Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I know the truth hurts but that is no reason not to express the truth occasionally. This is stand-alone legislation. I do not know whether the European Central Bank will agree a deal on the promissory notes tomorrow. The ECB will discuss it tomorrow and discussed it this evening. The ECB may agree or may not and there may be no deal. This is a stand-alone item of legislation which, on its merits and unconnected to any deal, is worth putting through. What can be said in respect of any prospective deal is that, at an early stage of negotiation, the authorities in Ireland, the Central Bank of Ireland, the Government, the European Central Bank and the Commission were ad idem that an opening position on restructuring the promissory note would be the liquidation of IBRC and the assets being rolled into NAMA. One can speculate about the motivations on either side but one strong motivation was that it did not seem logical to have two bad banks in Ireland effectively doing the same work. When NAMA proved itself, and was seen to operate successfully, it is logical to check the second bad bank, which was not functioning as a commercial bank but simply winding up assets, and to put it into NAMA and let NAMA deal with the issue. That is obviously something the ECB would have liked to have done and we would also liked to have it done. The arrangements for Anglo Irish Bank and subsequently IBRC were made before the troika arrived in town and before the commercially trading pillar banks were put in place. The crisis was over a long period and if it had all happened together, it would be like Spain with one bad bank. That is the position that motivated us.

What I am telling the House is that if I had a full agreement to announce tonight, I would also be introducing this legislation and giving Members the explanations I am giving. It would have the same powers.

The reason the legislation was produced so quickly was that we knew for months that this would be the position if we were successful in negotiating a deal. Therefore, this legislation has been prepared for months. It was introduced this evening because market-sensitive information was released in a credible way. I do not know who released it. By 4 p.m., I was put in a position in which I could not deny that the Government was contemplating the liquidation of IBRC, thus putting everybody with a vested interest in a position to determine what they could take out of it tomorrow.

Senator Crown should note I am not saying that all ¤14 billion in assets would disappear, or anything like that, but I am sure that, in the absence of this legislation, there would be those with vested interests in the High Court, the courts in London and perhaps the courts in the United States tomorrow to stop us from acting. That would not be in the interest of the Irish taxpayer. Of course, the IBRC is a non-trading bank but it does have assets. The assets are variously valued between ¤12 billion and ¤14 billion. We hope those assets can be realised for the Irish taxpayer over the years.

Senator D'Arcy raised a point about the total valuations. The total package concerning IBRC amounts to approximately ¤40 billion. Approximately ¤12 billion of that ? to use a low estimate ? is supported by assets. The idea that we are suddenly transferring debt to the State to pay the European Central Bank reflects the position. The European Central Bank provided the money through the ELA system and the promissory note is the method in place to pay it back. One can call it what one likes but it is a State debt or liability in the final analysis. The reason we face a promissory note payment at the end of March is that the State is liable for the payments on the promissory note. The promissory note is the arrangement put in place to refund the European Central Bank for the provision of the liquidity that kept the show on the road.

With regard to the question of the transfer, there may be some theoretical explanation, but the facts are the ones I have outlined. At 4 p.m. this afternoon, it was quite clear to me that we were in a position in which the liquidation could not be denied. I am not in the business of making false denials so we had to act to protect our position.

I do not know whether we are making provision against something that would not happen but I know, based on our experience over the past couple of years, that without making such provision, people with a vested interest in assets valued between ¤12 billion and ¤14 billion would be in the High Court before we got up in the morning. There is a conflict between the interests of the Irish taxpayer and those of these people. That is what we had to stop. The first step I took was to act under the Anglo Irish Bank legislation, which allows the Minister to nominate a person to take over the powers of the board of IBRC. I did that.

Knowing that what we are doing would be part of any deal that might be struck, we have had this legislation prepared for a long time. We agreed with KPMG to nominate a particular person as liquidator, when necessary. KPMG had all its arrangements in place. I nominated as liquidator under the Anglo Irish Bank legislation the same person who will be nominated in the morning if the Bill goes through and is signed by the President. KPMG had made its plans and had staff in London, New York and Dublin ready to go immediately, as required. There were several scares in the past about information being released. On a number of occasions, I nearly had to act because we believed there was a substantial leak about the fact that we would move towards liquidation, which we would not be in a position to deny because it has been in the conversation all the time.

That is the background and why we are here tonight. I certainly would not take the responsibility of allowing this to run for several days. It is not so much that somebody might raid the assets but that there is a risk that somebody would take legal action to prevent us from protecting the interests of the Irish taxpayer. We would get into a legal situation in which the interest of the taxpayer would be down the priority list, as has often happened. That is the reason.

There is no denying that this is emergency legislation. Senator Barrett has carried out a very good analysis of what one might consider to be objectionable if one were debating normal legislation. However, we are not debating normal legislation. If Senator Barrett wants a justification for what we are doing, he should note the Long Title of the Bill on pages 3 and 4. Did he ever see such a Bill Title before? At the end, it states: "AND WHEREAS IN THE ACHIEVEMENT OF THE WINDING UP OF IBRC THE COMMON GOOD MAY REQUIRE PERMANENT OR TEMPORARY INTERFERENCE WITH THE RIGHTS, INCLUDING PROPERTY RIGHTS, OF PERSONS". When the Bill is signed by the President tomorrow, half the lawyers in town will be scrutinising it to look for gaps to determine whether they can serve their clients.