Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

The House will be aware that agreement has been reached with some of the main public service unions. The negotiations were led by the Minister for Public Expenditure and Reform, Deputy Brendan Howlin. As we move towards the point where the agreement will be put to a ballot among the membership of the unions, they should be given the space to consider it without advice from this House, helpful or otherwise. The unions are well able to conduct their business and should be given the space to make their decision.

There are certain similarities between the situation in the banks and public services. If one owns 99% of a bank, as the State does in the case of AIB and PermanentTSB, parallels can clearly be drawn. The Mercer report which was published last Tuesday was not hanging around for two years. It was commissioned mid-year and we brought it forward rather quickly. Its publication was accompanied by a statement that the banks would be required to reduce their payroll costs across the board by between 6% and 10%. That is in the same space as the requests negotiated with the public service unions. It is moving on again and we will ensure these targets are reached. It is important that the cost base of the banks be cut because the ones with a majority or almost a total State shareholding are not yet profitable. If we are to restore the banks to normality, they will have to be become profitable. If they are to give the credit lines necessary to households and SMEs and support the economy, they must at least have the potential to be profitable.

Bank of Ireland is in a different space. The State has 15% of its shares. As a private bank with a minority State shareholding, we do not have the same direct influence over it. As a shareholder and in accordance with our weight, we make our views very clear. The 6% to 10% reduction in payroll costs is applicable to Bank of Ireland, as well as to the other banks.

See this speech in context