Brian Hayes (Dublin South West, Fine Gael) | Oireachtas source

I thank my colleagues for their contributions to the debate. In the five minutes allowed to me I will reply on some of the issues raised.

I recognise the appalling circumstances in which the country has found itself because of the reckless lending policies and arrogance of the banking sector over a generation. Many in the House today were, in their own way, cheerleaders for that arrogance and some of the well known personalities who fronted that arrogance over a generation. Of course, they have changed their position because the popularity stakes have changed.

The task of the Government on entering office had two dimensions, the first of which was to correct the appalling deficit of fiscal mismanagement by the previous Administration having been in power for 14 years. The second was to create the conditions in which the economy could grow again. In this regard, it is essential to have a banking system that is trusted by the people. Since we cannot say the banking system is trusted by the people, owing to the collapse brought about by the banks, we must take incremental steps to get the country into a better position. The Government stands over the decisions it has taken. The first decision it took on entering office was on further bank recapitalisation, built on the pillar banks. This is evident from a statement issued to the House in March 2011 by the Minister for Finance. There has since been a significant improvement in respect of the banks and the new banking culture we want to have instigated in the State. In the first instance, we have seen money coming back into the banks. I am not over-egging the pudding or suggesting there has been a radical inflow of money from international markets into the Irish banking system because that has not happened. However, there has been a slow, consistent inflow of moneys into the banking system to stabilise the banks. Deposits have stabilised. News on AIB this week indicates that, independent of the guarantee, €500 million was raised in three year bonds and that they were four times oversubscribed. The announcement on Bank of Ireland two weeks ago showed that, independent of the guarantee, the bank was able to obtain money in the international market. There was no chance that this could have happened two years ago or last year.

Our ambition in asking the House to accept the extension of the ELG scheme is to ensure it is brought to a swift conclusion next year. Will those who are criticising the two Government parties today support the Government when the scheme comes to an end? The bringing to an end of the guarantee, more than anything else, will be an example to the country, the banking sector and the international markets of our putting our house in order and changing the dynamics of the Irish banking sector. In asking colleagues to support the motion our objective is to exit the ELG scheme at some point next year. This would be an example of normalisation and Ireland making further progress in rebuilding the tattered banking system the Government was left to clear up. If we are to make progress, we must have a totally new banking system. That is why we put our store in the pillar banks. We got rid of the directors. It is also why the new banking unit in the Department of Finance is leading bilateral discussions with the banks and the Central Bank on a daily basis.

That is why the Taoiseach, Tánaiste, and the Ministers for Finance and Public Expenditure and Reform have been in direct negotiations and discussions with the banks about their commitments. They gave us a commitment when we set out the new strategy in March 2011 that, over a three-year period, €21 billion would be lent into the economy to help SMEs and to help existing businesses restructure their debt. We will hold them to those commitments because they have been recapitalised by the taxpayer.

The objective is to bring this guarantee to an end and to get the banks out of the accident and emergency ward we found them in when we took up office and to get our money - the €64 billion colleagues referred to - back from them. I agree with those who say competition is needed in the banking sector. It would be good if banks from other markets competed in the Irish market but that will only happen when we get to a more normal arrangement when the guarantee ends. The ambition of the Government and the banking sector is to enable banks to move to a more profitable position.

Deputy Boyd Barrett argued for default. He is correct that 20% of the taxes we will take in this year will go to paying the national debt. He says we should not pay that debt, that we should default on it, as some of his descamisados in Argentina did, and take the consequences of that. He should not forget that the Argentinian Finance Minister said that when Argentina did that this, one quarter of the population went hungry. That is what he wants to bring down on the Irish people in the context of that crazy, mad man strategy of defaulting. We can get this country to a better place. It requires determination on the part of the Government to correct the deficit but also a new banking culture. The ambition of the Government is to exit the guarantee next year and, hopefully, that will happen. That will be another example of weaning the banks off taxpayer's money and putting them on a profitable trajectory into the future in order that we as taxpayers can get the money back that we put into them.

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