Fianna Fáil Government and its Minister who blindly followed this course and refused to listen to those on this side of the House and to many other experts who were accused at every step along the way of economic treachery. I remind the Government that the best option open to it, if it truly cares about this country, is to go to the country, let the people have their say and give a mandate to a new Government that can deal with the crisis. After two and a half years, the Government is incapable of dealing with it.

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