Dominic Hannigan (Labour)

Today sees the introduction of one of the harshest budgets in the history of the State. This comes on the back of a series of fateful decisions by the Government, of which none, perhaps, is as important as the bank guarantee in 2008. The version of the story we have been told up to now, which we all believed, was that it was necessary to introduce the guarantee to avert an impending crisis in the financial system. When my colleague Senator Alex White asked the Minister for Finance, Deputy Brian Lenihan, why the guarantee was introduced so quickly on that fateful night in 2008, the Minister said:

[B]y Monday evening it was clear to the Government that the huge battering the Irish bank shares had taken on the Stock Exchange reflected a general collapse in market confidence in the whole Irish banking sector. This was a very serious situation.

He said the guarantee was his answer to this situation. However, according to the version we heard last weekend from the Minister for the Environment, Heritage and Local Government, Deputy Gormley, there had been a meeting of the entire Cabinet the previous day, Sunday, at which this was discussed and agreed. The Minister said on Saturday morning that it was not a spur-of-the-moment decision, although I read this morning that he has since rowed back slightly from those comments. However, the fact remains that this is the first time anybody has ever heard about a Cabinet meeting taking place on the Sunday. There is still a discrepancy between what Deputy Gormley is saying and what the Minister for Finance told this House. I ask the Leader to ask the Deputy Leader, who is the chairman of the Green Party, whether he can corroborate those statements by Deputy Gormley at the weekend, because it runs entirely contrary to what the Minister for Finance told this House.

The spin at the time was that there was a sudden crisis and that we had to introduce the guarantee to avert that crisis and save the banking system when in fact there had been discussions throughout September. The Government knew what was happening with Irish Nationwide and Anglo Irish Bank and it had been contemplating such a guarantee throughout that month. It ignored the €7 million report from Merrill Lynch, it approved the guarantee at the Cabinet meeting on Sunday and then, on the fateful Monday, it invented the crisis so it could push its policy through. We need to hear more about this and we must have clear and concise reasons for what happened. This is a sore that will fester until we get the truth.