Dan Boyle (Green Party)

The question of direction is at the core of the legislation if it is to achieve what we hope it will as soon as possible. The contributions made so far are all very worthy. Mine would probably be somewhere between the contributions made by Senator O'Toole and Senator Alex White. Of the five financial institutions we shall have 100% direct ownership of two and substantial, close to dominant, ownership of the other three. In those circumstances, if maximum influence cannot be exerted, then we need to question our role as an organ of State in controlling the economy in any manner.

It is more important philosophically, I believe, to decide on the role of Government in taking over a commercial entity and in determining, for instance, the extent of such involvement. That is why guidelines are important. There is still some uncertainty in the Bill notwithstanding the acceptance of the amendment that the guidelines, when they come into being, will be laid before the Houses of the Oireachtas. There is the big question whether there will be guidelines in the first instance. I believe that guidelines are useful and necessary.

I agree with Senator Alex White that the guidelines should specify the areas rather than the amount of lending. We have had some experience in the recapitalisation legislation last year of setting up particular funds which to date have been very poorly accessed in terms of the two largest banks. A €100 million fund was established on foot of that legislation for green enterprise which was meant to be the centre point of the Government's Smart Economy document, yet there has been only a tiny drawdown on those funds to date. When we specify in legislation that particular types of lending should be made available, we need to ask why this is not being put into practice. We know the future of lending in the short-term for the financial institutions cannot and will not be in property. We have over-extended ourselves there and there must be new forms of lending to promote better and more sustainable economic activity. Much of the debate so far has focused on small and medium-sized enterprises. While we need to promote that type of business structure, it is more important that as a Legislature we are more directive about the type of economic activities we want to see rather than the vehicles we want to see them being promoted in.

That is where the vacuum exists at the moment. We are bringing in legislation to deal with the effect of an economy that was over-reliant on property and construction. We need economic activity that replaces that and which is more sustainable in the medium and long term. Rather than talking about the existence of credit and the vehicles through which it should be provided, there should be more discussion about the type of economic activities we would like to see. That is where the direction should be given to the financial institutions.