Vol. 693 No. 1
90 Deputy Richard Bruton asked the Minister for Finance the balance between spending savings on the current side, on the capital side, and additional tax measures which will make up his fiscal strategy for the coming years. [38094/09]
In the supplementary budget last April, the Government set out a multi-annual plan to correct the public finances. This plan has been welcomed by the European Commission. The immediate need is the stabilisation of the deficit in 2010 and this is Government's proposed aim. This will require difficult decisions to be made for budget 2010 which will presented to the Dáil on 9 December. The bulk of the corrective action in budget 2010 will have to come from the expenditure side as further significant increases in the tax burden would impact on enterprise and growth prospects. The measures that must be introduced will undoubtedly be difficult, but the imperative for action is clear and we must make the necessary adjustments now in order to stabilise the public finances.
At the publication of the end September Exchequer returns, my Department announced that tax revenues could finish the year in the region of €32 billion. Later today, my Department will publish the most recent Exchequer returns for the period covering to the end of October. While the poor performance of tax revenue has continued, it is not out of line with what had been anticipated. To put this in perspective, overall tax revenue in 2009 is back to 2003 levels while gross voted expenditure has increased by about 70% since 2003. Consequently, we will have to borrow approximately €26 billion this year to fund the voted services and the central fund.
Bridging the gap between income and expenditure through ongoing increased borrowing is not a viable solution in the medium to long term. Taking the necessary action now will ensure that confidence is maintained in the Irish economy and that Ireland is favourably placed to benefit from global recovery as it takes hold. Delaying the necessary action is not an option and would require harsher measures to be taken later. It would also result in ever increasing amounts of scarce Government resources being used to service the mounting debt.
In 2009, gross voted spending divides into three main areas with 37% going on social welfare spending; 35% on the public service pay and pensions bill; and 28% on other programmes, including the capital programme. The priority must be the stabilisation of the deficit next year. It is clear, therefore, that all areas of expenditure will have to be considered in the context of deciding on the adjustments.
The pre-budget outlook, which my Department plans to publish in mid-November, will provide an update on the macroeconomic outlook and set out a technical fiscal forecast. The House will have the opportunity to discuss these forecasts in a pre-budget outlook debate. The budget will be published on 9 December and will provide full details of the nature of the corrective measures being undertaken.
I am disappointed that the Minister did not answer my question about where the savings would come from. Has there been a fresh Government decision overturning the proposal set out in table 6 of the April budget that in the next two years it would earn €4.6 billion in extra taxes, €2.5 billion of which was to come in next year? Has the Minister rescinded that proposal? He has said frequently that €4 billion must be found and none of that will come from taxation. Is that a Government decision or is it different people interpreting their individual thoughts? Does the Government still intend to reduce capital spending by €750 million next year and by €1 billion the following year? Such a move would severely undermine investment at a time when investment value can be obtained in the marketplace.
The table to which Deputy Bruton referred must be read in the context of the speech I delivered at the time of the supplementary budget. Then, I clearly stated the figure for taxation was an absolute maximum and the figure for expenditure reduction was an absolute minimum. I am sure Deputy Bruton would appreciate it is important that a Government keeps its options open in such a matter and reviews it having regard to developments on the general fiscal front.
It is clear from the decline in tax receipts that has continued to take place this year, albeit not on as spectacular basis as last year, that the scope for increased taxation in this year's budget is limited. I have made that clear in numerous public statements in recent months and that is also the general view of the Government. Of course, the precise composition of the balance between taxation and current and capital expenditure will finally be determined on budget day. What I have been doing is outlining the general character of the challenge facing the Government, which is to find the bulk of the expenditure savings on the expenditure side and to indicate clearly that the scope for taxation is limited.
As to the Deputy's second question about the capital budget, as he stated the indicative target stated in the Stability and Growth Pact was €750 million. Again, because of various decisions taken in the past year much of that target is readily achievable in the year ahead. It should be borne in mind that there has been a substantial reduction in tender prices in the interim.
Will the Minister confirm or deny whether the Government made a decision on changing the balance on the amounts that must be found from current and capital spending? When the Minister says he is keeping his options open, does that mean he is open to some of the suggestions advanced by the social partners that the balance should be different from the Government's current position that the bulk of the €4 billion will be found in spending cuts?
The Government has decided, and made it clear at all stages, that the €4 billion must be found to comply with our obligations under the Stability and Growth Pact. Apart altogether from our obligations under the pact, the Government has decided the figure is essential, having regard——
A new decision has been made then.
——to the need to stabilise our borrowing requirement at 12%.
Will the Minister reveal the nature of the decision? That was the purpose of my question to find out what decision had been made.
If Deputy Bruton would bear with me a moment-----
It is only now apparent that the Minister has made a decision but will not release it to the House.
The Government decided last April that the indicative figure for this year's budget was €4 billion. Having reviewed——
That was not the question I asked.
Please, allow the Minister to continue.
I am about to answer the Deputy's question. Having reviewed the end-September returns, the Government further decided that not only was this requisite to comply with our obligations under the Stability and Growth Pact, it was also essential in addressing the deterioration of the percentage ratio of debt to gross domestic product that was emerging this year. That ratio stands at approximately 12% and the Government does not see any room for slippage in regard to that target. We need to stabilise that target now.
The Government has made no decision on the balance between spending and tax.
That is the whole purpose of the budgetary discussions taking place in the Government.
91 Deputy Joan Burton asked the Minister for Finance his views on the most recent Central Statistics Office quarterly national accounts which showed a decline of 7.4% of gross domestic product, and a decline of 11.6% of gross national product, in the first six months of 2009 compared to the same period in 2008; his further views on the most recent Central Statistics Office quarterly national household survey which showed a decline in employment of 8.2% in the year to end June 2009; and if he will make a statement on the matter. [37967/09]
The Central Statistics Office published national accounts data for the second quarter of 2009 at the end of September. These data show that gross domestic product and gross national product fell at an annual rate of 7.4% and 11.6%, respectively, in the second quarter of this year. Combined with the first quarter data, the figures show the annual rate of decline in the first half of the year was 8.4% in gross domestic product terms and 12.4% in gross national product terms.
The sharp declines in housing output and in personal spending were the main reasons for the contraction in the second quarter. While these results are poor, one positive feature of the data is that the rate of export decline was not as large as that in many other export-oriented economies.
Data which have been published since then suggest the rate of contraction has slowed in the intervening period. As a result, I am advised the forecast for a gross domestic product contraction of 7.75% this year, contained in the April supplementary budget remains broadly valid. My Department will publish in mid-November the pre-budget outlook which will update the macro-economic outlook.
Regarding labour market developments, the latest quarterly national household survey from the Central Statistics Office shows an annual employment fall of 8.2% in the year to the second quarter of this year. On a sectoral basis, the sharpest falls were in the construction, followed at some distance by the retail sector and then at another considerable distance, the manufacturing sector.
In April, my Department projected that employment would fall by 7.8% for this year as a whole. The data which have subsequently been published are in line with this. So while we are seeing a sharp fall in employment, which is clearly a concern, it is not unexpected.
There are a substantial number of measures in place to support the unemployed. The Government is devoting substantial resources to training and up-skilling so that those losing their jobs in declining sectors can gain future employment in expanding sectors of the economy. The number of places for the unemployed in training, education and other support programmes has doubled this year.
The Government is also implementing measures to benefit from the global recovery when it eventually takes hold. The most important of these short-term measures include restoring confidence to our banking system and stabilising the public finances. Also, from a medium and long-term perspective our future pattern of growth will, by necessity, be predicated on a more sustainable export-led economic model. This will require a continued focus on improving our competitiveness.
At this stage the Minister knows the Exchequer returns due to be published in the next hour. Does he expect the tax receipts for the year to be closer to between €31 billion and €32 billion than the €34.4 billion he projected at the time of the emergency budget six months ago?
Does he accept that the past two deflationary budgets have hit tax revenues hard, worsening the already perilous state of the public finances? The Minister, in his reply, drew attention to the fact that exports are holding up, confirming that it is the collapse in the domestic economy and demand which is at the heart of the deflationary and depressive spiral in which the county finds itself. As the economy faces a collapse in demand, the current cause of the crisis, does he accept there is a revenue crisis as much as there is a spending crisis in the public finances? If the Government keeps cutting key services and public spending, the deflationary spiral will get worse.
The Deputy asked two broad questions. First, I have not been briefed as of yet about the end of month forecast which will be published in an hour's time.
The Minister should be. Is he sure he has not been briefed?
The monthly forecasts are not briefed in the same way as the quarterly or the end-November forecast. They are the subject, as the Deputy knows, of a press conference at the Department and are briefed to the Minister in advance.
I was referring to the Exchequer figures.
I am referring to them too.
The Minister astonishes me. How can he talk about them? He should be poring over them all morning.
Generally, the monthly figures are posted on the departmental website. They are not the subject of a separate presentation by the officials or briefing to the Minister. If there were anything out of the ordinary in them, the Minister would be briefed about them specifically. In the case of this month, there is nothing out of the ordinary in the forecasts. As I made clear at the end of September, I anticipated a €2 billion shortfall in tax. The tax receipts disclosed in the end-October receipt side are broadly in line with that forecast. Therefore, to answer the Deputy's question, the drop is of the order of €2 billion on the April forecast.
On the matter of the Deputy's general thesis on the operation of deflation in the economy, she is laying far too much stress on budgetary considerations as a motor for deflation in the economy. I will illustrate that point in one way. On the tax side, our estimation this year is that the number of income earners who will fall outside the income tax net will be of the order of half the income earners in the State. That will be an increase from the 39% or 40% forecast in the October budget last year. Equally, those on the top rate, some 21% in the forecast last year, have fallen to 10%. All that suggests is that a substantial wage adjustment has taken place in the economy in response to international developments. That wage adjustment does not always illustrate itself in CSO analyses of pay rates because they are often based on basic rates. However, we know that a great deal of private sector remuneration took the form of overtime, bonuses or additional remuneration. That features somewhat less in the public sector but reductions in that respect in that sector have been also a significant factor.
That huge wage adjustment is one reason we have witnessed the amount of deflation that has occurred in the economy. The other factor in this context, which the Deputy neglected to mention, is the enormous depreciation in sterling that has taken place. That was already under way in 2008, but that has fed into cheaper import prices within the State this year because our trade position with Britain is in deficit. We buy more from Britain than we export to it. Therefore, any depreciation in sterling has a knock on effect in terms of a fall in the current standard of living in Ireland.
I am rather surprised and a little shocked that the Minister will not be very much involved in examining the details of the October Exchequer figures. The deflationary spiral is all about tax revenues falling. Much of the Minister's budget strategy appears to be around cuts, which will further deflate spending capacity and receipts of taxes such as VAT. He referred to the UK. Does he agree that the single most disastrous mistake he made as Minister for Finance was to raise the higher VAT rate by 0.5%, which has sent hundreds of thousands of people across the Border to shop in Northern Ireland?
In regard to employment figures, the Minister acknowledged the figures were deteriorating even if the rate of unemployment was slowing down. Does he agree that we are looking at close to 500,000 people being unemployed and that one in five of the people on the live register are now under 25 years of age? Has he had a chance to study the comments made by Professor Blanchflower, a recognised international expert on youth employment——
I must call the Minister to make a brief reply as we have spent well over the time allocated for this question.
——that it is essential to have measures in place, in terms of education, training, internship and gaining experience, to get young people back into work.
I ask the Minister to be brief in his reply.
There are many matters to which to reply. Briefly, I agree with Professor Blanchflower to the extent that training measures are exceptionally important. However, I should point out that the CSO figures to the end of October will show for the first time that the live register has not increased in the month of October. There is clearly a stabilisation in the growth of unemployment at this stage. I do not accept the Deputy's prediction that it will grow to 500,000. That is no longer an official prediction.
I said it is heading towards 500,000.
Yes, heading towards it — it is not reaching that figure. I mentioned the extent to which I agree with Professor Blanchflower.
The matter of thousands of shoppers proceeding across the Border had very little to do with a half percentage increase in the VAT rate. It was caused by the fact that there was a very substantial reduction in UK VAT rates, which policy, incidentally, is now a proven failure. There was also a disparity in excise duty arrangements between this State and Northern Ireland, especially in regard to the price of alcohol. All the research on the subject of Northern Ireland has demonstrated how crucial and central a part that is in the inducement to shop there.
92 Deputy Richard Bruton asked the Minister for Finance his strategy for the reform of political expenses of office holders and of ordinary Members of the Houses of the Oireachtas. [38095/09]
First, it must be stated that Members of these Houses and officeholders incur legitimate expenses as part of their parliamentary duties both in attending Leinster House and as part of their constituency duties. It is appropriate that the amount of any such expense should be kept under review to ensure they are appropriate to reflect the cost of these duties, as well as the prevailing economic circumstances.
As Deputy Bruton will be aware, I have already reduced the cost of the expenses. Expenses generally have been reduced by 10% and mileage rates have also been reduced by 25% in line with the general reduction in public service mileage rates. Members of the Oireachtas and officer holders are therefore making a contribution in recognition of the current economic position.
The Houses of the Oireachtas Commission brought forward proposals earlier this year to introduce a single composite parliamentary allowance in place of a number of separate allowances. This summer I introduced the Oireachtas (Allowances to Members) and Ministerial and other Parliamentary Officeholders Act 2009 which, among other things, provided an enabling provision for a single composite allowance. This allowance would replace some or all of the many separate allowances payable at present. The legislation also allows for the proposed composite allowance to be linked to attendance.
At the time I introduced the legislation, I stated clearly that I was of the view that there was a need for further consideration and discussion of the proposed composite allowance before I brought forward the necessary regulations. In the interim, over the summer period, I introduced and adopted the regulations which provided for the 25% reduction in travel expenses and the 10% reduction in all other expenses. That is now law and is operative. Since then, I have had discussions with the Houses of the Oireachtas Commission, and there are continuing contacts at official level.
At present I am in the process of finalising the most appropriate revised arrangements, which will give a transparent, verifiable and cost-effective system of parliamentary expenses. When I have completed my consideration of the matter, regulations setting out the new arrangements will be laid before the Houses.
As we approach probably the most difficult budget in the history of the State, does the Minister agree that the Government must be seen to lead by example in this field? Does he believe the size of ministerial offices working for constituency purposes should be controlled among office holders and that Ministers drawing a cash allowance in lieu of secretarial assistance should be discontinued? Does he believe we need to have proper verification of expenses, both that they are properly incurred and that they are for proper purposes? I am sure he will share my dismay at reports of cases where the purposes for which allowances are being deployed do not appear to follow proper criteria. When does he believe he will have final decisions, particularly in regard to Ministers’ pay and conditions and the Oireachtas expense regime? Does he expect to have those matters decided prior to the budget in order that they will be a factor in putting together an overall package?
The Deputy has asked a number of questions. Will he remind me of his first question.
If the Minister answers the questions he remembers, perhaps I will recall the first one I asked him.
The Deputy asked if it is intended to apply similar changes to the expenses of Ministers. The answer is, yes, it is. The Deputy's first question was in regard to Ministers' offices. There are guidelines in existence on the operation of ministerial constituency offices. In respect of those guidelines, there also has been a requirement since April that further savings be made by Ministers on that account.
Clearly, the verifiability of expenses is an important issue. I accept that the commission proposed to me that the new regime should be based on attendance but no verification mechanism was proposed for attendance. I am not satisfied in regard to all expenses that attendance of itself verifies the incurring of the expense — it may in some cases but not in all. These issues are being worked through with the commission at present. I agree with the Deputy that even in the context of a block grant, a total absence of verification is not an adequately transparent system to carry the public confidence that must be carried in any system of expense.
The Deputy's last question related to when it is proposed to bring forward this regime. I have already had extensive consultations with the commission and with the delegation representing the major parties in the House. It is the intention to announce a revised regime in advance of the budget.
I am open to persuasion by the other parties on the appropriate day, but it would seem to me that the appropriate course of action would be to bring it into operation from 1 January next. We already introduced expenses changes half way through this year, involving substantial reductions in the amount of expenses. For ease of administration, the best course of action would be to introduce them from 1 January next.
I welcome the Minister's indication that he will make a decision before the budget because the credibility of the entire House will be on the line unless we are shown to be able to reform the way we operate ourselves.
The approach of Ministers to allowances and to their own ministerial offices needs to be significantly curbed. To state that there is an arrangement in place does not meet that requirement. There would be an expectation that adjustments would be greater by those who hold ministerial office and have greater access to support. That would be a fair expectation in a system of reform.
I do not necessarily accept the assumption that, for example, as Minister for Finance, I have fewer opportunities to engage in constituency work than many Members of the House who are not Ministers. There must be some balance in the provision of assistance in that area for Ministers.
The Minister keeps us here most of the time he is here too.
It should also be noted that those who are assigned to assist in constituency offices are expressly prohibited in the terms of their contracts from engaging in political work. That said, I will take into account what the Deputy has said and I agree that whatever is adopted on expenses for Members of the House must equally apply to Ministers.
93 Deputy Kieran O’Donnell asked the Minister for Finance if the special group on public service numbers and expenditure programmes report is the basis of the spending savings which he intends to achieve in 2009; and the instruments that have been developed in the human resource area to implement these proposals. [38093/09]
The basis of the expenditure savings for 2009 was set out in my budget of 14 October 2008 and supplementary budget of 7 April 2009. A range of instruments has been developed in the human resource area to contribute to the implementation of these savings, notably the incentivised scheme of early retirement in the public service, ISER, the special Civil Service career break scheme, ICB, and the shorter working year scheme, together with the moratorium on the filling of public sector vacancies by recruitment or promotion. Details of these schemes were announced in the context of the supplementary budget in April last. In addition, and as signalled in the April budget, an adjustment of approximately €4 billion is required for next year to meet the Government's fiscal consolidation targets.
Given this context, the Government must consider all expenditure areas. In this regard, one must bear in mind that approximately one third of gross current expenditure is on social welfare, approximately one third on the public service pay bill and one third of all the remaining expenditures are on the programmes, including the capital programmes. The Departments of Social and Family Affairs, Health and Children and Education and Science, collectively, make up approximately 80% of current expenditure. It is not feasible that an adjustment of the scale envisaged can be made without significant contributions from these various areas.
Naturally, this will involve difficult decisions for the Government in the lead up to budget 2010. In this overall context, the report of the special group on public service numbers and expenditure programmes will be taken into consideration. As regards the human resources implications of the forthcoming expenditure savings, discussions are ongoing with the social partners on the achievement of the required savings, including savings of €1.3 billion in 2010 from the public sector payroll. While the task ahead is challenging, it is one the Government is determined to see through in the best interests of the country.
Are the line Ministers taking into account the McCarthy report in terms of their budget savings and have they reported back to the Minister for Finance on that matter?
Could the Minister indicate how many public servants have taken up the various schemes to which he referred — the career break option, the shorter working week and the early retirement scheme? What staff reduction costs does he envisage in the forthcoming budget? For the 2010 budget, the McCarthy report made recommendations of reductions of €5 billion? How much of the McCarthy report recommendations in terms of value does the Minister expect will form part of budget cost savings in 2010 budget?
I cannot give a precise estimation at this stage. However, the procedure adopted on the McCarthy report has been that it was circulated to each Department and it is being examined, Department by Department, in the context of the Estimates process. Each Department is being interrogated on the report's recommendations and on what contribution it can make to savings within public expenditure. At the conclusion of that process of interrogation, there is then a political decision-making exercise by the Government on any recommendations.
It is important to bear in mind that the McCarthy report did not preclude the Government from looking at other areas. It is worth noting that, for example, the report did not have any mandate to evaluate capital projects except where there were current expenditure implications. Equally, the McCarthy report did not deal with the question of pay and remuneration in general. It is true that some of the savings referred to in the report are payroll savings in that it examined certain special allowances and premium payments, for example, in the health and justice sectors. However, the report did not deal with pay as a general subject and it is now under discussion with the social partners.
The non-pay recommendations of the McCarthy report related primarily to social welfare and other programmes and they are under examination by the Government in the context of the Estimates process.
I asked how many civil servants have availed of the schemes.
In terms of the forthcoming budget, how much of the €4 billion does the Minister expect will be contributed by cost savings as distinct from taxation increases? That is critical, and he has spoken at length about looking at the matter. However, the Minister cannot tax his way out of a recession and he must look at it in that context. He has not answered the question. In the context of the McCarthy report, he should give us a firm figure. How much of the €4 billion that he needs to find in the forthcoming budget will comprise cost savings?
50:50.
The incentivised early retirement scheme was open from 1 May but, following various extensions, it closed on 23 October. I do not have an up-to-date figure for the Deputy this afternoon.
The Minister might let us know those figures.
I will arrange for that to be forwarded to the Deputy.
Clearly, the question of the balance of expenditure and taxation is a matter of political decision for the Government and will be announced in the budget. As I made clear time and again, the scope for additional taxation is limited. The bulk of any adjustment in the case of the €4 billion must be located on the expenditure side.
How does the Minister define the bulk?
94 Deputy Kieran O’Donnell asked the Minister for Finance his plans for Anglo Irish Bank; the prospect for a return on his investment to date; the opinions of the EU from a state aid perspective; and the adequacy of the bank’s business plan. [38096/09]
As the Deputy will be aware, on 26 June 2009 the European Commission approved, under EU treaty state aid rules, a recapitalisation of Anglo Irish Bank of €4 billion.
The State investment occurred in the form of ordinary shares to help preserve an adequate level of core tier 1 capital. Part of the recapitalisation was used to buy back at a significant discount certain outstanding subordinated loans Anglo Irish Bank had issued in previous years, to provide further support for the bank's capital position.
As highlighted in the Commission decision, the recapitalisation of Anglo Irish Bank was required as a matter of urgency to preserve the financial stability of the bank, which is of systemic importance. The recapitalisation was accepted by the Commission as appropriate to remedy Anglo Irish Bank's solvency problems at that time, maintain confidence in the Irish financial system overall and remedy a serious economic disturbance that would otherwise have been expected to arise.
The aid was approved as a rescue measure on the basis of a commitment to submit a restructuring plan for the bank by the end of November 2009. The board of Anglo Irish Bank is currently preparing the restructuring plan, which will consider all options for the future of the bank. In advance of the finalisation of the plan and its submission to me, it would not be appropriate for me to comment further on the plan.
As I stated on Second Stage of the NAMA Bill in the Dáil on 16 September last, it is likely that some institutions will require additional capital in order to absorb the losses arising from the transfer of their impaired assets to the agency and in order to maintain appropriate levels of capital. I made it clear that the Government would expect such an institution to explore all available options for raising such capital as it is the Government preference that private market solutions are found and implemented.
However, to the extent that sufficient capital cannot be raised independently or generated internally, the Government remains committed to providing such banks with an appropriate level of capital to continue to meet their requirements. This will be done in a manner consistent with EU state aid rules and the credit needs of the Irish economy. I recently confirmed this position to the Financial Regulator in the case of Anglo Irish Bank to facilitate the regulator in granting that bank derogations from certain regulatory capital requirements.
Does the Minister seriously think that private investors will come over the mountain for Anglo Irish Bank? He did not answer the question. The Minister told the European Commission he would get no return from the €4 billion which was put into Anglo Irish Bank by way of recapitalisation.
Not as bluntly as that.
Perhaps the language is plainer but the essence of the point is the same. The Minister will effectively get no return. He is now talking about putting another €20 billion into Anglo Irish Bank by way of NAMA, which makes €24 billion of taxpayers' money that will see no return. The EU has been clear in regard to state aid rules. Either this is an orderly wind-down or there should be a proper business plan for restructuring to take place.
Since last May, we have seen no figures in respect of Anglo Irish Bank, which we own — the May figures applied for the period up to 31 March. We have seen the figures up to 30 June for AIB and Irish Life & Permanent, and up to 30 September for Bank of Ireland. The people are entitled to know what is happening with regard to Anglo Irish Bank. The Minister should accept that the bank needs to be wound down in an orderly way, that he cannot get a return for the taxpayer and that he would be putting good money after bad with any further investment in the bank.
No, I do not accept what Deputy O'Donnell says because it is not a policy that is capable of implementation. What is capable of implementation is, first, what has been required since last February, namely, that the bank be stabilised. The effect of the National Asset Management Agency approach will be to stabilise Anglo Irish Bank. Whatever bonds are issued on foot of that are issued by the Irish State but they are issued for valuable consideration, namely, the assets for which they are taken.
They are of dubious value.
NAMA, for all practical purposes, amounts to a bad bank in the case of Anglo Irish Bank. The completion of the NAMA exercise will then enable the making of a strategic decision in regard to the direction the bank should take.
Given the character and size of the risk the bank posed to the economy since last February, the downsizing of the loan books, which NAMA entails, will be a welcome development on world markets and with the European Commission. Building on that, at the conclusion of that exercise — because it stabilises the bank and puts it in a position to fund itself — a decision can then be taken about the strategic direction the bank should take. The Deputy must remember that if we continue the orderly wind-down which he advocates in regard to that part of Anglo Irish Bank which is not part of the NAMA process and which remains in the bank, the certainty that the taxpayer will be at a loss is accelerated rather than diminished.
The Minister made the argument that one must take account of the credit needs of the Irish economy in terms of any recapitalisation of the banks. Anglo Irish Bank, into which €24 billion will shortly have gone, will provide no credit. The bank is not systemic for the banking system in the economy. Does the Minister not, therefore, think it appropriate at this stage in terms of value for money for the taxpayer to commence an orderly wind-down of the bank?
All of these questions can be weighed up on the completion of the NAMA process but, as I said earlier, the rapid wind-down of a bank of this type, after the removal of the at-risk assets in it, will only accelerate a loss to the taxpayer.
