Michael McGrath (Cork South Central, Fianna Fail)

I welcome the Minister and his statement. It is significant that he reassured depositors in the first instance that their money is secure because the last thing we want when people see the news tonight is for there to be any further uncertainty on the security of their deposits. I accept that reassurance. That message should be emphasised by all Members of this House.

The main question people watching the news tonight will want answered is whether this is the end of it. Have we finally reached the bottom of the black hole that is the Irish banking system? There have been many attempts to identify the bottom of that black hole and all of us in this House will hope the efforts that have been made by the Central Bank and the Financial Regulator have finally identified the final figure, with the sum total now approaching €70 billion. Given the €46 billion that has already been invested and now a further €24 billion, it brings the overall total for the Irish system to €70 billion, which of course excludes more than €30 billion that NAMA has invested as well in the purchase of the property related loans.

There are a number of significant elements to the Minister's statement this afternoon. There was much grandstanding by the Government parties during the election campaign. We were told, for example, by the Minister, Deputy Varadkar, that not a further cent would go into the Irish banks without burden sharing by all classes of bondholders, and the absence in the Minister's statement of any reference whatsoever to unsecured senior debt is significant. I understand there is in excess of €15 billion of unsecured senior debt across the Irish banks, with a further €6 billion of subordinated debt. There was no mention whatsoever of any effort, which I assume the Minister is making, to reduce the burden through burden sharing in that unsecured senior debt. There was a clear commitment that there would be no further money put in beyond the €10 billion that had been committed without burden sharing among all classes of bondholders. That seems to have evaporated as soon as the parties opposite got into Government.

As Deputy Lenihan stated, there was no reference whatsoever to the promised medium-term funding support from the ECB which is essential if we are to work to a point where we can wean the Irish banks off the lifeline of emergency funding from the Central Bank and the ECB. We need to hear that reassurance. I presume there will be a statement from the ECB shortly in that regard.

The Tánaiste and Minister for Foreign Affairs, Deputy Gilmore, also in a great oratorical flourish during the election campaign, referred to it being Labour's way or Frankfurt's way. Today, we finally have the answer to that. It is certainly the way of the civil servant, Mr. Jean Claude Trichet, and the European Central Bank, who appear to have had the final say on this matter. It seems clear that it is Frankfurt's way, not Labour's way, based on the statement today.

Many working in the Irish financial sector will be concerned tonight about jobs. There has been much reference in the Minister's statement to deleveraging, to shedding assets and to having a smaller Irish banking system with fewer banks, and that can have only one meaning. It can only mean fewer branches in towns and cities throughout this country and fewer jobs in the Irish banking system. The sooner the Government can bring clarity to that situation for those working in the Irish banks, the better. They will be concerned about the future of their own jobs and about the wider issue of the commitment of the State to the Irish banking system. In the early days of the new Government the Minister for Finance, Deputy Noonan, said the debt situation — the sovereign debt and bank debt combined — could become unsustainable. He emphasised the word "could" in response to subsequent questions on finance. In the light of today's announcement that a further €24 billion will be required in capital support for the banks, he should make clear whether the situation has become unsustainable. We need a clear statement on the issue, particularly in the light of some of the emerging economic data, the recent quarterly accounts and the unemployment figures which do not appear to be improving. I look forward to a full exchange with the Minister on the issue next week when I am sure we will have much more time to go into the details.

See this speech in context