Pat Rabbitte (Dublin South West, Labour)

Black Thursday, and all that went before it, threatens to undermine Ireland's economic sovereignty. In 1997, a Fianna Fáil-led Government inherited an economy that was in pristine condition. Some 13 years later, a Fianna Fáil-led Government is pleading for bipartisan co-operation in order to keep the IMF wolf from the door. What has happened in this country represents a scale of collapse not experienced by any other western democracy.

The Labour Party will make common cause with the Government in seeking to ensure that it will not be necessary to make application to the European financial stabilisation fund. There is a definite prospect that if this country is forced to seek external assistance, it will come with very severe strings attached. Ceding economic sovereignty is not in the interests of our people. The Labour Party consented to the parameters agreed – prior to Black Thursday – with the European Commission, including last year's budgetary provision to take €4 billion out of the public finances. We committed to making savings of a further €3 billion in the forthcoming budget. There is no precedent for a similar gesture on the part of Fianna Fáil on any matter of policy when in opposition. However, the goalposts have changed again. The nightmare cost of the bank bailout has placed additional pressure on the Government and exposed how vulnerable we are to outside intervention.

Members of the public are punch drunk and are trying to figure out how the country should find itself in this position. How did our Government allow this happen? Why did the Government, in light of the advice available to it, make the decision it made on the night of 29 September 2008? Who advised the Government to give a blanket guarantee? Why did the Government make no intervention between the collapse of Northern Rock and 29 September 2008, a period of more than one year? Why did the Government take no action after the collapse in the value of Anglo Irish Bank shares six months prior to 29 September 2008? How is it that the Government could still claim after the collapse that there was no solvency problem in the Irish banks? Why have the figures that have been drip fed to us by Government since the collapse invariably been wrong? These figures have not just been wrong, they have been wrong by a mile? Why did it take so long to drag the true financial picture – if it is the final picture – from the banks? Why have the banks on the neighbouring island returned to profitability, one by one, while our banks remain paralysed?

A journalist who appeared on a programme late last night complained about my party leader raising a question last week with regard to the solvency of the banks. The journalist in question stated that this was an old story. It is not an old story. My party leader's question was posed in the immediate aftermath of the "Freefall" programme, which was broadcast on RTE and which highlighted the fact that representatives from Anglo Irish Bank had approached Bank of Ireland and Allied Irish Banks plc confessing that their institution was insolvent and requesting that one or the other take it over. The question Deputy Gilmore put to the Taoiseach was both timely and necessary, particularly in the context of establishing whether the Government knew Anglo Irish Bank was insolvent.

The entire purpose of NAMA was to strip out the toxic loans, recapitalise the banks and restart the flow of credit to business and households. Two years on, this has not happened. I was approached yesterday by representatives from a company based in the United States which had a request for €90,000 in credit to allow it to establish a facility here turned down by one of the main banks. I have passed the information relating to the case on to the Minister.

The contributions to this debate and to that relating to the extension of the ELG scheme from Fianna Fáil Members have been characterised by two themes: first, attack the Labour Party's refusal to give the blanket guarantee a blank cheque; and, second, take shelter behind the new Governor of the Central Bank, the first non-Fianna Fáil public appointee in 13 years. If Fianna Fáil is so insistent on the canonisation of Professor Patrick Honohan, why did it not appoint him Governor in 2001? It is likely that if Professor Honohan had been appointed in 2001, the appalling dereliction of duty that contributed to the calamity that has befallen us would have been largely avoided. Unfortunately, Professor Honohan's sagacity was only recognised in hindsight. Why was he not consulted after the fall of Northern Rock and before the fateful night of 29 September 2008?

Fianna Fáil hangs on for dear life to misrepresenting the Honohan report. All the Fianna Fáil BlackBerrys have been programmed to read "The Honohan Report endorses the blanket guarantee". Of course, it did nothing of the kind. The Honohan report concluded that by 29 September 2008, some form of guarantee was inevitable. No one disputes that by that fateful night, some form of guarantee was necessary. The question is what happened between the fall of Northern Rock and 29 September 2008, a period of more than one year?

What Professor Honohan states in his report is remarkably blunt: "No other country had introduced a blanket, system-wide guarantee". We have been told by Fianna Fáil speakers in this House there are 43 other countries with a blanket guarantee like ours.

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