Marc MacSharry (Fianna Fail)

I welcome the Minister of State. I am glad of the opportunity to contribute on this Bill. By way of rebuttal, as someone who was involved in the recent election and who did many a doorstep canvass I too experienced the palpable anger of people that the world economy is in the situation it is in. I share that anger and am frustrated by the difficulties that have come to bear. There is no question there was an over-reliance here on a tax base that came from a property boom. We were all a party to that. While some people say we told you this or that, I would say a stopped clock is right twice a day. We still face these difficulties.

The fatal flaw of a single currency is that a country does not control its own fiscal policy and cannot adjust interest rates when it wants. The time we had 2% interest rates and 8% growth led to an overheating of the economy with which it was difficult to cope. If I remember correctly, the Opposition was critical at the time and wanted us to pay more to teachers, to spend more on public and capital sector expenditure and to spend in various other sectors. There was lobbying from all sides of the House to have stamp duty reduced, when we should have used that tool and increased stamp duty to begin to cool things off. However, we are where we are - in a difficult situation.

I regret we are in this difficult situation, but we are and must take the appropriate steps to get out of it. I am pleased the Minister for Finance and his colleagues have taken some decisive action since last September, with the guarantee scheme, the part-capitalisation of some of the banks, the nationalisation of Anglo Irish Bank and the establishment of NAMA, which is at an advanced stage. It is not proposed to let people get away scot free for any crimes they have perpetrated on the people, taxpayers included. However, there must be due process. I too would love my pound of flesh and to set up the guillotine in St. Stephen's Green where we could line them up. However, in the real world that does not and should not happen. This is not Iran; this is the Republic of Ireland and we have laws.

There are three separate investigations going on into Anglo Irish Bank and we will await their outcome. If it is found that people have broken the law, they will receive the full rigours of the law and whatever punishment our laws prescribe. That is what will happen. Therefore, this is not a case of looking after those who got us into the mess or anything like that, but about ensuring we provide the leadership and thoughtfulness to get us out of it, as best we can.

With regard to NAMA, we have much more information on the proposal following the recent meeting of the Joint Committee on Finance and the Public Service which was attended by Dr. Peter Bacon and Mr. Brendan McDonagh, who told us how they intend to go about it. NAMA will deal with the issue over a long period. NAMA will not operate like the Resolution Trust Corporation in the United States which in the savings and loans fiasco gathered all the assets as quickly as possible and sold them off for whatever price was available. NAMA will be about working things out and will aim at achieving the maximum return for the people. Perhaps in ten, 15 or more years down the line we will end up making a profit out of it. Those are the facts. I believe the principle behind NAMA will be replicated throughout the eurozone in various ways - the principle of pooling all of the difficult debt, paying for it through government bonds redeemable against the European Investment Bank for capitalisation of the banks. I agree with that and think it is a good approach.

There is no question that the regulation system in this country has failed us over recent years. As the Senator said, the light touch approach carried out by many people who had worked in the same industry and done the same jobs was not healthy and did not serve us well. It did not serve any country well. What we need are agreed global principles to try and deal with the financial services industry. Yesterday, we saw President Obama came forward with a rewriting of the entire regulation system of the United States. We need to make improvements here. That is being done and that work will continue with the Minister.

The Bill provides for the welcome step taken by the Minister in September to guarantee small deposits. It is particularly welcome because it deals with the concerns of consumers about their bank savings. The guarantee is one of the many decisive steps taken by the Government to ensure we have a stable banking system. As the Minister of State, Deputy Mansergh, said, the Bill will give legislative effect to the amendments to the Irish deposit guarantee scheme announced by the Government on 20 September 2008. The reason for the delay in the Bill was that the European Commission issued a discussion document on updating the EU directive on deposit guarantee schemes. The European Council and Parliament passed Directive 2009/14/EC and the changes made in the new directive are incorporated in the Financial Services (Deposit Guarantee Scheme) Bill 2009 and its associated regulations.

Deputy Mansergh mentioned there are two parts to the Bill and has explained them. I will not delay the House by going into the specifics of it. Senator Cannon said Fine Gael broadly welcomes the Bill. I know Fine Gael has highlighted the changing shift in the relationship as between the taxpayer and the banking system for which we must cater, which I believe is being and will continue to be done. The Labour Party also welcomed the Bill in the Dáil, but commented that our regulation system was not up to scratch in recent years. I mentioned my views in that regard.

I welcome this legislation as a further step along what will be a long and difficult road to economic recovery for the nation. We hope indeed that this is a step towards global recovery, which is out of our jurisdiction. On the Order of Business today, Senator Paschal Donohoe mentioned that tough budgets lie ahead, and I agree. Painful steps must be taken by all. That is highly regrettable but is due to the unsustainable system we had, even though many on all sides thought it might last and thought we might only have an easing-off in the property market. We did not and I regret that. I wish matters were different, but they are not. Therefore, we need to take appropriate steps. We are doing that and I have confidence in the Minister and Minister of State and their colleagues that this will continue to be done. I commend the Bill to the House.