Billy Kelleher (Cork North Central, Fianna Fail)

I welcome the opportunity to debate this issue in the House. The extension of the guarantee scheme for another year was originally announced as a press release in the dark hours of the morning from the Department of Finance. Deputy McGrath has outlined the technical reasons behind it and the importance of this scheme in rebuilding confidence in the banking system. The way it has been announced is an indication that there is much disquiet in Government circles, as it has had to do a volte-face of major proportions.

This debate has been ongoing since September 2008 and it has been a big political football. I accept that there is cut and thrust in politics, but given that this Government has decided to extend the guarantee, in view of all that was said by the Government parties when they were in opposition, it shows that the right decision was made from the start. We had to make sure that we had a functioning banking system and that we were able to build confidence in that system in Ireland, admittedly in a different scenario, following the winding down of Anglo Irish Bank, its amalgamation of deposits with AIB and the restructuring announced in March by the Minister. The announcement by the Minister was indicated by the previous Minister for Finance, who said just before the election that due to the major decisions which had to be made on restructuring the banks, it would be more appropriate for the new Government to make them, rather than the outgoing Government which was vacating office.

This has been a very expensive exercise for taxpayers, but equally it had to be done and it is critically important that we have honest debate in this Chamber on how we deal with the banking system. As Deputy McGrath outlined, it is becoming a source of revenue for the Government to be used in current expenditure this year and next year. While the then Opposition opposed the decision tooth and nail, it has been very quick to spend the money that the scheme has generated now that it is in Government. I am in this House for nearly 20 years and this is one of the most breathtaking U-turns I have ever seen. The then Opposition vilified anybody who supported the guarantee in those very difficult times in 2008, when this country was on its knees and a tough decision had to be made.

Does the Minister actually have confidence in the Governor of the Central Bank? When in Opposition, the Government parties said it was one of the worst decisions ever made, yet Professor Honohan's report quite clearly states that a broad guarantee had to be delivered on that night to ensure the survival of the banking system in Ireland and to ensure that we did not have a meltdown of the Irish economy in 2008. The Labour Party in opposition campaigned vehemently against that proposal and against the idea that we saddle the taxpayers with huge burdens. We did this, but we did it for the right reasons, when we made a very difficult decision to secure and guarantee debt of bondholders and depositors at the same time.

We then heard all about burning bondholders. It was to be Frankfurt's way or Labour's way. Quite clearly, nothing has happened in that respect. I raise these issues because it shows the absolute hypocrisy in the space of ten months. When he was in opposition, Deputy Shatter was constantly accusing the previous Government of not jailing bankers. We assumed that when he became Minister for Justice and Equality, there would be funeral pyres outside Dublin Castle, with bankers and bondholders being burned daily. Nothing has happened. It is very easy to stand on this side of the House and cast aspersions on the integrity of individuals on the other side of the House when they are making very difficult decisions. I am obliged to highlight the absolute hypocrisy of senior Ministers, when we remember what they said from this side of the House and when they were running around the country last February. I do not like saying this, but it must be said, because it was very dishonest campaigning to say the least.

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