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

The move to establish a strategic bank is a very long overdue recognition of the failure of the banking and wider economic strategy employed by this Government and that which preceded it in the aftermath of the economic crash. We bailed out the so-called pillar banks to the tune of €64 billion, privatised some of them and beggared the country in the process. The rationale behind doing so was that we needed these banks. The attitude was, "We do not like it but we need to do it because the main commercial banks are critical to economic recovery". Three or four years have passed and we now realise that this just did not work. We gave the banks all the money they required and they continued to act as a law unto themselves. They do not give a hoot about the State's rationale. They only have one rationale, namely, to make money. Their balance sheets constitute the bottom line. The strategic priorities relating to our economy and the needs of citizens are irrelevant to the banks. As a result of the realisation that has been reached, we are now obliged to set up a strategic bank.

One could say it is better late than never and that at least we are doing this now. However, having made the decision to introduce legislation to facilitate the establishment of the new corporation, the Government has imposed a guillotine. We are whacking through this Bill in one day. In the context of anything discussed in the Dáil, this legislation is extremely important by any standards, particularly as it will have far-reaching implications for our economy's capacity to recover. The Bill contains provisions which will give the Minister for Finance power to guarantee up to €4 billion in investments by foreign entities without having to have recourse to the Dáil. That is extraordinary. Despite the damage done by the blanket bank guarantee, the Minister will have the power to issue a guarantee without being obliged to discuss the matter in the House.

The art of political distraction currently being practised with mastery by the Government is amazing. What are we discussing while this Bill which involves bank guarantees and strategic investments and is the result of the failure of the Government's banking strategy is being whacked through the Dáil by means of the use of the guillotine? The answer is Garth Brooks and the drama of the Cabinet reshuffle. People have been speculating as to whether the latter would take place on Tuesday, yesterday or today and whether Phil or Eamon will be appointed as Ireland's next European Commissioner. They are also anticipating the press conference to be given later today by Garth Brooks. That is just extraordinary. What the Government is doing is on a par with the distraction tactics employed by the Roman emperors, namely, give them bread and circuses while the real business is taking place. The media, of course, go along for the ride, which is absolutely pathetic.

The headlines on RTE and in the media are all about Garth Brooks while something substantial like this Bill, which is about the economic future of the country and a belated recognition of a failed economic and banking strategy, is going through. At least we are beginning to address it but there are major problems or gaps in this legislation because it is being whacked through, or, perhaps, the Minister is whacking it through with the these gaps and problems because he hopes everyone will be looking at Garth Brooks and the summer holidays and, therefore, we will not be looking at the deficiencies of the Bill and the issue of the guarantee.

It is good that there is a focus on small and medium-sized enterprises. I welcome this although it is a pity the Minister will not do all the other things that the SMEs have been asking for. It is a pity the Government is not doing something about the rates system or public contracts, which are going to multinationals all over the place instead of small and medium-sized enterprises and benefiting local economies. It is pity the Minister does not do something about the disaster of parking charges and so on. Unbelievably, the Comptroller and Auditor General wants to spread the disease of parking charges, which has blighted Dún Laoghaire's small and medium-sized enterprise sector, over to Howth and other such madness.

At least we are talking about prioritising SMEs. The banks have singularly failed to help them, although that was supposed to be the purpose of the billions of euro we poured into those banks. Why is this strategic bank not dealing with other areas? KfW, the German strategic bank that will be investing in this bank has a far wider mandate than the mandate proposed for this bank and, crucially, it includes housing finance. This week the Joint Committee on Finance, Public Expenditure and Reform and all the organisations dealing with the mortgage distress have all said the insolvency legislation is failing abysmally. They indicated that the banks have refused to engage properly with the mortgage arrears process. There are 136,000 households that are financially crippled and, consequently, unable to participate fully in the economy or help it recover because they are in mortgage distress. The banks are not interested in them or in the impact that their situation has on the wider economy. Why is this bank not going to deal with that area? Distressed loans should be transferred. The loans of people who cannot get a decent deal from the banks should be transferred to this State strategic bank and it should give them a decent a sustainable mortgage arrears resolution for their situation. I have tabled amendments to the effect that the mandate should be widened at least as far as that of KfW, which the Minister is proposing as a co-investor in this bank.

The problem is similar with the issue of housing, which, we know, is an absolute disaster. We have seen hand-wringing from the Government on the issue of housing but no concrete action. The key issue is that the banks are not interested in financing the type of social and affordable housing that we need, yet here is an ideal opportunity for that to be done. This bank should have addressed housing as part of its mandate, just like the American Federal Reserve. The issue of housing is critical. Financing social and affordable housing is in the interests of citizens and vital in terms of the macroeconomic stability of the economy and the wider housing market. This should be one of the key priorities and imperatives in any strategic bank but it is not included.

I will be dealing with the guarantee in the amendments later. It is absolute madness. At the very least the Minister should accept an amendment that will require any bank guarantees given to KfW or the European Investment Bank to be examined. It seems we have to bribe these banks with guarantees although this country has been bled dry by Europe with the debt interest repayments. We must bribe these banks with bank guarantees for them to invest into our economy. It is not acceptable.

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