Damien English (Meath West, Fine Gael)
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The state of banking has changed since I last spoke on this issue because we have been told that our growth rates will not be as predicted. The Minister for Finance and the Governor of the Central Bank continue to tell us our debts are manageable. However, while we can manage by cutting costs and making people suffer, the overall national debt will not go away. We can barely meet the cost of servicing our debt through cutbacks.

Today I listened with interest to the Taoiseach as he tried to separate banking debt from national debt. I am afraid to say that it is all debt. We do not have the luxury of treating them separately. Our overall national debt, including the bank bailout, is a black cloud which will hang over this country for a long time. The Taoiseach needs to cop on because the country will have to repay this debt at some point. I do not see any major plan from this Government for repaying it, however. It intends to manage the interest on the backs of everybody in this country but that is where it stops.

The cost of bailing out the banks is the reason for the increase in the interest rates we pay on our debt. The structural deficit in our budget is similar to that of other countries, many of which have plans in place to rebalance their finances, but this deficit can be fixed over time. The market is scared by our banking debt and this is why we are paying higher interest rates than the likes of Germany. I ask the Taoiseach to refrain from separating the two issues as if they are unrelated.

The Minister and the Government lacked the maturity to take on this crisis. This is why so many incorrect decisions were taken. The decisions to bail out Anglo Irish Bank and to tell the Dáil that it would not cost anything were terrible. Even a few months ago, we were told it would only cost €20 billion. These statements were misguided and wrong. Many journalists are now writing that the Minister, Deputy Brian Lenihan, is not the man everyone thought he was. This Government is not able to manage the crisis. It does not have the ability to negotiate with bondholders. We are led to believe it was conned by the bankers but it may in fact have been aware of what was going on. The Government's lack of ability means our problems will continue unless it resigns to allow new parties which have the answers to take over. We have clear minds and consciences because we did not cause the crisis.

When NAMA was first announced, the Minister stated it would get money flowing to businesses but it has not and will not solve the problem of credit. Small and medium enterprises are suffering. Every day I walk down the streets of Navan, Trim, Enfield or Oldfield, I see another closure. These closures are preventable because most of the businesses involved are viable. They may have to employ fewer staff or make slight adjustments but they can survive if they get help from the Government. Sadly, there is no plan to help small and medium enterprises. The three and four year old policies of the good times have not shifted. The situation is getting worse because of the lack of credit. NAMA has not fixed this problem.

Last week I addressed the need for a national recovery bank. Perhaps we no longer need to establish a new bank given that we own 92% of AIB but we need to provide money to small businesses. The Minister's great idea for NAMA is a disaster in terms of helping small businesses to get credit. Let us move on to a new plan for getting money flowing again.

Businesses would have the potential to access credit if they were given professional guidance and advice on redrawing their business plans. The UK has introduced health checks for businesses. The mentoring provided through enterprise boards cannot solve every problem. A lot of business people work very hard over 60 to 80 hour work weeks. They are very familiar with their businesses but they may not have had the time to get the financial training they need to continue.

We cannot continue to ignore the issue of personal debt. Addressing the issue will help people to remove the dark clouds over their own finances. I do not advocate writing off debts, rather we should help people to plan a way through their debts by, for example, paying off short-term debt over the longer term. By making personal debt more manageable, we will increase consumer spending and, in turn, create more jobs.

We cannot believe the Government's employment creation plans. The rehashed announcements of jobs solely pertain to international big businesses and do nothing for the small businesses who need to see an increase in domestic as well as international demand.

The Government should stop telling us everything is fine when it clearly is not. Ministers must admit they are wrong and agree to a change of direction. They should listen to this side of the House and put in place plans which will help to restore the country to its feet and pay off our debts.

Michael Kennedy (Dublin North, Fianna Fail)
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I welcome the opportunity to speak on this debate. When we received the final bill for our bank bailout last Thursday, I was reminded of a sick person getting a doctor's diagnosis and being told about the medicines required for a protracted recovery. The patient wondering how he picked up the illness in the first place is now longer the issue. The reality is that, like the patient, we as a country must worry about how we are to be treated and when we will recover. Dwelling on the history of how the problem arose will not do anything to resolve it.

Like everybody else in this Chamber, I deplore the reckless lending practices of our banks, the greed of some developers and the ineptitude of our bank regulators. Equally, however, we should all be big enough to admit that successive Governments made mistakes in promoting taxes which were based on the sale of houses. I hope the Opposition parties will acknowledge their demands in successive budgets for greater spending by the Government. Hindsight is wonderful. None of us would make mistakes if we could turn the clock back but the blame game will not get us anywhere and will not solve our problems. I think it is time to move on - I was disappointed by Deputy English's contribution - and to seek solutions to the country's problems. It is essential that all parties put forward their views and policies to deal with this crisis.

I welcome the editorials in some broadsheets over last weekend. Saturday's editorial in the Irish Independent was entitled "Time for unity not for petty squabbling". I certainly subscribe to that view. The Sunday Independent stated that " all parties must put the nation first" and I believe that is what is needed. In Saturday's edition of The Irish Times, Stephen Collins had an article entitled " Four year plan an opportunity to cough up the truth". I agree with that as well.

Whether one believes a new Tallaght strategy is the best option or whether one considers a general election more desirable, I feel that all parties must move on from the accusations and deliberate misinformation which is only causing further confusion and frustration among the general public. We need action not anger and as the Minister said recently, anger is not a policy.

It has annoyed me to hear on our airwaves economists offering contradictory opinions on Government strategy. The Irish Independent editorial last Saturday put it aptly when it described these commentators as "celebrity economists", some of whom suggested we leave the eurozone and act like Iceland in reneging on our sovereign debt. Iceland today pays an 18% interest rate for its mortgages, compared to our mortgage rate of 4.5-5 %. If we asked any Irish person with a house loan which rate they would prefer, I doubt they would choose the Icelandic rate. Many of us will remember paying 18% and more in the 1970s and 1980s for our home loans when Ireland was outside of the eurozone and tied to sterling. It was painful to pay 18% and we need to maintain ourselves in a stable currency and be part of the eurozone.

Time and again we have heard from these same commentators that the Government should have reneged on Anglo Irish Bank bondholders. They never admitted that most of the €80 billion deposited with the bank in September 2008 was owned by Irish credit unions, Irish pension funds, local authorities and by Irish small and medium business people. These commentators and some politicians are still saying that the money deposited by ordinary Irish people should have been let go down the Swanee. There would be a bigger public outcry from old age pensioners and small businesses if their savings were lost. At least we can pay off the Anglo Irish Bank loans over a period of time, but with a positive approach, we will deal with them.

It is time to acknowledge that Deputy Brian Lenihan, as Minister for Finance, has at all times spoken in a truthful honest, rational and realistic manner about our banking and economic issues, when compared to those economic commentators which the Irish Independent described as "deficient" in their grasp of the country's economic problems and sovereign responsibilities. It is time to concentrate on seeking viable solutions and to remind ourselves that we overcame the deep recession in the 1970s and 1980s by taking positive action, not by engaging in perpetual moaning. We need to reflect on what changed the Irish people in the 1990s to become a confident, proud, modern and progressive nation compared to our previous insular and inward world view. l suggest it happened by adopting a positive attitude and I believe we can achieve greatness again by adopting such attitudes.

Let us look at the German people and see how they recovered from the defeat of two world wars to build themselves up to be the strongest nation in Europe, with the strongest economy and the most competitive manufacturing industries. We can build on our educated young work force to produce export orders, to increase our agricultural output and build on our tourist business.

We have the opportunity now to move on in a positive way to deal with our problems. We have a duty to show the way forward in an honest and constructive manner and to put our country first. I want to acknowledge the comments of some Fine Gael Senators in the Seanad last week. They were positive and they recognised that whoever is in government, constructive comments should be made. This is putting the country first. Even if a second Tallaght strategy does not emerge, Members should not be taking cheap political pot shots. We have had two years of that and it is time we moved on, grew up and recognised that we have major problems, so that we can deal with them constructively. It is not surprising that people will not spend when all they hear is this constant gloom and doom. They read about it in the newspapers, they see it on their television screens and they hear it on their radios. Much of it is perpetuated in this House. It may have been okay years ago when the country did not have the same economic problems but we must recognise that spewing out gloom and doom day in, day out is doing nothing for the country.

In regard to the four-year strategy the Government will bring out in November and on which I sincerely hope the other parties are working, each party needs to demonstrate, as the Government will, how it plans to cut our budget deficit to meet the EU requirement of 3% by 2014. They need to explain how the current budget deficit of €19 billion will be resolved in the coming years because as long as our tax intake is €19 billion or €20 billion less than our spend of €50 billion, we will have a deficit problem with which to deal.

We need to hear from all the political parties, including my party, how we will deal with taxation issues, a reduction in services, the public sector and the Croke Park agreement, on which a number of parties had no comment good, bad or indifferent. The public expects to hear how each party proposes to deal with our unemployment figures and not just the theory that 100,000 jobs will be created under the NewERA plan or something else. We need to be specific, which is what the people expect of us.

We need to show the people our manufacturing industry has the ability to increase growth in exports. It is worth noting that our exports are now at 2007 levels which is quite remarkable given the world recession, not to mention our recessionary problems. We need to hear from each party how they will grow our economy. Our overall economic problems would be fixed by a combination of tax, cuts and boosting growth in our economy.

Ulick Burke (Galway East, Fine Gael)
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It is unusual to hear Deputy Kennedy say that.

Michael Kennedy (Dublin North, Fianna Fail)
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I am glad Deputy Burke has come along to listen to me. The people overseas who lend to us need to understand how Ireland will be maintained as a creditworthy nation. They need to understand how we intend to fund our financial crisis. The Minister has indicated that he will put forward a Government plan showing our strategy over four years, how we intend to control our financial affairs and how we intend to retain the confidence of overseas lenders and investors.

I am sure no one in this Chamber wants the International Monetary Fund to come in and do the job for us. Let no one be in any doubt that it will come in. It has already gone in to Greece. For a couple of months, the Greek Government endeavoured to say that it did not have problems and that it would deal with things its way. The IMF went in-----

Ulick Burke (Galway East, Fine Gael)
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Will the IMF come in before the next general election?

Michael Kennedy (Dublin North, Fianna Fail)
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-----and proposed a €60 billion cut in the Greek economy, which puts ours into perspective. From here on in, the onus is on us to put Ireland Inc first and to unite in the national interest. As was stated in the Irish Independent last Saturday, we must quit the party political and petty squabbling and give the country a bit of leadership.

Ulick Burke (Galway East, Fine Gael)
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It is not the first time it started that racket. Does Deputy Kennedy remember payback time?

Michael Kennedy (Dublin North, Fianna Fail)
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I refer to some comments Deputy English made. He spoke about the Minister for Finance not having the confidence of international investors or the Irish public. The Fine Gael members might like to read opinion polls, although I suspect they might not want to read some of the results. I remind them that the majority of the people have confidence in the Minister for Finance and believe he knows what he is doing and is doing a good job.

After last Thursday's announcement, a number of commentators were complimentary of the Government and the recapitalisation programme. I mention Charlie Fell in Business in The Irish Times on 1 October 2010, Peter Straarup, chief executive of Danske Bank, Kevin Daly, senior economist with Goldman Sachs, and Patrick Honahan, whom we all know. Christine Lagarde, the French finance minister, said she trusted Ireland.

Ulick Burke (Galway East, Fine Gael)
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She must never have been here.

Michael Kennedy (Dublin North, Fianna Fail)
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I am just quoting what the lady said.

Ulick Burke (Galway East, Fine Gael)
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Does Deputy Kennedy believe it?

Michael Kennedy (Dublin North, Fianna Fail)
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I believe it because it is not the first time she said it. Olli Rehn, European Commissioner for Economic and Monetary Affairs, said Ireland's debts were manageable. I mention also Zoso Davies, a credit strategist with Barclay's Capital in Bloomberg Businessweek, Padhraic Garvey, head of investment in ING in Amsterdam, Anders Borg, the Swedish finance minister, Dan O'Brien, economics editor in The Irish Times, and Ian Huggard of Bloxham. I could go on but I suspect it would not make any difference to Deputy Burke's view.

It is time each of us grew up, accepted where we are at, endeavoured to resolve the issues collectively and accepted the financial parameters within which we must work in a truthful and responsible fashion. Whoever is in government in 2013, we will have achieved what we are setting out to do so that our debt is of manageable proportions.

Catherine Byrne (Dublin South Central, Fine Gael)
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I would like to have time to comment on what Deputy Kennedy said but I will not. The only thing I will say to him is that people are frightened. Whatever money they have is a very small amount. They hope to keep it in their pockets or credit union accounts to ensure that if anything happens to a member of their family, they will be there to support them.

At the end of the day, it will not be the bankers who will get us out of this or anything that happens in this Chamber. It will be the ordinary people who start to buy the bottle of milk and loaf of bread in the local shop. That is what will put this country back on its feet.

Michael Kennedy (Dublin North, Fianna Fail)
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I agree.

Catherine Byrne (Dublin South Central, Fine Gael)
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I do not have experience of the banking business nor am I an economist. I am a politician but also a housewife and someone who is reminded daily that one can only spend what is in one's purse and not a penny more. Unfortunately, the Government has not learned this small lesson that one can only spend what one has in one's purse and one cannot spend what does not belong to one. For many men and women-----

Michael Kennedy (Dublin North, Fianna Fail)
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That is what we are doing. We are spending €20 billion more-----

Catherine Byrne (Dublin South Central, Fine Gael)
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I did not interrupt Deputy Kennedy. The men and women on the street realise this country is in a crisis and that the wave of greed which washed over this country during the Celtic tiger years has now crashed down around us. There is real anger on the street and people feel betrayed by the Government. With almost 500,000 unemployed and rising emigration, people have a complete lack of faith in the Government being able to seriously address the economic crisis and make things better for everyone.

Those in government do not have a clue in terms of what is happening in the community. For them, it is business as usual. Every time I hear a statement from the Government my blood boils. It claims that it will not hit the weak and the vulnerable but I have a question for the Government. Who does it consider to be the weak and vulnerable in our country? Is it the old age pensioners who cannot keep warm in their homes as they are afraid to turn up the heating because of the bills? Is it the blind from whom the Minister's Government took €8 last year? Is it people with a disability who had their disability allowance cut last year and who cannot access proper services due to cutbacks? Is it our special needs children who have seen the special needs assistants being taken away? Is it our young people, many of whom are walking the streets looking for work, standing in dole queues or planning to emigrate? Is it the many young people who bought property at hugely elevated prices and are now trapped in houses not worth even half the price they paid, with no possibility of ever moving on or moving back to their roots?

The Government has not helped any of those people. Instead, it has taken pity on the bankers and developers who made millions of euro in the boom and got huge bonuses for sitting behind shiny desks. They were responsible for the inflated property market and gambled with billions of euro of borrowed money - our money - but the bubble has burst. They have abandoned any responsibility, and they have not been held accountable for bringing this country to its knees. Instead, billions of taxpayers' hard earned money is being used to pay off their loans and send them into blissful retirement. That has caused a great deal of anger, and Deputy Kennedy should know that the anger will not go away any time soon.

Last week we listened in disbelief as the Minister for Finance announced that the State now has to sink €30 billion into Anglo Irish Bank, and for what? We will never see that money again. That was a bleak day for our county and a bleak day for our children. Fianna Fáil will leave behind a legacy that it will have to defend forever.

People have had enough, and they want to see those in power take responsibility for the huge mistakes that were made. We need to see real leadership on these issues, but I do not believe we will see it coming from the Government benches any time soon.

The property market boosted our economy from the late 1990s until 2006 but the banking crisis has had a hugely negative effect on the property market as well as on personal lending and lending to small businesses. Banks are very reluctant to approve even a small loan, making it very difficult for stand-alone businesses and small investments.

Across our cities and small towns and villages we see many local shops pulling down their shutters. Those small local businesses were the life and blood of our communities. They were the places we met on a regular basis and where communities were formed. Unfortunately, many of them have had to go out of business not through their own fault, but through the fault of a Government that could not run this country.

Thousands of young people are finding it difficult to pay their mortgages, and one in 20 mortgages is currently in arrears. What is even worse is that the number of repossessions and properties that have been surrendered to banks is also increasing at a worrying rate. We all sat in disbelief the night we watched two couples on "The Late Late Show" who had to hand back the keys to their houses. Our hearts went out to them. Where are they now and who cares about them? The answer is nobody, other than their families and friends who put them up because the Government took the keys of their homes from them.

Many people accept that there must be cuts in the upcoming budget but those cuts cannot be made at the expense of the vital front line services in areas such as health and education. Demands on social welfare systems are increasing by the day and the current bill stands at €21 billion. That is not sustainable. We must address the issue of unemployment head-on and create new opportunities for young people coming out of school and college. We must do likewise for all the people who want to return to the workplace having been made redundant.

The Government has broken the hearts of parents and grandparents throughout the country as their children's future has been decided by the mess it has made over the public finances. For many young people the long road to emigration has begun. I have stood in airports where people shedding tears in departure lounges has become a sad but common sight. Many of those talented young people will never again set foot on Irish soil to share their knowledge and experience. That is a sobering thought.

All our children - mine, the Minister's and those of everybody else in the country - are precious to us. It is in this country that they should live. They should not have to run to foreign shores. If this mess had not been made by the Government that has spent the longest term in office in this country, we would not be in this position, and the Minister would not have had to stand where he was last week to announce the cuts. Deputy Kennedy should know that people are angry, and that anger will not go away. I agree with him. People must pull together, but it will not be anybody in this House that will do that. It will be the people in the communities who will pull together and bring this country forward into the future.

Michael Kennedy (Dublin North, Fianna Fail)
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The Deputy should be showing leadership.

Ulick Burke (Galway East, Fine Gael)
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I thank Deputy Byrne for sharing her time with me. Deputy Kennedy was very selective in his contribution when he said that the people and the international financiers have confidence in the Minister for Finance, Deputy Lenihan. He must have forgotten that two years ago the Minister for Finance told us that the bank guarantee would have little or no effect on the economy. It has destroyed the economy and has been directly and indirectly responsible for job losses, emigration, businesses closing down and the stagnation and loss of confidence in our economy. He said the bailout was to be the cheapest in the world but 450,000 people have lost their jobs and become unemployed, and 100,000 well educated young people have left our shores and emigrated. Some of those young people will not return. It has turned out to be the most expensive in many different ways, second only to that of Iceland.

The Minister originally estimated that it would cost €1.5 billion and it then changed to €4 billion. By March last year it had risen to €12 billion. It then increased to €29 billion and last Thursday - black Thursday - it finished up at €34 billion, and it may increase again. That, together with the bailout of AIB, Bank of Ireland and Irish Nationwide Building Society, will probably increase the figure to €50 billion.

Earlier in the debate we spoke about small figures and the HSE cutbacks in health throughout the country. What would all of those billions of euro, or even a small portion of those billions, have meant to the many people who are lying on trolleys or the 40,000 people on waiting lists who are in pain and those whose cancer care is being denied to them as we speak? Have we forgotten about that? That is the reality.

Originally, the banking problem was one of liquidity, according to the Minister for Finance. It then turned out to be a solvency problem. We were told we had turned the corner in the budget last year. I do not know what corner the Minister for Finance was talking about but could he repeat that in about a month's time when he is delivering his new budget, the first of four?

How could people have confidence in this Minister to lead us back into recovery, about which he spoke? He has been fooled by the bankers and poorly advised by Department of Finance officials. Those people were in place during the boom period and they failed, as did the Government, to see the dangers coming down the track. He has now resorted to accepting the proposals of Mr. Colm McCarthy, lock, stock and barrel.

The Government appears to have no policy in place to create jobs. It is the McCarthy cuts for us for the next four years.

Can the Minister of State provide us with a true picture of the state of finances in the Bank of Ireland? Can he truthfully tell the House and public that there are no difficulties in that bank and that we will not be asked later, when the other issues have been settled, to provide further funding for the Bank of Ireland to bail it out? It is important we know this now, particularly with Anglo Irish Bank gone off the horizon and the current situation with regard to Allied Irish Bank and Irish Nationwide. We need to know the true situation with regard to the Bank of Ireland.

The banks are failing to provide funding, even for small businesses which are the lifeblood of the economy at this time. When we agreed to bail out the banks, we were guaranteed that we were bailing them out in order to allow them provide funds and lend again. They were to lend to the people keeping the country going and small businesses that keep people employed. The Minister of State is aware that in towns like Ballinasloe, Roscommon and Athlone doors of once-thriving businesses on every street are locked and their blinds are down. This situation is replicated throughout the country, not just in the west. Somebody must take responsibility for this.

The Government and the Minister for Finance have failed to direct the banks to make funds available. Not long ago, we were told that significant funding was being provided for that, but nothing has happened. We were told that people refused loans by the banks could appeal to a review body. However, we could count on one hand how many refusals have been overturned by this body, which has been in place for almost 12 months. This body was to solve the difficulties in situations where people were refused finance and was to rectify the situation where they had been denied funds. It is important that the Minister for Finance re-examines the declarations he has made over the past two years and recognises that he has failed as Minister for Finance. I agree he inherited a difficult situation from his predecessor, the current Taoiseach.

Banks say they are currently approving loans. That may be the case but when business people seek a loan of, for example, €100,000, they are only granted €25,000. That is the type of approval that is being given and it is this type of approval that makes up the statistics on loan approvals which is broadcast by banks, particularly Bank of Ireland and Allied Irish Bank. They say they are lending, but businesses cannot take up these loans because they fall so short of their requirements. The required loans may not be for development but may be to help them maintain and continue their business until the tide turns. The Minister said that we turned the corner 12 months ago but it has proved to be a long turn for many business people. It is important that approval is given for the loans sought and that banking returns to what is expected of it by business people.

The tragedy of the current situation is that good business people who repaid their loans and invested money and borrowed and repaid again are being refused loans. These people borrowed and repaid many times, even at a time when interest rates were as high as 18% in the 1980s and early 1990s, in order to invest in and develop their businesses. They paid exorbitant interest rates at times but now all the banks want to do is call in their loans, reduce their overdrafts and deny them such facilities. This indicates how out of touch with reality the Minister is with regard to the current situation.

The Minister must recognise that there are many people in the country with significant funds, people who invested wisely during the boom in safe havens. These people have withdrawn their funds and are now afraid to invest them in banks. The credit unions are the only outlets for many people currently and if it was not for them, many people would be in dire distress. People have lost their jobs but have been supported by credit unions which recognise their dire needs. This is because the credit unions are community based banks rather than profiteers or greedy moguls such as populated the national banks that have caused the trouble here.

All of this money is available to the Government, provided it brings forward a sensible proposal to use it, such as happened in the 1950s when we had the ESB national loan. At that time, the public who had money to invest and wanted to invest in a safe haven, loaned it to the Government which guaranteed it by government bonds which yielded in the region of 4%. I urge the Minister to realise that many people throughout the country have significant funds, particularly people who provided land for major infrastructure, such as roads, who received moneys from the NRA for their lands. That money is lying someplace but it is not safe. It is a pity the Government does not take the initiative and bring back the idea of a national loan and provide a dividend to investors after ten or 15 years. That should be done.

I wish to draw attention to the issue of the media, particularly the print media economists, who are perched here over our heads on a daily basis. They have all become economists, giving advice and criticising those who have not brought forward plans. Last Saturday we saw such comments from the editor of the Irish Independent - somebody mentioned the Sunday Independent in a similar vein earlier - in a front page editorial. It is unusual in journalism that the editorial comment would so openly support such comment, but I remember that on polling day in 1997, the editor had the audacity to call it payback day. What was that but a veiled support of Government, nothing more or less? Sir Anthony's puppets have continued with such comment ever since. We had it again last Saturday but there has been a change. I will cite one or two comments from the editorial and allow the House judge for itself.

The editorial states: "Day after day on the airwaves, we hear celebrity economists offering contradictory opinions on Government strategy". All Sir Anthony need do is open one of the nrwspapers in his group and he will see it. The editorial continued: "The Minister has consistently invited rational debate, but particularly on TV and radio, the debate is frequently distorted by commentators and interviewers who look and sound authoritative, but whose grasp of the country's economic problems, not to mention its sovereign responsibilities, is deficient". Where was this commentator when difficulties were brewing over the past four or five years? Can he look in the mirror and say he pretended to be authoritative on numerous occasions and he failed? Is it any wonder the Government is being misled when it had commentators like him pronouncing on the virtues of these people down the years? He can say it was on television but he should read the pages of his own writers, many of whom are perched above us every day.

Michael Finneran (Roscommon-South Leitrim, Fianna Fail)
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There will be no need to resurrect The Irish Press.

Jimmy Devins (Sligo-North Leitrim, Independent)
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I welcome the opportunity to contribute on this important issue. Since last Thursday, the worry on everybody's mind relates to the future of the country. The country now faces the greatest challenge there has ever been. There has not been a greater threat since the foundation of the State. I do not say this lightly or for dramatic effect; I say it because I believe it implicitly. If this country was invaded by an enemy, there would be uproar and resistance. The challenges we face constitute a danger to our sovereign State just as great as any such invasion and perhaps even greater because they are insidious.

Like many Members, I am not an economist nor do I possess special expertise in this area but like the vast majority of the Irish people, I understand figures and they speak for themselves. We need approximately €50 billion to run the country every year and we are currently taking in approximately €30 billion. Added to that is the cost of the bailout of the banks, a figure that fluctuates between €35 billion and €50 billion in total. If I take the lower figure, it means that this year the State has to come up with a financial plan to bridge a gap of between €50 billion and €55 billion. We do not have the money and, therefore, ways must be found to bridge that gap. Whatever solutions are arrived at, there will be suffering and hardship. It is important that the less well off are protected to the greatest extent. Any country that calls itself a democracy has to make sure certain public services, be they in the health or education sectors, are available to all people, not just the well off.

That view is shared by all Members and all of us have the best interests of the country and our constituents at heart. We have had enough of inter-party wrangling and squabbling. There will be time to debate the reasons we are in this dreadful position but let us deal with the position and get over this crisis. I will use a medical analogy. The current debate reminds me of a patient lying on a life support machine seriously ill while around the bed those charged with caring for him or her argue and fight among themselves. Unfortunately, that will only have one outcome. I warmly welcome the call by a number of Fine Gael Senators to put aside party political infighting just as I welcome the Taoiseach's offer to share the expertise available in the Department of Finance with Opposition Members. I appeal not only to the leaders of Opposition parties but to all Members to consider carefully where we are as a country before they reject what has been said by colleagues.

The country is in such a perilous state that it is close to death's door. We need to look and think outside the box. All Members have a duty and responsibility to stop bickering and fighting among themselves. Let us recognise the crisis we are in and, more important, let us all work together to come up with solutions that will restore our country. If that means forming a government of national unity, then let us consider that. Every Member has talent, intellect and experience of life. With all of us working together, there has to be a chance the country will get out of this crisis. It will be much more difficult and likely to fail if we continue to operate as we have in the past putting party and self before the national interest. We have a life threatening disease which is threatening to put our country, as a sovereign stable democracy, at death's door. Let us all please put aside our differences, which in normal times are good and healthy. However, we live in extraordinary and dangerous times and working together, we can, we will and we must come up with the solution.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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I wish to share time with Deputy Costello.

I will read into the record the motion of no confidence in the Minister for Finance tabled by the four Sinn Féin Deputies:

"That the Dáil:

— expressing its serious concerns about revelations in the RTE Freefall documentary on 6 September, 2010 that Bank of Ireland Chairman, Mr. Richard Burrows and Chief Executive, Mr. Brian Goggin were informed by Anglo Irish Bank Chairman, Mr. Sean Fitzpatrick and Chief Executive, Mr. David Drumm, that Anglo Irish Bank was insolvent and requested a takeover of the bank;

— noting that immediately following this meeting Bank of Ireland management then contacted Allied Irish Bank and both banks immediately sought a meeting with the Minister for Finance, Deputy Brian Lenihan;

—further noting that following these meetings the Minister for Finance presented the Credit Institutions (Financial Support) Bill 2008 on 30 September, 2008 (the bank guarantee) claiming in the Dáil that the purpose of the bank guarantee was to deal with liquidity or cash flow issues within the Irish banking system;

— deploring the fact that the reality of the situation in Anglo Irish Bank was not revealed to the Dáil by the Minister for Finance before the passing of the bank guarantee;

— noting that due to the financial impact of the bank guarantee and the subsequent borrowing and the recapitalisation of the banks that the State's debt was being serviced at 6.8% in the week beginning 27 September, 2010, a record high since Ireland joined the eurozone; and

— noting that new estimates for the capital and recapitalisation costs of Anglo Irish Bank will reach €34.3 billion and that the total cost of the bank bailout will reach €49.3 billion;

has no confidence in the Minister for Finance, Deputy Brian Lenihan."

On Thursday, 30 September, the Minister for Finance, in a country with an €18 billion deficit and almost 450,000 people unemployed, stood before the House and announced that the cost of recapitalising this State's wayward banks would run up to nearly €50 billion. In carefully co-ordinated statements over two days, he moved to extend the bank guarantee and then reveal the details of the largest recapitalisation plan, proportionately, in the western world. On that day, the deficit in this State increased from 12% to 32% as a result of the announcement. The Minister does not have the mandate to implement a bank bailout of this scale. The Government is at record lows of support from the public. The largest stakeholders in this decision, the taxpayers, have no faith in what this Government is doing and they are being denied a say. Over the next decade, banks will be recapitalised to the tune of €50 billion in taxpayers' money will be put into NAMA operations.

The events of recent weeks smack of increasing desperation by the Government. First, we had the farce of the announcement of Anglo Irish Bank being split into a bad bank and a worse bank, with conflicting statements issued on their operation. The Anglo Irish Bank split involves Anglo deposits funding Anglo loans, but with two banks instead of one. When it became clear that this was not a solution but a demonstration of the incompetence of Government banking policy, the markets reacted as was predictable - our ten-year bond yields jumped a further 0.1% to 6.9%.

The Government has been adamant that bond yields are high due to uncertainty around the banks, without taking responsibility for the continuation and deepening of that very uncertainty through causing the economy to contract. It is clearly not in the taxpayers' best interests but, then, very little of the Government's policy on the banking crisis has been. NAMA is well on the way to becoming an expensive toxic sister of Anglo Irish Bank rather than a well-balanced asset recovery vehicle as originally envisaged by the Government. It is also becoming part of the problem rather than the hyped solution.

It should be remembered that NAMA was meant to help rescue the banks and get credit flowing. We were assured that it would make a profit for the taxpayer without disrupting or distorting markets or bailing out developers. It is not achieving any of these objectives. It will be too late to prevent the transfer of tens of billions of euro from taxpayers to wealthy private individuals, some of whom are certain to be domestic.

The scale of the money being casually distributed by the Government to the banks is incomprehensible to most people. To put it into perspective, we endured an entire year of lectures last year from the same Government about the need to reduce the deficit in the December 2009 budget. It took €4 billion from people's wages, social welfare rates and public services. The Government plans to take another €3 million to €4 billion from the economy at the end of this year, yet last week it committed us to spending nearly €50 billion on bank recapitalisations. What the Government forgot to mention was that this did not even begin to cover the cost of NAMA. This banking bailout will hit the taxpayers to the tune of some €85 billion, most likely over the years ahead. This means that every year, as the Government reduces the deficit, it will be adding a few billion more onto it to meet commitments to the banks.

Fiscal retrenchment from Government will undermine growth. At this rate the economy will be running to stand still for the next ten years at least. To attempt to repair the damage of such a huge financial crisis and return the State's debt to its previous level in just a few years places an intolerable burden on ordinary people. This is self-evident to any elected representative in this House.

Sinn Féin does believe the deficit needs to be reduced. However, we differ from every other party in believing that there is a way to do this, based on economic growth and an overhaul of the tax system. Sinn Féin recognises that the deficit caused by the disastrous policies of the Government has to be reduced but the plan to reduce it by 2014 by imposing savage cuts to public services, will be hugely damaging. It will deflate the economy and worsen the recession. This plan will cause huge hardship by cutting vital public services and social supports in health, education and social welfare. We are against cuts to public services and social supports but we support eliminating wasteful public spending where it exists.

We need a different strategy and a longer timeframe. We want a realistic deficit reduction strategy based on a fairer tax system, investing in jobs, which will increase State revenue and reduce the social welfare bill and eliminating wasteful public spending. We believe a stimulus will reduce the deficit. We believe that the Government's front line spending cuts plan is not merely unfair but is failing to reduce the deficit in any meaningful way.

Fianna Fáil's approach to the economy is self-defeating. By focusing almost exclusively on bailing out the banks, the Government has lost sight of what is really important. It has so far refused to tackle a jobs crisis that continues to spiral out of control. They look to children, old people and the sick to try to plug the hole left in our public finances arising from a decade of risky, speculative and corrupt practices undertaken by Government, bankers and property developers.

This Government has always placed private profit before the public interest, property before people and the demands of the wealthy before the needs of ordinary citizens. That is the mentality that has led to the current economic catastrophe and it is the same mentality that is being brought into to the forthcoming budget. We need a new Minister for Finance, make no mistake about it and we need a new Government and, most important, we need a totally new direction and radically different politics. Those politics must bring new policies that must be based on sound principles, the very principles that we celebrated on 20 January 2009 in the Mansion House. They are in the words of the First Dáil's democratic programme which we celebrated on its 90th anniversary:

We declare that we desire our country to be ruled in accordance with the principles of Liberty, Equality and Justice for all, which alone can secure permanence of government in the willing adhesion of the people.

I rest my case and conclude by saying it is very regrettable there was not a motion tabled by which we could force the Government parties and their supporters within the Independents to go through the division lobbies. Statements simply do not meet the bill.

Joe Costello (Dublin Central, Labour)
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Nearly one week later, the enormity of the bank bailout is staggering. Thursday certainly was a black day and it will be recognised in the future as black Thursday. That Anglo Irish Bank could require a bailout of between €29.4 billion and €34.4 billion boggles the mind. We seem to think only in billions now with regard to bailout and recapitalisation whereas in the past, figures had a real value. These figures now are multiples of billions. The total is close to €50 billion or may be more than this when it bottoms out, when we have a final figure for AIB, Anglo Irish Bank and Irish Nationwide Building Society. When this is combined with the annual deficit for this year of in the region of €80 billion, less tax take over expenditure, we are looking at an appalling vista.

This vista is facing every man, woman and child in this country. It was created by the greed, deception, fraud, lies, the corporate crime of the bankers, the financiers and by the lack of regulation, supervision or monitoring by those who should have been in charge. At the top is the Government which allowed light touch regulation or no regulation to continue over an extended period. Nobody called halt. The Minister of State's Government has been in power for the past 13 years yet it never cried for a slowdown. The mantra was a soft landing. There not could possibly have been a worse landing. There is no landing, it is a bottomless pit we have sunk into and we are not sure we have reached the bottom yet.

The ordinary people of Ireland question how nobody has been brought to justice or charged with an offence. This has been a colossal robbery of money from the people. Nobody has been arrested, not to talk about charged or convicted. This is one of the big scandals of this situation. It is bad enough to have all that money gone but nobody has been held responsible or accountable before the law. To the ordinary person it seems there is one law for the rich and another for the poor. People are angry and disgusted with this and it goes against people's innate sense of fairness. They feel frustration and helplessness and the Government does not realise this. Someone 100,000 people emigrated in the past two years and the USI stated that 100,000 qualified students are on the dole. The number of people on the live register has increased to 450,000 people. This is the human face of the bank bailout, the bank guarantee and the disastrous way financial institutions and the political masters handled the economy over recent years. We are facing this bleak future and the Minister for Finance has got it wrong from the first day. This was supposed to be the cheapest bailout in the world, in the exact words of the Minister, and at every stage there was to be a return. NAMA was to make a profit but that would be hard to see. We were supposed to get our money back but there is no question of getting our money back. More and more has been poured in. The Minister and Ireland should be in the Guinness Book of Records for the largest and most expensive bank bailout in the history of the world proportionate to our population and the size of the country.

We must look to the future when responding to this. We must try to create some hope for people. We must consider the picture in the context of what has been announced. Virtually all bets are off in terms of what was promised by the Government. The national development plan was designed for 2007-13 but it is gone out the window. Its replacement in July was the infrastructural development plan for 2010-16 and that is gone out the window. It referred to investment in every Department but we have no money to invest. Where will we get the money for investment? We recently discussed metro north, a matter I am considering carefully in the current economic environment. What projects in the national development plan can be brought forward on the basis of cost-benefit analysis of their delivery, economic activity and job creation? The major transport projects in Dublin include the Citywest line, the DART interconnector, metro west, the Luas BXD, the Lucan Luas and metro north. These are multibillion euro projects. We must pick and choose to ensure that serious capital projects costing an awful lot of money provide the best return. We must review the national development plan that was launched a number of months ago.

Dublin Bus must operate with a reduced public service obligation and with 100 fewer buses. Iarnród Éireann cannot afford carriages for an hourly service between Dublin and Belfast and the Minister for Transport is threatening to abolish the €15 million public service obligation for regional airports. This would destroy business and tourism connectivity throughout the regions, a point of which the Minister of State, Deputy Dara Calleary, should be aware. Such a sum could destroy connectivity, communications and tourism from the north west to the south. This also applies to billions of euro of other capital projects.

In this context, I am disappointed with Deputy James Reilly, deputy leader of Fine Gael, who fails to realise the reality heralded by Black Thursday when he attacks the Labour Party for exercising caution in this respect. Thankfully, his party leader, Deputy Enda Kenny in a major statement on 27 February 2009 recognised, like the Labour Party, that a blank cheque cannot be written for any project in the national development plan until the value of each project has been assessed in terms of job creation and downstream economic activity. In an article in The Irish Times he stated:

We will look at which infrastructure projects can be safely deferred or abandoned. That means that some projects, like the metro projects in Dublin, would be put on the backburner. We would scrap the old National Development Plan and reprioritise smaller, labour-intensive projects that can keep as many tradesmen and builders employed as possible.

I agree entirely with that. It is the position of the Labour Party and we are at one with it. It is about time the deputy leader of Fine Gael spoke to his leader so that they sing from the same hymn sheet.

Jan O'Sullivan (Limerick East, Labour)
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Deputy Costello's time has nearly concluded.

Bernard Durkan (Kildare North, Fine Gael)
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I was so enjoying Deputy Costello's contribution.

Joe Costello (Dublin Central, Labour)
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I am sure Deputy Durkan agrees with me on this matter. It is clear the Government is clueless, leaderless and floundering from crisis to crisis. The Government is well past its sell-by date and it is time to listen to Deputy Mary O'Rourke's suggestion to go to the country.

Bernard Durkan (Kildare North, Fine Gael)
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I apologise for appearing in this state of undress before the House.

Jan O'Sullivan (Limerick East, Labour)
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Deputy Durkan looks very elegant.

Bernard Durkan (Kildare North, Fine Gael)
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I assure the Acting Chairman I was otherwise engaged and had to leave in a hurry. We have gone over this issue several times in the past two years. Two years ago, there was a three-year recovery plan and figures of €4 billion and €3 billion were mentioned. Two years later, we have a new four-year plan.

Joe Costello (Dublin Central, Labour)
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Starting now.

Bernard Durkan (Kildare North, Fine Gael)
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That is the frightening thing the public is concerned about. The public relies on people to make judgment calls and this is what we have been talking about for the past number of years. A judgment call needed to be made three years ago but was not made. The problem has been allowed to continue to such an extent that this country is at the mercy of the markets. That is the sad part of it. In order to recover, we are expected to pay interest rates of over 6.5% at the same time as a large proportion of our population is suffering from negative equity and mortgage arrears. In some cases one or both of the partners in the household are unemployed. If they are both employed, they have childminding costs that amount to €2,000 a month in some cases. That sum has dropped but it amounts to a mortgage in itself. We also have the potential threat of water charges, property taxes and a series of other charges. What is emerging is an accountant's view of how to balance the books but what is required is a judgment call to determine the extent to which the books can be balanced and society can withstand the negative impact. That is of great importance.

Let us consider some of what has come and gone in recent times. We know the figure we are talking about is approximately €50 billion. We presume this is correct. It has taken two years to arrive at this figure. In most other countries, such as Iceland and the United States, forensic auditors enter institutions and produce an initial report within four or five weeks, wrapping up within six months. They know where everything has gone wrong, they point to the guilty and action is taken. It is no solace to any of us to see people penalised for what was done wrong but things were done wrong. Unfortunately, the people of this country must pay for it. What would irritate me most of all would be to discover that someone had a swanky bank account in a far-off place. That would worry me and it would worry the people of this country. For the sake of society, I sincerely hope that it does not happen. I would like to know who are the bondholders to whom we owe so much at present.

Like Deputy Costello, I have been a member of the Joint Oireachtas Committee on European Affairs for some time. One of the things to which we have become alert is that within the European Community there are some countries that are not as committed as others. Some countries would love to see part of the eurozone break up. If any one country within the eurozone is put under such pressure to the extent that they are incapable of repaying their debts, or appear to be incapable, which is a different matter, then not only would there be problems for the country in question, but also for the entire European project. That would have serious consequences.

Two years ago the Government sought and had the power to put through the bank guarantee scheme. I was not happy about it at that time. I pointed out that there were several pivotal people who should have been asked to give information and to account for themselves before any such guarantee was given. I also pointed out that the pivotal people concerned were obviously acting according to Government policy so responsibility had to be taken. That is no offence to the Minister of State, Deputy Calleary, sitting opposite. He was not responsible for it. As a matter of fact he was only a lad at the time. He was not in the House when most of that was happening. However, there can be no escaping that someone knew what was going on and that it was decided somewhere in the system.

Now the problem is that everyone says all the politicians were to blame. I congratulate the Government parties. They got away with that one because now the odium has been passed on to all of us. An appalling thing has been done. Not only that but everyone is being blamed to the same extent as those who were directly responsible. It may be good and it may sound great that a man approached the Houses of Parliament a week ago with a concrete mixer. He was hailed as a hero because he crashed into the gates of the Houses of Parliament. It is obvious that he did not know that decisions are not made in Parliament. They are made by the Executive in Government Buildings. Someone should have told him the difference between Parliament and the Executive. I cannot understand how any adult can fail to grasp that distinction. I do not suggest he should have done that, but he could have walked up the street and protested at the bank to which it is alleged he owes a substantial amount of money. That is not what happened. What happened is that the location of the people's representatives - the Houses of Parliament - was attacked. That is a dangerous thing. If matters continue in that direction, this country will have much more serious problems within the next couple of years.

We now need to know who the famous bondholders are, both the primary and the secondary ones. I am sick of the jargon about subordinate bondholders and primary and first bondholders. We all know what it means - the first charge and the second charge, the high risk and the low risk and the short risk. We also know that one has options when one invests. One can take a high risk, high return option or one can take a low risk, low return option. Those options are open to investors everywhere, but for some unknown reason it is now expected that we, the people of this country - every man woman and child - will pay back for the high risk, high return option because it did not come off.

Many of my constituents go to the races on a regular basis. I must say this for them, they never come home from the races having lost their shirts and blame anyone else. They are philosophical about it. They know that when they place their money on the long odds that it could come up; it does occasionally and then we hear all about it. However, they also know that for every time it comes up, there are an awful lot of other times where it does not.

Joe Costello (Dublin Central, Labour)
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They always keep another shirt for the rainy day.

Bernard Durkan (Kildare North, Fine Gael)
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They do indeed.

Another issue I have examined with some cynicism is the degree to which experts attempt to suggest that the Members who are elected by the public are a crowd of idiots and that if the experts had been around those things would not have happened. I hasten to remind them that most of the problems we now have are as a result of people following expert opinion. As we all know the experts are available for consultation purposes. They are paid a fee. They are guns for hire. They will give virtually any expertise on the basis of the payment made. It depends what one asks for. The important thing we all need to know whether we are in Government, a Minister of State, or a Deputy is the basis for their conclusions. That is when they run into some difficulty.

I reject the notion that the cause of our problems has been the stupidity of the elected Members to the Houses of the National Parliament. Instead, I point to the number of times some of us had the temerity to raise those issues in the past ten years. We were told to clear off, that we did not know what we were talking about, that there were quicker and slicker ways and much more remunerative ways of doing it and that they would show us how. They did and now they know. I take no pleasure in the situation that is now emerging.

A large number of high-profile people in this country secretly lost their shirts and are very annoyed. I am sorry for them but they should not attempt to take it out on everyone else. They should not attempt to off-load the responsibility and guilt on everyone else. Suffice it to say that the more bitter they become, the more suspicious I become. They can continue along that road for as long as they like and the only result is that they will reap the whirlwind themselves. That is what history has taught us. We are all historians. We would not be here unless we had little knowledge of it.

The question is whether the people of this country will be able to pay back the €50 billion on the basis of the proposals put forward by the Government in recent days. My bet is that the answer is "No". There are more and better ways to achieve the same objective without the same broad-based, scorched earth approach. I do not see how it is possible to raise the €50 billion and the €18 billion that is required to bridge the current deficit, which may increase further if the economy contracts, and at the same time to generate growth and employment in the economy. It cannot be done.

We have now imposed on the country the equivalent of compound interest. It has been imposed on businesses and mortgage holders throughout the country who have fallen into arrears. We advise our constituents on a regular basis that there are a number of fundamentals. If one needs to work oneself out of a debt problem, such as many people in this country now face, the most important thing is to find out one's income and to calculate whether there is a possibility of working one's way through the debt over a period of time. If, in the event that one's income is insufficient - or in this case revenue - to do the job it is intended to do then one has to take other measures. One has to liquidate some of the assets. That is what we advise constituents to do. First, we approach the lending institution in question with an offer of a settlement. The alternative is to have compound interest applied. Every time an instalment is missed, it is multiplied and every three months the debt doubles. An extraordinary situation arises very quickly. Let us add to that the fact that this country is expected to borrow at the rate of 6.5%, which is approximately 4% higher than the other economies in Europe.