I welcome the opportunity to speak to the House today on this important matter. It gives me, and my Government colleagues, the opportunity to contextualise the issues that have been debated publicly recently. Or not debated as the case may be.
In the short time I have available to me, I would like to remind the House of how we came to a situation where IBRC came into being in the first place. This will make uncomfortable listening for Fianna Fail.
I would then like to outline the actions taken by this Government to secure the banking system, which was on the brink of catastrophe, and how we brought about a stabilisation in the sector. This will make uncomfortable listening for Sinn Fein and many on the Independent benches.
Finally, I would like to express my belief that the Commission of Investigation will report in a timely manner, and bring about transparency and clarity. This will make uncomfortable listening for both Fianna Fail and Sinn Fein.
ANGLO IRISH BANK
To begin, let us be absolutely clear why we are even having this debate.
During the Celtic Tiger, Fianna Fail woefully mismanaged the Irish economy, overspent, undelivered and failed to properly regulate the sectors most closely associated with it, in particular the banking and construction sectors.
This resulted in a light-touch regulatory regime for Irish banks which in turn led to a banking sector which was grossly out of proportion to the size of our economy.
Eventually, that banking sector collapsed upon itself, impoverishing many, many Irish people, destroying jobs and forcing many- mostly young- people to emigrate from this country.
To compound the problem, the Fianna Fail Government introduced a blanket guarantee of the banks in September 2008, a decision that would end up costing the Irish taxpayer, who would become liable for the debts and the obligations of Anglo Irish Bank and Irish Nationwide, almost €35 billion.
That is the context for this debate.
That is why we are speaking about the need to protect taxpayers’ money, the need to ensure that the State got as good a deal as possible, and the need for transparency in the workings of IBRC to ensure the public interest was protected.
Without Fianna Fail, Anglo would not have failed, IBRC would not be in existence and we would not be having this debate.
IBRC
Upon coming into office in 2011, and surveying the wreckage of Ireland Inc, it is no understatement to say that this Government was charged with rescuing this country. Unemployment was skyrocketing, the era of net inward migration was over and a sense of doom prevailed.
The chances of the Government reversing this situation were estimated by some to be nil.
But reverse it we did, with the support of the Irish people.
In terms of the banking sector, and this Commission of Investigation in particular, it was the previous Government that in 2009 put in place the relationship framework under which the transactions at the centre of this debate are being discussed.
Minister Noonan’s predecessor said- and I quote- ‘The bank will be managed on a commercial basis at arm’s length from the Government, allowing the full potential of its business be realised’.
That is the framework under which the bailed out Anglo, later IBRC, operated.
Not satisfied with this, it was this Government that in 2012 revised that framework to provide greater oversight by the Minister- and rightly so.
The next step to getting as good a deal as possible for the Irish taxpayer was Minister Noonan’s skilful negotiation to restructure the onerous promissory notes, resulting in the liquidation of IBRC in February 2013, removing Anglo and Irish Nationwide from our political and economic landscape.
As a result of that negotiation, the State’s borrowing requirement was reduced by €50 billion over the next decade. Simultaneously, we restored our international reputation, restored creditor confidence and restored relations with our EU partners.
We did this in the face of a maelstrom from many on the left who spoke of default, who imagined somehow we could walk away from our obligations.
Sinn Fein and others imagined we could find another way to pay for schools and hospitals, guards and nurses, without paying back our debts.
I say this not to make a political point but to make an economic one- our success in sorting out the banks in a prudent and responsible manner impacts directly on our ability to fund the vital social services that this country needs.
From a failed bank, to a recovered bank, to a liquidated bank. From money wasted in the past by the previous Government, to as much money as possible saved by the current Government.
That is the context of this debate.
FROM INQUIRY TO INVESTIGATION
I believe the decision to set up this Commission of Investigation to be the right decision. And here’s why.
I have been described as many things in this House in recent weeks. A Keynesian is not one of them. But I do agree with John Maynard Keynes when he said ‘When my information changes, I alter my conclusions. What do you do, sir?’.
The decision to wind down the review of the Special Liquidator and establish this Commission of Investigation has been questioned by some.
It is the right response.
When issues relating to IBRC first came to light, the Government believed the then review was the appropriate mechanism to get to the bottom of things.
When further issues came to light, thanks in part to interventions by Deputy Catherine Murphy, it became clear that a wider, deeper investigation was needed.
I believe we have matured as a country by getting to the point where the Government of the day can listen calmly and rationally to other viewpoints, from other sides of the House or from outside the House, and consider those points on their merits.
It is what happens outside the Dail all the time.
MINISTER NOONAN
I fully support Minister Noonan’s actions in this regard. He admitted that when things had changed, so too would his approach.
It was the right decision to take.
I believe this highlights again his exceptional performance as Minister for Finance in what were horrific circumstances for our country.
THE TERMS OF THE INVESTIGATION
I want to touch on the terms of the investigation. It seems to me that the open-minded approach to setting up the Commission has been repeated in the Minister’s agreement to widen its scope along the lines suggested by others in this House.
We must have a thorough examination of all of the facts.
The truth must come out. This must be balanced against requests to continually widen the terms of reference.
And I would say there is something incongruous in hearing Deputies complain that the Commission of Investigation will not report by a certain time while at the same time asking for it to investigate more and more material.
We must also recognise the independence of the figure who leads the Commission of Investigation and allow them the scope to determine how they conduct their work.
However, what is clear is the greater the transparency, the better. The more light that is shone on aspects of the economic collapse and its legacy, the better.
That way, we learn lessons, and avoid repeating the mistakes of the past.
CONCLUSION
To conclude, I do not know what the outcome of the Commission of Investigation will be. That is why we need this; to respond back in an impartial way to areas of concern. I echo Minister Noonan’s comments that there is currently no proof of any wrongdoing.
I echo my own comments of earlier that this situation is one we inherited. These transactions were not the Government’s responsibility and, in any case, the relationship framework between the bank and the State at the time of many of these transactions was one we inherited.
Many of the responses of this Government have been with a view to ensuring transparency and clarity are brought to situations. That is why we established the banking inquiry and why we are proceeding in this case in the most appropriate manner.
The collapse of the Irish banking sector will leave an economic and psychological scar on our country that is unlikely to ever disappear. But, if this Commission of Investigation goes some way towards further understanding the consequences of the banking collapse, that can only be a good thing.
ENDS