Eugene Regan (Fine Gael)

Much of the debate on this legislation has concerned the extent to which the loan values will be written down and, therefore, the extent of the subsidy to the banks. However, there is an issue with regard to the funding of this project - the bonds which are provided to the banks, which will be at 0.5% or 1% above European Central Bank rates. We are, essentially, borrowing short and lending long. This is exactly what caused the problem in the first place with our banks. The special purpose vehicle, SPV, again takes this whole enterprise off the balance sheet of the national finances. It uses the mechanism which has led many of our banks into the current crisis, where we had off-balance sheet liabilities which, ultimately, undermined those banks.

Another aspect to the EU state aid rules is that it is not provided in the rules that enterprises which are non-viable will be granted aid. That issue arises in the case of Anglo Irish Bank. My final point relates to the surtax which is a substitute, supposedly, for a levy on the banks to ensure they share some of the burden. I question whether the Government has got approval from the European Commission for that surtax. It seems inconsistent with our single corporation tax rate.