Colm Keaveney (Galway East, Labour)

On the subject of denial, I wish to bring to the attention of the House the European funding systems that exist concerning the delivery of critically important services. As regards how we are surviving today, it would be wrong to deny that European funding - from the ECB, the Central Bank and other euro-area central banks - has been a central source of funding for the Irish banking system since wholesale financial markets have effectively been closed to us. This support has been crucial for our survival. The funding is provided by the ECB at an interest rate of 1%. Last Thursday, the ECB announced that funding would continue even if there was a downgrade by the rating agencies. I welcome that support, which reassures markets about the Irish banks' funding position. That commentary was made against a backdrop of a radical restructuring of the banking sector announced by the Government last week. The Government has laid down a marker to protect deposits and ensure that the flow of credit to consumers and businesses will commence imminently.

Last week's announcement will result in a smaller banking sector, which is fit for purpose. Doubtless it will present a challenge but we intend to ensure it is sustainable and less dependent on State support. All these actions are being taken so that Irish banks will be viable and can fund themselves without continued support from the State or the ECB.

The Minister for Finance will travel to Budapest this week to attend an informal meeting of Ecofin Ministers. Among other matters, the meeting will take stock of recent economic and financial stability developments here. I hope the Minister will take this opportunity to brief his European counterparts on these important developments, including last week's announcements on bank restructuring. The Government must continue its approach towards building support among its EU partners for the steps it is taking in this regard, including interest rates being charged by European institutions.

Certain parties are trying to ignore the Government's approach towards ensuring that €12 billion per annum in new lending will be made available for each of the next three years. The Central Bank estimates that only €11 billion to €16 billion will be required by small and medium enterprises in the course of those three years.

I welcome the Minister's announcement that the Credit Review Office will be enabled to build credit in the economy. SMEs will have effective access to funds that are being put into banks, thus getting people back to work and keeping high-street Ireland open for business. We should examine the role of the Credit Review Office. The credit reviewer, Mr. John Trethowan, has said that the potential of a borrower to appeal to the CRO against the treatment of credit decisions, "has, in itself, had a positive influence on the behaviour of these two banking institutions", that is, AIB and Bank of Ireland.

It is difficult to accept ideologically that we must put €24 billion into the banks' coffers, but to borrow a phrase used by other speakers, "We are where we are". The most important thing is to get the flow of credit going in Ireland, in order to secure support for small and medium enterprises. They are prepared to take risks but banks should also be prepared to take risks by funding such businesses. Banks should be prepared to put their shoulders to the wheel for people who are trying to create jobs in the economy. This is critically important for areas that have been devastated by unemployment.

I look forward to hearing the Minister explain how he will verify that the Credit Review Office will ensure the delivery of that €12 billion per annum over the next three years, in order to deliver resources to the local economy.

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