Vol. 682 No. 3
55 Deputy Richard Bruton asked the Minister for Finance if he will publish the heads of legislation on the National Assets Management Agency and an evaluation of the way it will work in order that there can be a broad based debate on the proposal before final decisions are made. [19125/09]
It is my stated intention that enabling legislation for the establishment of NAMA will be introduced during the summer Dáil session. As is the case with all legislation, the Dáil will have the opportunity to debate the Bill when it is brought before the House. I have established a steering group comprising representatives of my Department, the Office of the Attorney General and the NTMA to oversee preparatory work for the establishment of NAMA on a statutory basis.
However, to avoid uncertainty and minimise further deterioration in the banks' loan books, it is important that NAMA is established on an interim basis as soon as possible. This will also allow preparatory work on the necessary legislation to be informed by the initial work of the interim agency. The interim agency will be well positioned to help identify the technical issues which will have to be addressed in that legislation and to assist in discussions with the EU Commission.
I recently announced the appointment of Mr. Brendan McDonagh as interim managing director of NAMA. The appointment of an interim managing director will ensure the implementation process is driven forward in the interim period pending legislation. Mr. McDonagh will be assisted by a high level interim advisory committee, whose names I am finalising. I have also directed the NTMA to provide the necessary staffing and other facilities through its existing resourcing arrangements to support the interim operation of NAMA, pending its establishment on a statutory basis.
I appreciate that the question is whether I will publish the heads of legislation on NAMA in advance of the legislation. Draft heads of legislation are not normally published and it is not my intention that the draft heads of this Bill will be published. However, it is important that the maximum amount of briefing be provided on the proposed legislation and it is my intention to provide that briefing to Opposition spokespersons in advance of the legislation.
While I thank the Minister for briefing us, the question is very clear, will we have an evaluation of this project? This is on the scale of Napoleon's invasion of Russia. We are undertaking huge risks on the part of the taxpayer in saying the taxpayer will shoulder up to €90 billion in impaired loans. Does the Minister think it is acceptable that all that has been published is a ten-page document summarising a report that has not been seen? Is that enough for the Oireachtas to have confidence in the course the Government is taking? Why should the Oireachtas participate solely in processes designed to implement this when it is clear there is major scepticism on whether this is the correct way to go, on whether it will get credit moving quickly and on whether it will prove one of the most costly ways of dealing with the problem, and the taxpayer shoulder everything? Does the Minister agree we have time to have a proper evaluation of this? Let us get all the opinions on the table and make our decisions based on the best possible information, not simply on the basis of just one approach to this that has been pioneered by one group.
This is not a matter of one approach pioneered by one group. This was a very detailed exercise carried out within the NTMA, which advises the State on financial matters, building on its expertise and the analysis of the banks' loan books, which has been demonstrated since last September. The Government examined matters carefully. The Government and I agree with Deputy Bruton to the extent that the crucial issue regarding the operation of NAMA is the valuation of the books and the precise price at which the agency will acquire the assets. That is at the heart of the successful operation of the agency. That is why I have confined myself to date to a general statement of principle about how we will go about this approach. If we predetermine the valuation without further expert advice and analysis, we would expose the taxpayer. It is essential that a proper evaluation procedure be elaborated.
As I indicated in yesterday evening's debate on this, I am open to constructive suggestions from the Opposition on how we can proceed on valuation. No alternative system has been advanced in this House to address the question of how credit can be made to flow in the banking system again and how the banking system can be repaired. The approach taken by the Government is in accordance with best international practice and advice and the IMF has repeated again and again the need for states to clean up the balance sheets of the banks. If an alternative proposal exists, it can be evaluated, but no valid alternative proposal has been advanced from the Opposition benches.
Has the Minister examined the evidence that other attempts to do this ended in less recovery on behalf of the national agency than private sector recovery of this loan? That is the French example. Has he examined the fact that this will get bogged down in legal wrangling? This will be a bonanza for lawyers and accountants, not for those awaiting credit. That is clear. Does he agree there are many more disputes about the validity of this than simply the valuation? People have asked why non-performing loans in sectors other than development would not be included. Why does the Government want to take on €90 billion — a truly enormous portfolio for the taxpayer to shoulder — in a single State agency? Why have such a Napoleonic vision? Why should Ireland try to design something in a highly risky world? It is a single throw of the dice, a major gamble which we should not embrace.
I have discussed approaches taken in the French Republic with individuals who administered them, and what we propose is in line with what was proposed there.
Which did not work.
The Government will act on legal challenges on sound legal advice provided by the Attorney General and will ensure anything proposed is in accordance with the Constitution and law. It is incorrect to suggest that non-performing loans outside the land and development books will be taken over, other than non-performing loans associated with persons who are non-performing in the land and development category.
Because clearly, if they are non-performing in the land and development category they are seriously exposed and it would be irrational not to include the totality of their exposures.
Why will the scheme not include non-performing loans outside the development category if they are impairing our banks?
Because the degree of impairment to our banks is greatest in the land and development book. That is why that section of the banks' exposures is being systematically tackled.
So the Minister wants to take on this entire €90 billion. It is enormous.
The crucial point about all these figures is book value and that brings us back to the crucial question of valuations.
56 Deputy Joan Burton asked the Minister for Finance his views on the latest ESRI quarterly economic bulletin and, in particular, their forecast that unemployment will average 16.8% by the end of 2010 and GNP will fall 13.5% over the 2008-10 period; and if he will make a statement on the matter. [19129/09]
In the recent budget, my Department projected that GNP would contract by 8% this year and by 2.8% next year. Combined with the 3.1% contraction which was recorded last year, this implies a cumulative decline in national income of almost 13.5% over the 2008-10 period. In other words, over the period there is virtually no difference between my Department's assessment of aggregate national income trends and that of the ESRI.
In terms of labour market developments, the recent budget is based on the assumption that employment will fall by 7.8% this year and by a further 4.6% next year; this is the equivalent of a quarter of a million job losses between this year and next. As a result, an average unemployment rate of 12.6% is projected for this year, rising to 15.5% next year. The ESRI assessment is somewhat more pessimistic, with the unemployment rate assumed to average 13.3% this year and 16.8% next year. However, I point out that the latest data show the unemployment rate to have been 11.4% in April so that, in the absence of data revisions, an average figure of 13.3% for this year seems excessively pessimistic. Although they are not designed to measure unemployment, trends in the live register can provide a more up-to-date indication of trends and in this regard the latest figures provide tentative evidence that the rate of increase has slowed down somewhat.
With regard to next year, it should be noted that the ESRI projection for unemployment is at the upper end of the range of forecasts. The current consensus among economic forecasters is that the unemployment rate at the end of 2010 will be 15.4%. Focusing on minor differences among the various sets of economic forecasts misses the point. We are in for a very sharp fall in economic activity and unemployment has risen sharply as a consequence.
In broad terms, the Government's response to the rise in unemployment consists of both demand and supply side elements. We are working to improve our competitiveness and achieve export-led growth, thereby boosting the demand for labour. At the same time, we are investing in education and skills so that those who are losing their jobs in contracting sectors of the economy are able to secure employment in new, expanding sectors. In the recent supplementary budget I announced a range of activation initiatives which will go further to encourage individuals into employment.
I thank the Minister for his reply. What is his opinion on the European Commission forecast that the fiscal deficit will reach 15.6% of GDP in 2010? Does the Minister accept this comes as a result of depressed demand and soaring job losses?
What I find difficult to understand from the triumvirate in charge of the country, namely, the Taoiseach, the Tánaiste and the Minister for Finance, is that none of them seems to have any imagination concerning what unemployment figures of 380,000 — possibly heading for 500,000 — will do to Irish society. The Minister mentioned some measures he included in his budget but even judging by the record of FÁS these amount, at most, to about 90,000 places on various initiatives. Does the Minister expect to have any serious offer for people who are losing their jobs, particularly young well-qualified graduates?
First, the European Commission forecasts were issued on 4 May and predict GDP to contract by 9% in 2009. Concerning its forecasts on the size of the deficit, the Commission warmly welcomed the recent budget introduced here and was very supportive of it. Both the Commission and the chairman of the Finance Ministers at Eurogroup have praised the approach taken by this country with regard to budgetary matters. The Commission, the European Central Bank and the Council of Finance Ministers made very clear to me that they believe the Irish Government has taken the correct course of action given the scale of the difficulties we face. That has been made abundantly clear in recent days and it is important we notice that, as a country. It means that international confidence is being restored in Ireland and that is very important.
I was asked about the awareness of Government — which, I am glad to advise the Deputy, is a collective entity, comprising 15 members — of these difficulties. First and foremost, the Deputy questioned whether the Government recognised the gravity of the social crisis facing Ireland. In addition to the financial and banking crises, there is a very severe social crisis caused by the increase in joblessness. That is why the Taoiseach has continued to engage with the social partners to see whether they can work towards a common approach in addressing this social crisis. In addition, various measures were announced in the budget, including the stabilisation fund for enterprise and the various job training opportunities. These go only some of the way, as Deputy Burton pointed out, and clearly we must deepen and intensify such approaches.
I met people on the way back from Killarney where the Minister had addressed a credit union conference. He boasted that Irish people took pain that would cause riots in other countries. Where are the Minister's measures to deal with the 90,000 or so graduates and the additional tens of thousands of qualified apprentices? These are not unskilled people but have high levels of training and have been educated to a high level. What has the Government got to offer them and their distressed parents? They see their brilliant children, who have achieved academically and in apprenticeships, being offered nothing by this Government.
The Labour Party has put forward a series of proposals, including a graduate and apprentice internship system, while the Minister's Government has offered nothing. Is the Minister prepared to read the Labour Party's programme and to take on some of our ideas? We proposed that European Investment Bank funds for small and medium industries and enterprises should be utilised but so far this has been taken up to only a tiny degree although it is a €30 billion programme across the EU. We suggested a much bigger stabilisation fund than the small one the Minister announced he would start. We proposed a series of other initiatives to get people back to work but there has been no meaningful response from the Minister or from the Minister for Enterprise, Trade and Employment. They seem to be asleep on the job
Far from it. First, with regard to the pain I acknowledged to have been taken in this country, I was certainly not boasting about it. I was pointing out——
That is what the people in Killarney thought.
That is not what the people in Killarney thought.
That was what they told me.
That is the construction the Deputy wishes to place on what I said. A large number of delegates came over to me, thanked me and said, "Thank God, there is hope for this country".
We must face facts here. A huge burden of adjustment must take place in order that our economy may become competitive. What is exciting the admiration of other European countries is the fact that we are prepared to take on that burden. Our unit labour costs are no longer the highest in the eurozone but now lie behind one country. We must face facts if we want to be competitive. That is all I rightly wished to draw attention to because I believe it is important that Irish people understand the course of action we are taking. We are making ourselves more competitive, adapting our work practices and making real sacrifices in terms of the income we pay ourselves during the present period. All these initiatives, taken by many Irish people in their places of work around the country, are improving our competitiveness and generating international attention. That is very important if Ireland is to be put on the right track.
Deputy Burton raised the question of EIB funds. I was present at a ceremony in Dublin some weeks ago where these funds were committed to the Irish banking system and are now available——
How much?
I understand it is a substantial sum.
It was a tiny amount, €30 million.
It is in excess of that. This is the sum——
The Minister should tell us the amount. He was at the event and must know what it is.
These are the sums the European Investment Bank has made available to us.
57 Deputy Kieran O’Donnell asked the Minister for Finance if he has data available to him on the trends in business credit since the bank guarantee in September 2008; and if he will make a statement on the matter. [19126/09]
Data on business credit are available to me from a number of sources including the Central Bank and the Financial Regulator. Returns are also made by institutions covered under the guarantee scheme. From the available reports it is clear there has been some reduction in business credit. The most recent Central Bank monthly statistics show a reduction in total credit outstanding from non-financial corporate bodies of €1.3 billion in March 2009, compared with February 2009.
However, the cause of the reduction in business credit is not clear. Some reports state that customers with viable business propositions are being refused credit, while other reports suggest that falling demand for credit is the main cause of reduced credit flow. It is important that there should be a clear understanding of the basis for the slow down in business lending so that policies can be targeted to ensure that necessary corrective actions are taken, as required. The Government therefore decided, when it announced the recapitalisation of the banks in February, that there should be an independent review of bank lending.
As part of the recapitalisation package, Bank of Ireland and AIB agreed to fund an independent review on credit availability to SMEs in Ireland. The review is supervised by a steering committee consisting of representatives from the banks, the business sector and the public sector. Consultants have been appointed and have commenced their work. I expect that the result of the review will provide a clear picture of credit demand and credit availability to businesses and will identify ways to improve the flow of credit. The report on the review is expected at the end of June.
The recapitalisation and bank guarantee schemes were brought forward primarily to ensure funds would flow to small business, as well as to deal with the banks. The Minister gave a commitment to the House on 26 March that a report would be quickly brought forward on the issue of credit flowing to small business and oversight in terms of declined cases. Why is there no urgency in bringing the report before the House? When will it be brought before it? Furthermore, the figures the Minister is quoting as regards the Central Bank are grossly inadequate. Since last September we have seen declines in private sector credit of the order of nearly €8 billion. The Minister speaks of credit flowing to small business and the Opposition coming forward with alternative proposals, aside from the establishment of NAMA. We brought forward a motion last night on Private Members' business on the establishment of a State-sponsored wholesale bank to borrow funds from the ECB and provide them for existing banks for good loans, effectively taking ownership of the assets. Will the Minister take this on board in terms of providing credit for small business and mortgage holders?
I shall consider the matter when Fine Gael outlines its proposals in relation to bad loans because the availability of EU funding through the European Central Bank would be contingent on this. When there is a scoped proposal, I shall examine it.
As regards the review, it is progressing well, but to ensure it was comprehensive extra steps were taken, including the inclusion of banks other than those recapitalised, in order to obtain a full picture of overall credit availability. This is a vital question because all the evidence suggests those banks with external ownership are deleveraging more than those based in Ireland. The addition of extra third parties to the review, a review of the detailed terms of engagement of the consultants, the inclusion of a credit insurance issue, consideration of confidentiality concerns of participating banks and the inclusion of banks other than the recapitalised banks to obtain a full picture of overall credit availability were vital. Allied Irish Banks and the Bank of Ireland had committed to the review as part of the recapitalisation package. Other banks, including Ulster Bank, Bank of Scotland (Ireland), NIB, ACC, Anglo Irish Bank and KBC, were invited to participate, even though they had not made a commitment to become involved. The intention was to include the main banks involved in lending to businesses in Ireland, but their inclusion created a need for more formalised conditions attaching to the review. Some of the banks involved had head offices outside Ireland and were obliged to consult their parent companies about participation in the review. Publication of the review will be at the end of June.
This sounds like a slow bicycle race, as if the Minister is stalling. He gave a commitment on the floor of the House last March to the effect that he would bring forward such a report. We expect him to honour that commitment.
As regards Fine Gael dealing with toxic loans, we proposed a detailed review needed to be carried out and brought to the House within a period of six weeks which would look at the details in dealing with all the providers of capital, including bond holders, who are not getting full value in the market. We have brought forward a comprehensive proposal which we hope the Minister will take on board. Unlike his proposal, ours would lead to the provision of credit for small business. When is the Minister going to produce the report and what is the reason for the delay? Why is publication to be at the end of June, not now?
The report is not ready because of the inclusion of all the banks in the Irish picture. It will be ready by the end of June.
58 Deputy Joan Burton asked the Minister for Finance his views on whether the State, through the National Asset Management Agency, could potentially significantly overpay for assets transferred to NAMA and that any such overpayment would constitute an indirect transfer of wealth from taxpayers to shareholders; and if he will make a statement on the matter. [19130/09]
The objective of the National Asset Management Agency, NAMA, is to strengthen the banks' balance sheets which will considerably reduce uncertainty over bad debts and as a consequence ensure the flow of credit on a commercial basis to the real economy, to protect and grow employment, while protecting the interest of taxpayers. As I announced in early April, the potential book value of loans that will be transferred to NAMA is in the region of €80 billion to €90 billion, although the amount paid by the agency will be considerably less than this.
Pending the establishment of the agency on a statutory basis, an interim managing director has been appointed. I will announce an advisory committee in the coming days. The establishment of NAMA and interim preparations will also be overseen by the steering group recently established by me and including representatives of my Department, the NTMA and the Office of the Attorney General.
The valuation of the loans will be a very important variable. Preparatory work for the establishment of NAMA which has commenced will include an extensive due diligence on the loan books of the banks to ensure the appropriate categories or portfolios of loans are transferred to NAMA and that the banks are cleared of their identified riskiest loan portfolios. Loans will be transferred from the banks to NAMA at an appropriate written down value. The development of a valuation methodology by the interim agency will take account of the advice of the advisory committee and such other advisers as may be appointed and will be consistent with European Commission guidance and subject to EU state aid approval. This will take into account the risk being transferred to the State and an appropriate adjustment for the value of the State support being provided.
The Government has received expert financial, economic, legal and valuation advice at every step of its measured response to the turbulence in the banking sector. Likewise, specialist expertise, including valuation expertise, will be procured by the NTMA to ensure the work to be done by NAMA when established is accomplished in the most efficient manner so as to safeguard taxpayers' interests.
I should like the Minister to answer three points as regards the NAMA proposal, the most importance of which is how are the toxic assets to be priced in a transparent manner that commands public confidence? The Minister mentioned an advisory committee. Presumably, like all of the other parties in this process, it will be a secret committee because that is effectively what has been happening since the giving of the guarantee — secrecy with minimum information. The Minister has told us nothing about the funding of the asset purchases and the year by year cost of the associated public debts, the enormous increase in our interest costs and the cost of servicing our debt, as a consequence. There is the absence of a commitment to public accountability and oversight, similar to the procedures put in place in the USA and most successfully in Sweden where the banks had to be rescued, as well as in Finland. The Government has avoided all three points and the Minister will not tell us how he proposes to deal with them. No wonder people on the doorsteps are in a rage as regards what they are going to be charged in respect of NAMA.
I am glad the Deputy at least acknowledges that valuation is the crucial issue, that the valuation of the transferred assets lies at the heart of what has to be done. To ensure best value for money for the taxpayer, loans will be transferred from the banks to the agency at an appropriate written down value, depending on an assessment of the value of the loans and the risk being transferred to the State. Valuations will be assessed in line with European Commission guidance and will be subject to EU state aid approval. Clearly, the advisory committee will have a great deal of work to do——
Who are the members of the advisory committee?
Please allow the Minister to continue.
——in establishing a basis with the interim managing director and elaborating on a proposal which can be translated into legislative form and considered by the House. Loans will be transferred from the banks to the agency at an appropriate written down value as determined by it. The assessment will have to be in line with European Commission guidance. The identity of the members of the advisory committee will be announced by me in the coming days. The level of discount and the terms and conditions of the transfer of assets will ensure the banks will not get off lightly. They will have to take an appropriate written down value of loans, taking account of the objective of the agency which is to operate commercially and optimise the return on such loans over time.
On the suggestions of secrecy made by the Deputy, with the charge that minimum information has been made available, I have always made it clear that the Governor of the Central Bank and the National Treasury Management Agency are available to brief her on these matters. However, there are commercially sensitive matters in relation to all the loan books which would affect the stability of the banking system and which, therefore, cannot be published in the House as a matter of course.
Does the Minister understand that the banks, the covered institutions, are partially bankrupt? Some of them may be wholly bankrupt. He has mentioned the Governor of the Central Bank, his own Department and the regulator. Does he have confidence that these institutions have served well in this crisis? He said he had paid a minimum of €2 million to Merrill Lynch and up to €6 million for its advice. I still cannot figure out what it advised him to do. It would have been better if he had read the newspapers in Ireland; at least, he would have received more advice. He paid €3.8 million to PricewaterhouseCoopers for stress-testing exercises which, to be honest, were mathematical mumbo jumbo. Credit from the banks is frozen and many of their assets are impaired to the tune of more than 80% of their book values. The Minister's reference to book value sounds like a cleverly written lawyer's formula for going soft on the valuation issue. In other words, he values assets high and the taxpayer takes a hit of up to €50 billion. That is what Professor Patrick Honohan said at the joint committee, and there is a man who knows a lot. Can the Minister come clean with the House?
We must proceed with great care because the valuation of these assets must be done to protect and take account of the interests of the taxpayer.
So, are they being written down?
That is why I am not prepared to rush into giving a personal view on how the valuation should be conducted. I will take account of proper competent advice on that. That is my intention.
Where will the Minister get that advice?
Deputy Burton casually threw out the suggestion, as she does so often in banking matters, that this is a conspiracy to enrich bank shareholders. That is very wide of the mark. The purpose of this exercise is to clean the balance sheets of the banks so they can be restored as normal entities lending into the economy.
A few moments ago Deputy Burton stated that covered institutions, namely, the Bank of Ireland, Allied Irish Bank, Irish Life & Permanent, Anglo Irish Bank, the Irish Nationwide Building Society and the Educational Building Society are wholly bankrupt. That is a highly irresponsible statement.
No. I said some of them are partially bankrupt in parts of their business.
We should be very careful.
The Minister has been warning me off since last October. Every time an open discussion happens he tries to warn me off.
I am not trying to warn Deputy Burton off.
He does not want any discussion.
I am more than pleased to have discussions. We had an extensive discussion at a meeting of the Joint Committee on Finance and the Public Service.
The covered institutions are not wholly bankrupt. I am not warning Deputy Burton off. As the Minister charged with responsibility for banking, I am telling her that what she says is not in accordance with the facts.
59 Deputy Richard Bruton asked the Minister for Finance if he will review the job stimulus measures adopted in other countries; and if he has identified initiatives which could be successful here. [19127/09]
The first fundamental way to protect and expand Irish jobs is to get our competitiveness right and to put the public finances on a sound footing. This we are doing. The second key strategy is to invest in the smart economy, maintain high levels of capital spending and direct that into labour intensive areas. This we are also doing. For example, I announced the establishment of a stabilisation fund of €100 million over two years, to support vulnerable but viable enterprises and a research and development target of 2.5% of GNP by 2013.
In addition to that, I announced in the recent supplementary budget a further range of activation initiatives which will support individual enterprise through enhanced access to the back to work enterprise allowance scheme; facilitate some 1,400 additional claims; encourage further education through earlier eligibility for the back to education allowance; facilitate work experience through a new scheme, to include placement of graduates, which will cater for 2,000 people; expand activation opportunities for over 14,000 people; support redundant apprentices to receive additional training in the education sector — for up to 700 people; enable participation in further and higher education for over 6,000 people; and initiate pilot training schemes for workers on a three day week.
Each country must pursue its own jobs strategies in line with the resources it has available and the particular features of its economy. There is no "one policy fits all" approach.
I am disappointed with the vary narrow agenda the Minister is pursuing. The ESRI has told us we face 300,000 extra people out of work. Unemployment is growing at twice the rate of any other country in Europe or any of our competitor countries. The Minister's strategy is simply to pursue the economy down. His tax increases offer no hope, vision or chance for people to see something worthwhile for their effort.
The number of initiatives in other countries is startling. There are initiatives on tax deferral, carrying back losses, accelerated depreciation for certain key investments, deferrals of due date, prompt payments from the State, reduction of compliance costs for small businesses and cutting VAT for small business to generate activity. Other governments, which are facing much less stress in their labour markets than we, are developing such initiatives.
Why will the Minister not look at the job protection agenda allowing small businesses the scope to retain employees? Instead, they are having to tell workers who have served them well for many years that the doors are closing and they are being let go.
I examined Fine Gael's proposals in this regard. I provided access to my Department before the budget and I am glad Deputy Bruton used that facility. Many of the Fine Gael proposals replicate the Government document, Building Ireland's Smart Economy, which was published last December. Almost none of the programmes proposed by Deputy Bruton in his party's document is new.
However, I welcome the fact that Fine Gael acknowledges and supports the Government's positive initiatives in that area, such as smart metering in every home by 2013, electrical vehicles, the national grid as a smart grid, microgeneration, renewable energy and the extension of broadband. A number of initiatives being taken by the Government are very much in line with what Fine Gael is proposing. I welcome the fact that these were in that party's document.
There are serious questions about the sustainability of some of the investment Fine Gael proposes, including the use of the bulk of the national pension reserve and increasing borrowing significantly, whether on or off balance sheet, at a time when the State already has a substantial borrowing requirement. I question the wisdom of setting up four new commercial State bodies when the Government is intent on rationalising State agencies. I am also concerned that some of the proposals are to be funded by selling off public assets when their prices are so depressed. That said, I acknowledge that many of the ideas Deputy Bruton is putting forward are part of mainstream Government policy.
It is enough to make a cat laugh to hear the Minister question the wisdom of putting equity from the pension reserve fund into creating an energy infrastructure and a telecommunications infrastructure for the future while he is putting that money into buying toxic loans which will be a burden on taxpayers forever and a day.
Where are his initiatives on VAT for labour intensive sectors, on PRSI concessions for people expanding their workforces or on changes to the social welfare rules to allow employees to cut back to 80% working but remain in employment? These are all prevented by rules which the Minister continues to endorse in the budget.
We will not have an economy without a viable banking sector. The steps the Government is taking on banking, whether through recapitalisation or rescue measures, are not discretionary.
Having a decent electricity network is not discretionary.
If we decide to let the banking system fail the economy will see——
He talks about competitiveness but does nothing to deal with it.
——a reduction three or four times that already envisaged for this year. I appeal to Opposition parties to stop making politics out of banking. There is no advantage to our economy in that. We must have viable banks.
What about taxpayers' money?
Yes, we will have to take the bad loans off the banks.
What about an evaluation, a proper debate and proper documentation so we can assess the Minister's half baked ideas?
We have had debate after debate since last September about banking.
We have?
I am interested in decisions which will repair the banks' balance sheets and ensure they are restored as the viable motor of the economy.
No one believes his measures will repair the balance sheets.
Throughout the world, we have seen a dramatic lack of confidence and collapse in the financial system. If we repair that motor we will repair our economy. The idea that we can ignore this and engage in endless theoretical debate mixed with low political abuse as a form of addressing our banking problems is wrong.
