Paddy Burke (Fine Gael)

I welcome the Minister back to the House and am glad to have the opportunity to speak on this issue. I support the recapitalisation of the banks. It is proper and fair that we have a strong banking sector. We need banks that will go down the road with a person who is willing to take a chance. Thus, we need strong banks and we need them to take chances on people. After all, self-employed people who are willing to invest and take a chance are living on their wits and they need strong banks behind them that are also willing to take a chance. That is why I support the recapitalisation.

Senator Hanafin said it was only right that the National Pensions Reserve Fund should be able to invest in our own country. This is true. Deputy Michael Noonan proposed this about seven years ago and I am delighted Fianna Fáil has now come around. The NPRF should invest in this country and if this had been arranged when Deputy Noonan proposed it, much of our infrastructure would now be supported by the NPRF. It would now be getting quite a return on its investments. It may well have purchased the toll roads, for instance. I support this measure and I am delighted to see the Government has come around to that way of thinking.

We need to spell out in simple language what is taking place and how the Government is recapitalising banks. The public is muddled about whether the Government is taking shares and what type of shares they are or whether the NPRF is investing money in the bank on behalf of the Government and getting a return of 8% annually. The Minister of State said in his speech:

Under the National Pensions Reserve Fund Act 2000, the commission is precluded from investing in Irish Government securities. Section 3 also contains a technical provision to clarify that the reference in the principal Act to "Irish Government securities" means debt instruments issued by the Exchequer.

What exactly does this mean? Is Anglo Irish Bank a debt instrument? The Government has invested in it. The public is not fully au fait — none of us is fully au fait — with what is happening.

I must also ask the Minister whether everything is in the open now. First, we had the guarantee scheme, then we had the nationalisation of Anglo Irish Bank and now we have the recapitalisation of AIB and Bank of Ireland. At every stage the Minister for Finance said this was for the sake of the markets. He stressed every time that he was making those decisions based on the markets. However, the markets nose-dived every time. They went straight down through the floor. Since he made his announcement last September, time after time the markets have gone through the floor. Is there anything else that is yet to come out? We are here on behalf of the taxpayer, giving power to the Minister for Finance to put the pensions and the future of our people into the banks. That is what we are doing. The Minister of State said we would get an 8% return. We are not sure whether we will get that, but the Minister of State suggests we will. The public needs to know whether there is any more bad news to come out. Are we at the bottom?

The Bill states that the National Pensions Reserve Fund can only invest in companies that are listed on the Stock Exchange. What is the position with EBS and Irish Nationwide, for example? If they require recapitalisation or an injection of capital, does that mean the NPRF cannot invest in them? Will the Minister for Finance have to dip into some other pot to get funding? Are there any limits on the amount of money the NPRF can invest? In giving power to the Minister to direct the NPRF to invest, are we giving him an open invitation to invest in any financial institution? Under the existing legislation, does the NPRF not have the power to invest in companies or is it prohibited from doing so because of what the Minister of State said in his speech about Government securities? Do we have to change this in the current legislation to give the fund that power? I may have some further questions on Committee Stage.