Joan Burton (Dublin West, Labour)

Yes, tomorrow evening.

Recent revelations have added massively to the cost and uncertainty surrounding Fianna Fáil's bailout of its pals, the bankers and developers. So badly has Fianna Fáil's blanket guarantee turned out that the interest rate on Irish bonds, as we have seen today, is now well over 7%. If we stay at this rate, our national debt will double in ten years. We are on an upward escalator the size of Mount Everest. Although ordinary Irish people are taking tremendous hits in terms of cuts in services, extra taxation, pension levies and so on, the amount involved does not come near the actual increase in interest costs that Fianna Fáil and its disastrous mismanagement of the bank bailout and guarantee have brought down on the heads of the unfortunate citizens of this country.

There are two major contributors to the cost of the bailout, as mentioned in the recent announcement by the Minister for Finance, Deputy Brian Lenihan. The bailout IOUs, or promissory notes, give rise to super-sized interest payments, adding at least €1.7 billion to the deficit in 2011, which means that higher taxes and harsher cuts will be needed to meet deficit targets. Many people have been surprised by the rise in the deficit from €7.5 billion to €15 billion. The answer is simple. Most of it - almost all of it - relates to higher interest costs, particularly with regard to promissory notes to Anglo Irish Bank and Irish Nationwide. When he announced this last Easter, the Minister seemed to think there would be no interest charge at all, or else he did not tell us about it. Thus, either he was stupid - which I do not think he is - or he exercised his discretion and did not share his knowledge with the plain people of Ireland.

In addition, the Government has agreed to buy all shares in the AIB rights issue at a price of 50 cent - as announced on black Thursday - even though the shares are trading on the open market at about 35 cent. This reminds me of the purchase of Farmleigh by the former Taoiseach, Deputy Bertie Ahern, in his salad days. It was on offer on the open market at €15 million, but by the time he managed to acquire it the cost, believe it or not, had risen to well over €20 million. AIB shares cost 33 cent, yet the poor unfortunate taxpayer will pay 50 cent per share for them. Of the total €5.4 billion rights issue, upwards of €1.6 billion will be a straight gift to existing AIB shareholders, including the many who took a punt on those shares - hedge funds and private equity funds - when they were floating at the bottom.

Bankers have treated taxpayers as doormats. It is a case of all take and no give. It is time this balance was redressed and the banking sector made to contribute to the cost of cleaning up its own mess and preventing a similar mess in the future. There are two options I will recommend to the Government in this regard. The first is to provide that 100%, rather than 50%, of the cost of financial regulation be covered by the industry, which will result in savings of about €30 million per year, or €150 million over five years. At the moment, the banks, financial institutions and insurance companies pay half the cost of regulation, with the State paying the other half, which runs to about €30 million per year at present. Why should the industry not pay for all of this? Why should the banks and financial institutions not also pay the cost of the Office of the Director of Corporate Enforcement? It is the least they could do, given the billions of euro we have poured into them.

The second recommendation, which would require a little courage and engagement by the Taoiseach and the Minister for Finance, is to campaign for an EU-level financial transaction tax on speculative transactions in derivatives and other types of financial product. Believe it or not, this would raise €1 billion to €2 billion per annum for the Irish Exchequer. However, it could only be done on an EU-wide basis, and therefore our Government should lobby for the introduction of such a tax in the EU. It would help to curb speculation and to document transactions, which is important.

The Taoiseach shed some light on how Ireland is to pay down the IOUs incurred in bailing out Anglo Irish Bank, Irish Nationwide Building Society and EBS when he described the promissory notes - a cool €31 billion - as being akin to paying a mortgage. This is a €31 billion mortgage on Irish households for the sake of Anglo Irish Bank, Irish Nationwide and, in a small way, the EBS. To date, the Minister for Finance has issued €18.88 billion in promissory notes to Anglo Irish Bank, with the issue of a further €6.4 billion to take place before the end of the year. A promissory note for €2.6 billion has been issued to Irish Nationwide Building Society, but the Minister has indicated that this will very soon increase by a further €2.7 billion. A smaller promissory note, amounting to a mere €0.25billion, has been issued to EBS.

These IOUs will total €31 billion by the end of 2010, but that is not the end of the story. The interest rate on the promissory notes will average around 5%, because the interest rate on the day the note is issued is applied. With repayments totalling €3 billion per annum, the total interest charge will add a further €10 billion to €14 billion to the final bill for bailing out the banks. The Minister for Finance must come clean on the interest rate, the term, the annual cost and the total overall cost of paying off these IOUs. We need to see the small print of the "mortgage agreement" which the Minister has signed the country up to.

The use of the word "mortgage" by the Taoiseach in the Dáil confirms the Labour Party's view that these IOUs will generate large annual interest payments in the budget every year for the next ten to 15 years. This makes the target of a 3% deficit by 2014 more challenging and will result in more tax hikes and spending cuts in the Government's four-year plan.

On 8 October, I tabled a parliamentary question on the proposed rights issue to recapitalise AIB. I was concerned that this €5.4 billion transaction, which is to be underwritten by the National Pensions Reserve Fund, could involve an immediate and significant write-down on taxpayers' investment. In his reply to me on 14 October, the Minister confirmed to me that he intends for the rights issue to go ahead at a price of 50 cent, even though the market price has ranged between 30 cent and 40 cent in recent weeks. In the topsy-turvy world of Alice in Wonderland, when, in a market-driven transaction such as this, would one pay 50 cent for a share that is currently trading at 33 cent, with an average of between 30 cent and 40 cent? It is customary for shares to be offered at a discount; instead, the State is taking them on at a premium, which will result in a further loss of €1.6 billion in the State's investment in the NPRF, because the share values will be diluted. The net beneficiaries of Fianna Fáil's largesse will be existing AIB shareholders, particularly bottom-feeders who bought when the shares were very low - including hedge funds and private equity funds - whose investments will not now be diluted as much as they would have been. A further €1.6 billion gift to punters on bank shares may not sound like a large amount to those in the Department of Finance in the context of an overall bailout cost of well over €50 billion, but to put this in context, €1.6 billion is approximately one third of the total budget cuts and tax rises Fianna Fáil has in store in the December budget. The cause is the blanket guarantee that Fianna Fáil, Fine Gael and even Sinn Féin passed in these Houses in September 2008. Had we avoided the blanket guarantee, we could have probably avoided tens of billions of euro in losses that now lie on the backs of the taxpayers.

We must make the bankers pay for the crisis. Even if it takes 100 years as far as I am concerned and as far as the Labour Party is concerned, we will get every cent these bankers have swallowed and that Fianna Fáil has given its cronies in the banks. When these people move away from being in government, we will produce a serious programme for reform and corporate governance that will end the cosy old boys' club that exists between Fianna Fáil, the developers and the bankers.

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