Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)

The Minister made an amazing suggestion yesterday that the Government's banking policy was a success because Bank of Ireland's share price had risen in the aftermath of its announcement. What planet is the Minister living on that he thinks rising share prices in Bank of Ireland mean anything to the vast majority of people in this country who are suffering brutal costs, have lost their jobs and are struggling to make ends meet? That view is absolutely extraordinary but it is also indicative of the mindset of the Government and the twisted priorities it seems to have inherited from its predecessor.

The Minister also said that the objective of the bank restructuring proposal was to recapitalise the banks in order to restore credit to the economy. That was the justification for providing an additional €24 billion to bail out the banks, bringing the total recapitalisation cost to €70 billion. This excludes the €25 billion for NAMA, which brings us close to €100 billion. I ask again what world the Minister is living in. The €46 billion already provided has not resulted in credit flowing into the economy. What makes the Government think the provision of a further €24 billion will have that effect? It is clear that the priority of the banks is to make profits and to restore their balance sheets. They do not give a hoot about the economy or jobs. That is not what they are there for. They are there to make profits and they do not consider it profitable to invest in the economy according to social need or the requirements of citizens.

Nor will this plan work in the future no matter how good the balance sheets of the banks, because the other side of the coin is the IMF and EU demands for austerity and cutbacks which are savaging the incomes of ordinary people. The banks are not lending because there is no demand in the economy as a consequence of the savage cuts in incomes. People do not have money to spend and the businesses in which they formerly spent money are going out of business. Why would the banks, recapitalised or not, lend money to those businesses? They will not do so because they are in the business of making profits and they are not fools. Seeking to restore demand into the economy and at the same time imposing austerity on ordinary people means we are moving in opposite directions at once.

The Minister also heralds the shrinking of the banking system down to two pillars and suggests this is an indication of the success of the new policy. It is not new policy; it is exactly what the former Minister, Deputy Lenihan, said he would do, at the diktat of the EU and IMF. The only likely result of that will be major job losses for ordinary bank workers. It is certainly not a new departure and it offers no great hope for people that the issues arising from this crisis will be resolved.

The madness goes beyond that. As part of this radical restructuring we are selling off the profitable portions of the banks. We are putting €24 billion into zombie banks in order to pay off bondholders while the profitable arms such as Irish Life, which made profits of €160 million last year and employs 1,000 people, are sold off. Why do we not retain the profitable sections which are generating revenue that could assist the finances of the State?

The alternative is to repudiate the bad gambling debts of bondholders and bankers. We are in debt because we have put on the shoulders of ordinary people the gambling debts of private financial institutions at the behest of the EU and IMF, which are seeking to protect their banks. Why are we protecting their banks at the cost of ordinary people in this country? Let us repudiate those debts. Instead of using the National Pensions Reserve Fund to bail out the banks we should use it for its intended purpose, as a rainy day fund to assist when the economy is in trouble by investing in jobs programmes, restoring demand in the economy, creating employment and reviving economic activity. Let us have a State banking system that does not take responsibility for private gambling debts. Such a bank would be viable and able to access credit on the international markets. It is the madness of taking on the private gambling debts of bankers and speculators that is sinking our economy. It is a tragedy that this Government is continuing down the same insane path as the last Government.

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