Michael Noonan (Limerick City, Fine Gael)

However, there is one thing that should be said in the House. We will deleverage down to a point at which there will be headroom for further borrowing. Such a proportion of bank borrowing at present is dedicated to the construction and development industry that it crowds out all other lending. If we can do that, we will create the headroom. What is built into the model is sufficient headroom to provide €12 billion of credit each year for the next three years. This is more than the Central Bank estimates the economy will require on very optimistic projections. As Deputies know — Deputy Wallace and others will know in particular — if credit is available, it creates its own demand. Thus, when one is estimating credit, if one provides a quantum and the business community knows it is available, the demand will be driven up by the very fact of its availability.

The significant message is that the announcements this evening are about reconstructing an Irish banking system built around Bank of Ireland, AIB and EBS.

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