The guarantee scheme proposal put forward by the Fine Gael Party has merit in principle but only on a limited basis. It would have onerous conditions because ultimately, the taxpayer will be at the end of the hook. The burden will need to be shared between the institutions and the State and if the scheme were to be implemented it would have to be linked directly to the creation of employment. For example, a State loan guarantee would not be extended to a business applying for additional working capital but only in the case of a project that would directly create additional employment. That is what we all want to see. We must recognise how exposed the State already is to the banking system and take a responsible and cautious approach to becoming involved in any further guarantee initiatives, although there may be scope for it on a targeted and limited basis.

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