Brian Lenihan Jnr (Dublin West, Fianna Fail)

This Government has made a virtue of suggesting that it has some moral superiority in this area but on Saturday last we were informed in The Irish Times, clearly by Government sources, that this emergency €60 billion scheme for Irish banks would be introduced in parallel with today's announcement. There is no reference to it in today's announcement.

I wish the Minister well and hope he, the Taoiseach and the other Ministers involved can progress their discussions with the Commission and I am sure the Governor is doing his best with his colleagues on the governing council of the European Central Bank, but it is important to note that, despite the clear flagging of this, and it was flagged subsequently in various Sunday newspapers, it has not happened. According to that article:

The plan would see the ECB replace a short-term funding scheme known as the Exceptional Liquidity Assistance (ELA) programme with a new medium-term liquidity facility tailor-made for the Irish banks. Banks use liquidity to fund their day-to-day operations.

We know that well. However, that has not happened. The Government flagged it would happen; it has not. It has not been announced this afternoon.

In other articles it was suggested that Ireland needs to persuade the EU-IMF to agree a lower pace of bank deleveraging, and I agree with that. That was one of the main objectives of our diplomacy in our final few months as well. From what the Minister stated this afternoon, he has made a little more progress on that front, which is an important front on which to make progress, but I would prefer to see more definitive progress on it. Clearly, we cannot have a fire sale of assets in the Irish banking sector. That would accelerate losses to a degree which we cannot contemplate.

Of course, the burden of the programme for Government was that NAMA had crystalised losses. That was losses in transparently devalued assets in the property sector. What we are looking at here is a crystallisation of losses, not in the land and development category but in the home ownership category and in the category of business lending. That crystallisation will impose a significant additional burden on the taxpayer. Given that we are talking today about stress testing in the banking sector and home purchase, it is extraordinary that the Government has announced no initiative in parallel on the protection of home owners. In fact, the promise to deliver mortgage interest relief within 100 days, which had a decisive impact at the doorsteps when unveiled by Fine Gael, is not being implemented in the first 100 days and has been deferred for consideration to the budget which will be introduced later this year. That, of course, had to be done because the existing incentives for persons to purchase houses and avail of mortgage interest relief must be kept in place to breathe some life into the first-time buyers' market. I made that clear during the election campaign and I am glad the Minister has now accommodated himself to the policy of the previous Government in that regard as well.

I really do not wish to be churlish in any way to the Minister, who has had a baptism of fire in this particular area and whom I wish well in his exertions, but it is important in our dealings with the European Central Bank to realise this is an autonomous institution. It is not an institution which is subject to direction or megaphone diplomacy from national governments. It must be dealt with in a certain way if we want to make progress with it, and I do not see much evidence in last weekend's newspapers that it was dealt with in that way. There is an absence of any announcement on ECB support in this statement. That troubles me. It is important that we get that statement as soon as possible because we need that confirmation of the lender-of-last-resort capacity of the central bank and assurance that in this part of the eurozone, where we are expected to make very substantial sacrifices to protect the integrity of the zone, the central bank stands firmly behind us.

We also must note in today's announcement that the only burden sharing envisaged in the Minister's statement is that provided by this House and by the previous Government in the legislation enacted before Christmas, namely, the burden sharing on subordinated bondholders.

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