Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I welcome the opportunity to speak to the House today on this very important motion. It gives me and my Government colleagues the opportunity to provide some context for the issues that have been debated publicly or, in some cases, have not yet been debated publicly. I welcome the fact that we are now able to have this debate here and that it can be covered and given the attention this matter deserves. In the time available to me, I want to emphasise to the House how IBRC came into being in the first place. This will be uncomfortable listening for Fianna Fáil. I then want to outline the actions taken by this Government to secure our banking system, which was on the brink of catastrophe, and how stability has been brought to this sector. This will be uncomfortable listening for Sinn Féin and for some on the Independent benches. Finally, I want to express my strong belief that the commission of inquiry will report on these issues in a serious and deliberate way and will bring about the transparency and the clarity that is needed on this matter. I have no doubt that this will be an uncomfortable point for many who are now challenging what the Government is doing.

Let us be absolutely clear about why we are having this debate. During the Celtic tiger period, Fianna Fáil woefully mismanaged the Irish economy. It overspent, under-delivered and failed to properly regulate the sectors most closely associated with them as a party, particularly the banking and construction sectors. This resulted in a light-touch regulatory regime for Irish banks, which in turn led to a banking sector that was grossly out of proportion to the size of our economy. Eventually, that banking sector collapsed on itself. It impoverished many Irish people, it destroyed jobs and it forced many young people, in particular, to leave our country. To compound the problem, the then Fianna Fáil Government introduced a blanket guarantee for the banks in September 2008, a decision that would end up costing the Irish taxpayer, who would become liable for the debts and the obligations of Anglo Irish Bank and Irish Nationwide to the tune of almost €35 billion. That is the context for this debate. That is why we are speaking about the need to protect taxpayers' money, the need to ensure the State got as good a deal as possible, and the need for transparency in the workings of IBRC to ensure the public interest was protected.

After coming into office in 2011 and surveying the wreckage of Ireland then, it is no understatement to say that this Government was charged with rescuing the country. Unemployment was skyrocketing, the era of net inward migration was over and a sense of doom prevailed. The chances of success were estimated by some at nil. However, due to the choices made by the Government and the support of the Irish people, the situation has dramatically improved. The Minister for Finance's predecessor said, "The bank will be managed on a commercial basis at arm's length from the Government, allowing the full potential of the bank's business to be realised." This is the framework under which the bailed-out Anglo Irish Bank, later IBRC, operated. Not satisfied with this, it was this Government that in 2012 revised the framework to provide greater oversight by the Minister, and rightly so. It was this Government that, through its skillful negotiation, restructured the promissory notes, resulting in the liquidation of IBRC in February 2013, removing Anglo Irish Bank and Irish Nationwide from our political and economic landscape. We did this is in the face of a maelstrom from many, who spoke of default and who imagined somehow that we would walk away from our obligations and find another way to pay our public servants. I say this not only to make a political point, but also to make an economic one. Our success in sorting out the banks in a prudent and responsible manner impacts directly on our ability to fund the vital social services our country needs. We have gone from a failed bank to a recovered bank to a liquidated bank, from money wasted in the past by the previous Government to as much money as possible saved by the current Government. Deputy Mathews referred to a 4% growth rate as nonsense. This is the kind of growth that is now enabling communities to begin the steady work of rebuilding themselves, getting more people back to work, and getting our country on the path to better days.

The decision to set up this commission of investigation is the right one. I have been described as many things in this House in recent weeks, but a Keynesian is not one of them. However, I agree with Keynes when he said:

When my information changes, I alter my conclusions. What do you do, sir?

The decision to wind down the review of the special liquidator and establish the commission of investigation has been questioned by some. It is the right response. When issues relating to IBRC first came to light, the Government believed the proposed review was the appropriate mechanism for getting to the bottom of the circumstances at the time.

When further issues came to light, thanks in part to the interventions by Deputy Catherine Murphy, it became clear that a wider and deeper investigation was needed. The Government heard the points that were made about the areas of public concern in regard to a potential conflict of interest. They were considered and we have now put in place a commission of investigation to respond to these points. This is the kind of process and debate that takes place outside the Dáil all the time.

I fully support the actions by the Government and the Minister, Deputy Noonan, in this regard. He admitted that when circumstances had changed, so too would the approach to responding to matters that need to be investigated and discussed. It was the right decision to take and highlights again his exceptional performance as Minister for Finance during what have at times have been horrific circumstances for our country.

I want also to touch on the terms of reference of the investigation. We have had an open-minded approach to setting up the commission of investigation. The Minister for Finance engaged with Opposition parties in this regard to widen the scope of the investigation and to put in place adequate terms of reference. That is because we recognise the need for a thorough investigation. The truth must come out. This must be balanced against constant requests to widen the terms of reference. There is something incongruous in hearing Deputies complain that the commission of investigation will not report by a certain time while at the same time asking for it to investigate more and more material.

We must also recognise the independence of the figure who will lead this work and allow them the scope to determine in an independent manner how they wish to conduct this inquiry. It is clear that the greater the transparency, the better. The more light that is shone, the better. That way we learn lessons and avoid repeating the mistakes that have cost our country so dearly.

I do not know what the outcome of the commission of investigation will be. That is one of the reasons we need this kind of process in place - to respond in an impartial and independent manner to issues that are of concern to the public and to taxpayers. I echo the statement by the Minister, Deputy Noonan, that there is currently no proof of wrongdoing. I also echo his remarks that in response to points and concerns that have been aired, it is now appropriate to handle this very important matter in this way. This is a response, and many of the actions of the Government have been a response to situations and challenges that we inherited. However, we are also clear that the relationship and the work that took place within our banking sectormust be examined and investigated. That is why we have supported the Oireachtas banking inquiry, which is doing important work. It is also why, in response to the circumstances and points that have been made about an area of interest, the Government has put in place a commission of investigation.

The banking collapse has left a deep economic scar on our country. It has taken much time and effort to respond to it. The putting in place of a commission of investigation by the Minister, Deputy Noonan, is the right and the needed response to a matter that is of concern to the public, which will allow these matters to be dealt with in an independent, impartial and rigorous manner.

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