Martin Mansergh (Tipperary South, Fianna Fail)

): Prior to making my statement, I wish to inform the House that as a result of the reshuffle last week there are now two Ministers of State at the Department of Finance, something which I greatly welcome not least with regard to the business of this House. The Minister of State, Deputy Dara Calleary, will reply to this debate.

I welcome the opportunity to address the Seanad on the final phase measures that the Government is taking to restore stability and certainty to Ireland's banking system. The banking measures announced by the Minister for Finance yesterday are the latest in a series of successful measures taken to stabilise the banks and to protect the interests of the taxpayer and depositors. They are the final steps in the process that will secure the future of the Irish banking sector, which is crucial to ensuring that the Irish economy can benefit from the global economic recovery that is now in train.

While economic activity remains weak, having introduced budgetary adjustments of more than €15 billion over the past two years the Government's fiscal position is credible. Our efforts to restore stability have been positively received throughout Europe and around the world. As a result, we are now in a position to return to economic growth on a more sustainable basis. I draw attention to an article in today's Financial Times under the headline "Wounded Celtic Tiger shows signs of clawing back growth". It states that it is becoming apparent that Ireland's modern economy is holding up well. The decisive steps announced by the Minister yesterday for our banking sector will generate the same sort of confidence in Ireland as the steps taken towards our fiscal position. The measures announced yesterday will position our banking system to play an important role in our recovery. While the cost of facing up to our problems is unpalatable to all, there is not an alternative. The price we pay is the price of long-term stability.

The Government is recapitalising the banks in order that the system as a whole can return to its rightful role of provider of credit to the real economy. Well-capitalised banks are in a much better place to lend and with so much attention focused on NAMA and capitalisation, the lending targets outlined by the Minister yesterday should not be overlooked. Furthermore, the banks will be required to realign their business practices with the needs of the modern Irish economy. Strategically targeted lending to small and medium enterprises, which all recognise as the lifeblood of the economy, will provide a welcome fillip to employment and growth in this sector. The provision of working capital for businesses is simply essential and entrepreneurs must be provided with the tools to demonstrate their innovation and ideas.