Leaders’ Questions.

In September 2004, Deputy Brian Cowen was appointed Minister for Finance. In accepting the seal of office as Minister for Finance, he undertook to defend the interests of the Irish taxpayer and to protect the stability of the Irish economy in so far as that was possible. Yesterday, we saw the culmination of the stewardship of the Taoiseach.

On 24 April 2008, a month before he became Taoiseach and in his capacity as Minister for Finance, Deputy Cowen attended a private dinner organised by his good friend, Mr. Drury, along with Seán FitzPatrick and the board of Anglo Irish Bank at a restaurant in Dublin. At that stage, because the IMF report was on his desk indicating that the property situation in Ireland was about to burst, he knew, because he had extended the facility for loans in respect of the Dublin Docklands Development Authority site, that Mr. FitzPatrick and others were both on the board of the authority, as pointed out by Deputy Hogan, and on the board of Anglo Irish Bank. The Taoiseach also knew of the difficulties that a senior investor in Anglo Irish Bank, Mr. Seán Quinn, was having in respect of shares as the Taoiseach and the regulator had been informed of that.

All of this took place during the Taoiseach's tenure as Minister for Finance, when his duty was to defend the interests of the Irish taxpayer and to protect the stability of the Irish economy. It is the Taoiseach's view that Anglo Irish Bank was systemic to the Irish economy and he spoke to those bankers about the Irish economy. At the private dinner in 2008 with the board of Anglo Irish Bank, did the Taoiseach discuss these issues with the board and these bankers? Did he ask questions that a good Minister for Finance should ask in respect of what was a situation clearly beginning to spiral out of control, and which culminated yesterday in the Taoiseach and his Government imposing an extra debt of €50,000 on every family in the country which they did not ask for, did not cause and for which they are not responsible? It is the Taoiseach who is responsible.

I have noted that for the past while Deputy Kenny, and the Deputy beside him this morning in one of the newspapers, has been trying to personally smear me or suggest I am in some way responsible for the collapse in the banking system.

Deputy Cowen was the Minister.

He was only the Minister for Finance.

A Deputy

It is called responsibility.

He had the purse strings.

I want to make it clear to Deputy Kenny that I take full responsibility for all my decisions as Minister for Finance — that is the first point. I always did and always will defend the actions of Government in the past.

Even when they were wrong.

However, the position that is being suggested in regard to a long-standing dinner engagement with Anglo Irish Bank has no relevance at all to this situation.

Old friends are best.

He is like the brass monkey.

First, as Minister for Finance, I attended such meetings and dinners with other bankers down the years during my time. I want to make it clear that this has no relevance whatever to this situation.

The situation Deputy Kenny wants to raise concerning the challenge to liquidity in the banking system, which subsequently turned into a serious problem on 28 September, as we saw, was dealt with by me on the basis of the best possible advice available to me at all times. I reject the contention the Deputy continues to make. I take full responsibility for my decisions——

——and those of the Government. What we were seeking to contend with, as, indeed, was the Federal Reserve and the European Central Bank, was an issue regarding liquidity challenges in the Irish system. That was well known and well documented at the time. Therefore, I do not accept for one moment this idea that Brian Cowen is personally responsible for the collapse of the banking system in Ireland.

He is responsible for doing nothing about it. He stood idly by.

A Cheann Comhairle——

Deputy Durkan, please.

What has happened in regard to all of these matters is that we sought to deal with these situations on the basis of the best possible advice at the time and at all times. I do not accept the contentions made by Deputy Kenny and I treat them with contempt.

The Taoiseach is treating the Irish people with contempt as well.

A Deputy

That is the Taoiseach's problem.

That is precisely the Taoiseach's problem. He also treats the citizens of this country with contempt.

It is not that. It is the Deputy's tactics.

He will not listen.

He will not take advice.

He will not be taking advice from Deputy McCormack in any case.

The Taoiseach will not take any other proposition from any other quarter except his own. He comes to the House this morning having imposed a levy — an extra debt of €50,000 — on every family in the country through what he did yesterday. He said the meeting he had in his capacity as Minister for Finance had no relevance to this situation. That is the same thing his predecessor said when he addressed a meeting in Manchester as a citizen as distinct from being a Minister.

For heaven's sake.

A Deputy

Where is he now?

My charge is not against Brian Cowen, citizen. It is against the Taoiseach in his capacity as Minister for Finance. He attended a private dinner organised by a person who was then a member of the board of Anglo Irish Bank and was dealing with risk competition in the bank. He met those bankers and he knew there were difficulties in the property sector because of the IMF report on his desk. He knew of the dealings of the Dublin Docklands Development Authority because he extended borrowing facilities to them. He knew from the Financial Regulator of the difficulties with a senior investor in Anglo Irish Bank, Mr. Seán Quinn. Yet this function, one of many functions the Taoiseach attended, had no relevance to the Irish taxpayer or the Irish economy, whom the Taoiseach, in his capacity as Minister for Finance at the time, was expected to defend.

The situation with regard to Anglo Irish Bank is deteriorating on a continuing basis. The published element of the PriceWaterhouseCoopers report told us that the extent of liability was about €3 billion, then it became €6 billion. Yesterday, the Government injected €8.3 billion into the bank and we are told of a further €10 billion on top of that. To boot, the Minister for Finance has said that may not be all. The cost of dealing with what the Taoiseach considers is not just a systemic bank but one that is very close, guarded and protected by the Taoiseach and his party, is rising on a consistent basis——

A question, please Deputy.

The Taoiseach can treat this with contempt if he wishes——

That is the Taoiseach's nature.

It is not my nature; it is the truth.

He also treats the citizens of this country with contempt because he has levied their sons and their daughters for the next generation with a burden they did not cause and for which they were not responsible. In view of the lack of regulation and oversight by the Taoiseach when he was Minister for Finance and now as Taoiseach, he has caused this cataclysmic financial consequence for every person in this country. How does he defend protecting the interests of the Irish taxpayer and protecting the stability of the Irish economy in his time to date as Minister for Finance and as Taoiseach, when it is clear he oversaw this spiralling and out of control situation and when he has asked the taxpayer to take on the private debts organised and raised by Seán FitzPatrick and his crew?

A Deputy

The truth is bitter.

He looked the other way.

I will answer this statement by Deputy Kenny. When I became Minister for Finance in 2004, I made my first budget speech for the 2005 budget a couple of months later. I set up a tax strategy group and reviewed all the property reliefs, etc. I used independent consultants, Goodbody and others. The tax strategy group and all those papers are on the website——

Why did he not ask the man in the street?

I should be allowed to reply without interruption and not have to listen to some of Deputy McCormack's guff. He is the gurrier in chief when it comes to that sort of thing.

I will not have my integrity challenged here by Deputy Kenny or the guilt by association he is trying to impute. When I became Minister for Finance in 2004, I set up such a group. Those papers are in the public domain and they can be found on the website of the Department of Finance. They set out at that time how we were going to deal with a situation where we had to move from the dense tax structures relating to property developments. It is all laid out on the website how we might arrive at a soft landing position where growth of 4.5%——


People are trying to revise history. Right up to the general election of 2007, everyone held the same view of the future prospects of the Irish economy at that time.

It was not the same view as the Taoiseach's.

Let us get the facts clear. In autumn of 2007, we had a major problem with regard to liquidity in the international system. The US Federal Reserve, the European Central Bank and everyone else including the Central Bank of Ireland, were working in the context of trying to ensure we could maintain liquidity in the system. This is all documented for anyone to see. By autumn 2008, when Lehman Brothers collapsed, there was a solvency crisis at that point because the whole banking system was broken. The investment banking model was broken. The regulatory system that applied then was no longer appropriate, as we have now seen from the response of every other jurisdiction. Almost every other country has had to recapitalise its banks. Every other country has been involved in having a state guarantee——

Not every other country.

The Taoiseach without interruption, please.

There is a debate being carried on in the country and in this House and particularly by Fine Gael, that seeks to suggest this is an issue which originated here, for which we are to blame and for which I am to blame.


I want to make a distinction and I will defend my position as Minister for Finance with anyone. I continue to take, as every Government should, full responsibility for its actions at all times but I am not going to take the revised version of history coming from Deputy Kenny who had an even looser fiscal policy framework to put to the Irish people when he sought this job at the last election.

We gave the Government an economy in surplus and they blew it.

When I was Minister for Finance I refused to take some of the options offered by Fine Gael such as the abolition of stamp duty in order to revive the property market. I was the person who refused to take all that advice from Fine Gael which it regarded as an opportunity to win middle class votes in the general election. Those are the facts and I will not take the revisionism that Deputy Kenny is coming up with and I will not take the attack on my personal integrity that is part of Deputy Kenny's whole strategy for dealing with this matter.

The Taoiseach is to blame.

I call Deputy Gilmore.

The people of this country are in a state of shock this morning and somewhat bewildered by the huge size of the figures and scale of the amount of money that will have to be paid for the bail-out of Anglo Irish Bank. I saw a figure this morning of €200,000 million a year in the budget. This is the sum of all the cutbacks that have taken place in health, education and social welfare. We are being told it could cost up to €40,000 million to keep Anglo Irish Bank going and the Taoiseach says it could cost even more to wind it up. The reason we are between such a rock and a hard place now over Anglo Irish Bank is because the Taoiseach provided a State guarantee for it.

On 28 September 2008, the day before the State guarantee was brought in and which included Anglo Irish Bank, that bank was a private bank. The Taoiseach could have told anyone who had invested in that bank or purchased bonds in it or loaned it money they had made an unwise business decision and that they would have to take the consequences or at the very least, if there was to be State intervention at that stage, that the State would have been in a position to negotiate with those bondholders. Instead, the Taoiseach told them not to worry about it because the State would look after it and the taxpayer would pay. He wrote a blank cheque for them. Yesterday, the details of that blank cheque were filled in.

I can understand the case for a State guarantee for high street banks and building societies but I have never been able to understand what is the case for the State guarantee and the nature and extent of that guarantee provided to Anglo Irish Bank which, after all, was a piggy bank for property speculators. The Taoiseach has stated he made that decision on the best possible advice. Earlier this year, he refused a motion from the Labour Party for an investigation or an inquiry into how that decision was made to provide such a guarantee to Anglo Irish Bank and for which we had to pay up yesterday.

Will the Taoiseach release all of the papers and all the advices available to him in September 2008 when he and his Government decided to provide a State guarantee for Anglo Irish Bank? Will he tell the House who lobbied on behalf of Anglo Irish Bank in advance of that decision being made? Will he tell the House why a decision was made, as I asked at the time, to include dated subordinated debt in that extensive guarantee?

In regard to yesterday's decisions and how they were portrayed, the capital that is being provided by the Government to the banks involves, first, the conversion of preference shareholdings in AIB and Bank of Ireland.

I am asking about Anglo Irish Bank.

I am aware of that. I will answer all the questions.

Please answer my question.

I want to answer.

My question was specific to that bank.

No, if I may say so, Deputy Gilmore's introduction suggested it is a question of paying out €2 billion per year with nothing to be gained from it. In respect of the capital we have provided, we set out a promissory note arrangement over ten years. In return for this, we have the shareholdings in the bank and the assets that have been bought by NAMA.

Wonderful businesses.

The suggestion has been made that the assets bought by NAMA are worthless. These valuations were done under due diligence and set out by NAMA yesterday.

Valuable properties.

It paid €8.5 billion for €15 billion in loans and it expects to recover the value of those loans over its seven to ten year lifetime. That is the purpose of the NAMA operation. Elements of this morning's debate seem to suggest that we are handing over money to the banks and getting nothing in return. We are getting assets to the value of the bonds we are giving to the banks over that period.

If the Deputy asked anyone, including present and past governors, they would say Anglo Irish Bank was of systemic importance. I am not simply saying that; it is acknowledged. The Deputy does not acknowledge it and argues instead that it should have been let go to the wall. He has just heard that if we had not guaranteed Anglo Irish Bank on that occasion and it went to the wall with a disorderly failure in the system, the result would have been a contagion throughout the entire system because of the interconnectedness of our banks. It was not a case of letting something go to the wall without consequence. We were not in a position to take any risk in regard to the financial system. The financial guarantee provided us with the means by which we could avoid an implosion in the banking system in Ireland. The Deputy might not want to accept that but it is a fact. That night's decisions were made on the basis of advice from and discussion with the relevant people, including the Governor of the Central Bank, Department of Finance officials and regulators.

The second point raised by the Deputy concerned representations. I did not receive any representation from Anglo Irish Bank on what was to be done that night.

What about the previous night?

On any night.

Did they talk in the Galway tent?

Deputy Kehoe, please.

I reject the continuing effort to suggest otherwise. The Minister for Finance and I dealt with this on the basis of advice from public officials. We made the decisions on that and no other basis.

In regard to the question of what else was involved, we made the decisions that night and the discussions continued until the early hours of the morning. It was not a question of me getting papers. It was a case of examining the situation and asking what was the challenge to the system on that occasion, what needed to done and whether the Government was prepared to act. We had to take those decisions and I believe they were the right ones because the advice of the people to whom I referred was that the financial system was at risk. I was not prepared to take that chance and no responsible person in our position in government at the time would do otherwise. The suggestion to the contrary is simply not true.

The Taoiseach asserts that the decision had to be made in respect of Anglo Irish Bank and having regard to the full nature and extent of the guarantee. He leads us to believe that the decision was taken in the national economic interest. Nothing I have heard since September 2008 convinces me that was the case. I believe that the Taoiseach and the Government made that decision in September 2008 not in the best economic interest of the nation but in the best personal interests of those vested interests who I believe the Government was trying to protect on that occasion.

That is wrong.

I believe the decision was made to save the skins of a number of individuals, some of whom were connected to Fianna Fáil——

The Deputy believes in the tooth fairy.

Who are they? Name them.

——and whose property interests and prosperity were bound up with the fortunes of Anglo Irish Bank. I believe that is why the decision was made and I have heard nothing to the contrary since then. That is why I am asking the Taoiseach to publish all the advice he had available to him on that occasion. If my belief is correct, and I have not been convinced to the contrary, that decision was an act of economic treason for which this country is now paying very dearly.

Yesterday, we got a very big bill for Anglo Irish Bank. That rotten institution acted as a piggy bank for property speculators, was described in strident terms by the Minister for Finance as having been reckless in the manner in which it conducted its business and has caused the huge problem we now face in our economy. We will get the new unemployment figures in a few minutes. People have lost their jobs as a result of this. This bill is equal to the sum total of the pay cuts and pension levy in the public sector.

The responsibility is on the Taoiseach to explain why it was necessary to provide Anglo Irish Bank with the extensive and broad guarantee that has now landed us in a situation whereby it will cost €40 billion to keep it going and even more to wind it up.

I have had respect for Deputy Gilmore as a Deputy down the years.

Is it fading now?

It is reciprocated.

If, as he says, this respect is reciprocated I want to tell him very sincerely that in my 25 years in politics I have been beholden to nobody. Every decision I ever made in the privileged positions I held in this and other offices has been in the best interest of my country as I saw it. I accept that in a democratic debate, irrespective of how arduous or tough it may be, people may hold contrary opinions but I will not be accused of seeking to commit treason against my country.


Hear, hear.

I consider that to be beyond the Pale. I understand that people are angry about what has happened, and rightly so, but I also have the responsibility to say that anger in itself is not a policy. We have to fix this and move on. We have to make sure the country can employ people and has the prospect of growth, businesses with access to credit and a banking system that is fit for purpose.

Money is being bled from the people.

The Deputy should be under no illusion about the motivation behind every decision I have made during the difficult times in which I have held this office, irrespective of whether he agrees with them. They were the very same, laudable motivations that would have moved him had he been in my position. I would never come into this House to accuse another Irishman of what he accused me.


That was a lame round of applause.

Publish the advice.

The second point I wish to make——

Publish the advice.

Deputy Gilmore, please.

I am a politician and I know how it works. I can see the opportunity which the Opposition wishes to grasp in terms of seeking to inflict political damage. I can defend myself by arguing and debating. I am well able to look after myself when it comes to that.

Defend the people.

Deputy Durkan, allow the Taoiseach to continue.

However, I also know the game that is being played here.

It is not a game.

A game is being played.

It is beyond a game.

The game the Deputy is trying to play involves accusing me of economic treason on the basis that I am beholden to some unnamed people who were in the property business and that is what my party and I stand for.

Publish the advice.

I will not accept that because it is not true. As regards the question of publishing advice, we were sitting down in a room that night to decide what decisions were to be taken. It was not a question of going around looking for papers or looking to see if there were options. We sat down to consider the decision that had to be taken before the opening of business the next morning to ensure this economy did not go completely.

The Taoiseach sat down with the people that caused the problem.

That was the level of decision I had to make and I was not prepared to take a risk with this economy in any respect. I took advice on that and we made the political decisions conscientiously.

It was done with the people that caused the problem.

A political decision is right.

Let me further state that when it came to early 2009 and we had to nationalise Anglo Irish Bank, if we had not put capital into that bank at that point, what would have happened? We would have had to face the sort of bills which the Minister, Deputy Lenihan, has pointed out——

Stick with the guarantee. That was a bad decision.

That reality remained, it was the same yesterday and there is a requirement to do the same today.

The chickens are coming home to roost.

A suggestion is being made that the choice was between zero, let it go to the wall or to put money into a bank to protect these unnamed benefactors the Deputies are talking about. That was not the choice. The choice was whether to find a solution that, unfortunately, involves having to make unpalatable decisions such as putting more money into the bank or a bigger bill than if we let it go to the wall. That is the story and the real choice.

Did the Taoiseach know then what he knows now?

What we are trying to do and what we are doing in respect of the comprehensive decision made yesterday is to say to the people that this is the solution to put this right, to fix the system, to ensure people have access to credit and to ensure the country can get back on the path of growth again. If we do not do that, if we did not do what we did yesterday and pursue it and deal with it in the way that we have dealt with it, then we would have a period of stagnation like we have seen in many other parts of the world where they did not deal with the banking crisis. Is it true to suggest that we in Ireland are the originators of all of this, even though 18 EU countries have had to recapitalise banks and hundreds of billions of dollars had to be recapitalised and guaranteed in the US system?

Here we go again; the same old story.

We would not be immune from this any more than anyone else. It is the case that we have had problems and we have had to deal with them but I will not accept the contention made by Deputy Gilmore in the questions about me and my motivation. The Deputy is entitled to disagree with me but he should not question my patriotism to my country.


The Taoiseach is standing idly by Deputy Bertie Ahern's antics.