Frances Fitzgerald (Fine Gael)

I welcome the opportunity to take part in this debate. We are, however, having it in somewhat unreal circumstances in so far as the Minister of State had to come in and give a presentation that did not address what is happening today and was unable to address the decision that has been taken by Government or go into detail on the reasons for it because the legislation is being published this evening. We do not have the details of the legislation and are not addressing the crisis of the day and the decision apparently taken at 2 a.m. or 3 a.m. last night. It was not necessarily a brave decision but was an essential one forced on the Government by the potential of catastrophic circumstances and a catastrophe in our banking sector. If our banking sector collapsed, that would have a catastrophic effect on our economy and result in the appalling outcome of hundreds of thousands of unemployed people.

We do not know if the decision the Government has made will be the solution or will deal with the situation. The amount in question, €400 billion, is a significant sum and we must hope it will inspire confidence. Confidence is a moveable feast in the economy and in banking and is affected by a range of factors. We do not know by what factors confidence in the Irish economy will be affected but we must hope this decision will give the kind of confidence that will lead to economic growth.

I wish the Government had listened to many of the suggestions made by Fine Gael over the years. I want to put to bed the suggestion we did not offer alternatives nor suggest a range of initiatives that would be positive for the economy. We did so on numerous occasions. I have heard calls today for support from the Opposition. We will be responsible in the current situation. We want to support our economy and do not want to see it collapse because of the situation in which the banks find themselves. We will give our support in a guarded way, however, and will raise the key questions that need to be raised.

Many questions arise from the Government's decision, not least of which is what happens to the banks not included in the agreement? What impact will the decision have on Ulster Bank and the other banks? Will the Minister of State address that issue and explain how the Government intends to deal with it? It is a key issue. Many people are employed in those banks and confidence in them must be maintained. How will that be done? Will the agreement or decision the Government intends to put forward in legislation tonight be compliant with EU competition law? There are serious questions in that regard. What will be the response of the EU to the decision that has been made? What is the total exposure to the Irish taxpayer as a result of the guarantee to the banks?

The €400 billion amounts to approximately €250,000 per citizen of an underwrite to the banks. People are very concerned about this and these figures are extraordinary to the ordinary man or woman in the street. As far as they are concerned, they see a banking sector which has behaved disgracefully in many instances now being underwritten. We all understand the reason for this; it is essential for our economy. Make no mistake, however, about what ordinary people think about it when they see their sons or daughters landed with a 30 or 40-year mortgage on property bought at an inflated price and who are now in negative equity. They will not feel very happy about this underwritten guarantee to the banks. We can understand the reason they would not be happy. They may understand the greater good that may come out of it but they certainly will be sceptical when they see the amounts bankers were paying themselves, the rewards that were given and the type of lending and trading in derivatives that took place. There is an understanding that we must keep our economy going and this seems to be the price to pay. However, it is a high price for Irish taxpayers who are entitled to ask what returns they will get from the arrangement.

It is crucial for us to know the regulations and financial oversight which will be put in place because it is clear, as speakers on the Government side have acknowledged, that the oversight and regulatory regime has failed completely. The people who had responsibility for this ought to be called to account. What new arrangements will be put into place and what guarantees will the Government receive? What sort of monitoring will be conducted on behalf of taxpayers subsequent to their underwriting of this enormous sum of deposits? These are key questions. There is an onus on the banks to ensure their behaviour is prudent, measured and considered. Reckless borrowing and derivative trading must become a creature of the past. How will taxpayers be protected?

I spoke on the Order of Business about a meeting in St. Bridget's school, Palmerstown, which I attended along with hundreds of parents. For the past ten years, this school has sought funds for a refurbishment and an extension. The pupils attend the school in the most appalling conditions imaginable. Thus far, €300,000 has been spent on prefabs and €350,000 on architectural fees for the planning application. The building is ready for redevelopment and the children have moved into the prefabs. It is difficult to believe that any child in this country must endure the sort of conditions experienced by St. Bridget's pupils, yet the school did not receive funding yesterday. There has been no clarity as to why that school was left out whereas 15 others were given money for refurbishment. I raise the issue in the context of this economic debate because I ask what impact the bail-out will have on the services we want to provide in our schools and hospitals.

Fine Gael made a variety of suggestions on how this Government ought to have behaved over recent years, which we published in a document entitled Recovery through Reform. Senator MacSharry stated earlier that we have not put forward alternatives, an accusation which I want to bury.