Shane Ross (Independent)

I thank Senator Quinn for sharing time. We have debated this issue in various forms, on various occasions and at some length. The motion represents an opportunity to mark time. I agree with Senator Quinn that it is not helpful to harbour resentments about the past. The problem is that the Government does not recognise the nature of the crisis with which we are faced. There is a worrying pattern here. Given that the Irish banking system had only a minimal involvement in sub-prime lending, we cannot hide beneath the international umbrella and blame that for our current difficulties. The reality is that many of our problems are home grown.

The alarming and continuing pattern indicates that the Government is not taking control of events. The guarantee that was given at the end of September was a response to the banks putting a gun to the Government's head and warning it that fire and brimstone would erupt the following morning if action was not taken. The provision of the guarantee may or may not have been the correct action to take. Likewise, the decision to nationalise Anglo Irish Bank represented the forcing of the Government into an action to which it was initially opposed, as it made clear. The recapitalisation move was part of the same pattern in that it was not the first choice of the Government.

Now there is clearly a serious possibility that the two largest banks, Allied Irish Banks and Bank of Ireland, may also be nationalised. As the Minister for Finance has said, this will only be done as a last resort. It is clear from the Minister's remarks on "Drivetime" yesterday and those of the Tánaiste and Minister for Enterprise, Trade and Employment today on "Morning Ireland" that recapitalisation is close to failing and that the next step will be nationalisation of the two largest banks. If that happens, it will, once again, be a case of the Government, instead of proactively taking steps that are necessary, being forced to do what is necessary by events and international markets.

I was in the city of London on Monday and spoke to people who had investments in Ireland. What they said about the state of the economy and how it is being run and the state of the banks is unprintable and I do not intend to repeat it, even though I may do so under privilege in this Chamber. It might be damaging to do so because it is the view of these responsible investors that this economy is heading for the rocks and that the Government is in denial.

As I said, the pattern is that the Government waits until it is pursued before responding. We need something more proactive. The Government must recognise the problem and instead of taking the minimalist approach, being merely the target and victim of events, it must, to some extent — but not to a total extent; I acknowledge that is not possible in a global market — take charge of events. I dread to wake up tomorrow morning or the morning after to hear that the Government has decided — which will mean it has been forced — to nationalise the two major banks. However, I suggest this is very likely to happen. It will not be a voluntary or proactive move by the Government but, once again, an action of last resort. This type of pattern offers no confidence to international observers. It suggests the Government is not in control of the economy and not confident enough to take the necessary steps.

It is unfair to blame the Government entirely for the current difficulties. The Government is full of people who are without experience of this or any other such crisis. Bankers must take a large portion of the blame for living in denial for so long and hoodwinking the people, the Government and the regulator. Likewise, the Financial Regulator must take its share of responsibility. It is an absolute fiasco when the regulator is making inquiries into a situation in which it is directly involved and almost undoubtedly culpable. One cannot expect international investors or any objective analysts or observers to have faith in the financial behaviour and economy of a country where the regulator is culpable and intends to issue a report exonerating itself. Despite it all, that is what will happen. This is the desperately damaging situation in which we find ourselves. The buck stops with the Minister of State, Deputy Mansergh, the Minister, Deputy Lenihan, and the Taoiseach. It is high time they at least gave the impression that they are in control of events instead of vice versa.