Ciarán Cannon (Progressive Democrats)

I welcome this opportunity to speak on the decisive action taken by the Minister for Finance in moving to restore confidence in the banking sector and, in particular, to improve liquidity. We cannot expect Irish business to be able to flourish in an environment where there is no liquidity and where banks would have no choice but to turn off the taps on entrepreneurial effort. The Government has made a decisive move that will give Irish banks AAA status internationally and, moreover, access to cheaper funds.

The US sub-prime crisis is not the fault of anyone — the Government, the banks or the people — in this country. It has led to an international credit crisis that has obliged our banks to operate in an extremely difficult environment. Those banks could not have continued to trade in such an environment without the support of the Government. The support we are offering will allow them to leave credit lines open so that people can continue to secure business loans, mortgages and car loans — the kind of credit needed to keep Ireland in business.

Let us be clear that our plan is fundamentally different from those of the US and the UK. Unlike the US, we are not wiping out bad debts or buying up toxic loans; we are simply allowing the State to act as guarantor on Irish banking credit for the next two years. We are not following the UK model of nationalising one bank after another while the entire banking sector suffers death by 1,000 cuts. We are concerned with restoring confidence and getting the economy moving again.

In the past 48 hours, global financial analysts have acknowledged the model we have chosen as an elegant solution to the crisis of liquidity and one which could pave the way for action on the part of other nations experiencing similar problems. This evening there are indications that some other EU nations are moving in the same direction as Ireland. The Financial Times described the Government's action as the Irish solution to a global problem.

A key element of the plan is that the guarantee is not being given freely to the Irish banking sector. It is being given on commercial terms and the banking sector will pay for it. The guarantee is being provided at a charge to the institutions concerned and will be subject to specific terms and conditions so that taxpayers' interests can be protected. Furthermore, as a result of this legislation, the Minister for Finance will have far-reaching powers to intervene in the banking sector when he believes that a particular bank is acting irresponsibly.

During the past 48 hours, we have shown an example to the world of how to act decisively. We elect the Government to govern and that is what is happening here today. I congratulate the Minister on his courage and decisiveness. I urge him to continue in this decisive vein during the coming months. That same approach is needed to keep Ireland in business and, more importantly, to ensure that it is in pole position when the global recovery begins.

I was heartened to hear the words uttered yesterday by Senator Quinn, one of the most successful business people of his generation, when he referred to the challenges we face. The Senator stated:

This is the very time to do something dramatic... This is the very time to be courageous and to have a belief in the future and to say we can do something about it.

The Minister, Deputy Brian Lenihan, might not agree with me when I say that he is most fortunate to be in the position in which he finds himself. He has been presented with the greatest opportunity of any Minister for Finance in the past 20 years to make the kind of sweeping reforms this country urgently needs. It is the difficult situation in which we find ourselves which gives him the real licence and authority to push through the type of changes that will allow hard-working and enterprising people to put Ireland at the very top of the global premier league.

The Minister has begun what I hope will be a swift and effective programme of tough reforms. In March 2006, Michael Dell summed up the relationship that exists between Ireland and the multinationals when he stated:

I don't think it's coincidence that Ireland and Dell share the same character and connection. Every success we've achieved around the world has been due to the old Irish recipe of big dreams, hard work and strong relationships.

In October 2008, we are faced with the real possibility that Michael Dell and many others no longer believe in Ireland as a place to do business. We must ask ourselves why that is the case. It is time for us to once again dream those "big dreams" and do what is right to achieve them. The people will, in large numbers, support the person and the Government that has the courage to make the tough decisions required to secure our children's future. The time is right for such decisions and they must be made now.