Liam Twomey (Fine Gael)

Things have changed dramatically in the 12 months since the current scheme was first proposed. With NAMA, we are told that matters are improving. Is the Minister of State premature in bringing forward this scheme when it is due to kick in at the end of September 2010? Perhaps he should leave it be until March, April or May to see how things pan out next year. The Irish taxpayer has just forked out €54 billion to the Irish banks. The banks are telling us things are improving for them and that core tier capital is increasing. There are no limits on what the Minister of State is proposing to provide under this guarantee scheme. Is this not a little premature? It is time we allowed the banks to grow up and look after themselves rather than expecting to become a proxy institution of the Irish taxpayer. This is not necessary; it is premature and the Minister of State is misreading the market completely. There would be a greater sense that the Government knows what it is doing if it let the banks work out their problems and allowed them to make the case for themselves on the international markets with their bond holders and long-term debt holders. That should be done rather than allowing the banks to come running crying to the Minister for Finance for another taxpayer guarantee. At this rate we will soon be guaranteeing everything the banks own. This is the wrong approach.

During the debate on NAMA, we were told that it was all about getting credit flowing. Mr. Eugene Sheehy of AIB made it quite clear to the Oireachtas Joint Committee on Finance and the Public Service that this was not a priority for the banks. It is not about getting credit flowing so there is no justification for the massive bailout mantra the Government put forward. The Minister for Finance is wrong in providing a blanket guarantee so that banks can borrow from where they want. This will encourage them to act like banks in Dubai, with the Government becoming Abu Dhabi to the Irish banks. The banks must cop on, grow up and mind their business.

What is the Minister of State doing to put the boot into some of the bad behaviour by the banks? Mr. Fingleton left Irish Nationwide in such a mess that €8 billion out of €10 billion in loans will be transferred to NAMA. There was much big man talk on how the Government would get back his €1 million pension payout on behalf of the taxpayers. The Government has done nothing of the sort. Mr. Fingleton walked away with €1 million and the State has walked into an €8 billion mess that we must bail out. At the outset I could believe that the Government was naïve about the world of banking and could be hoodwinked by the leading bankers and forced to give the guarantee one year ago. There is a sense that the Government is still naïvely believing everything the banks say, which is why €54 billion of taxpayers' money is being provided.

Surely the Government has learned something since and does not need to introduce a blanket guarantee. This will have no effect on uncertainty, stabilising the market or not frightening international bond holders. This measure shows the Government to be the softest touch in the northern hemisphere when it comes to getting money for the private sector. I suggest the guarantee be parked for a few months until we examine how the banks are operating and see what happens when NAMA comes into effect. Not one loan has been taken from the banks and transferred to NAMA yet here is another scheme to throw billions in the direction of the banks. The Minister of State needs to take it easy.