It is six weeks since the guarantee given by the Government and approved by the House and 10,000 jobs are being lost around the country per month, the vast majority in the private sector. The small business sector, which comprises businesses that employ low numbers — three, five, ten or 20 — is in crisis because it is unable to get credit. Banks have called in overdrafts, credit lines have been tightened and machinery is being seized. Business cannot operate in such circumstances and many people believe that they cannot go on.

Unless the Government acts to allow credit lines to flow through the financial systems and business to be conducted, the sector is facing a jobs decimation over the next six months. I am not the only person discussing the protection of thousands of jobs in small businesses. The Small Firms Association has rightly pointed out that, unless the Government acts, there will shortly be a jobs implosion. What are the Government's proposals to recapitalise the banking system so that thousands of jobs can be protected in the near future?

Six weeks ago, we decided on a guarantee scheme to provide improved liquidity in the banking system because we wanted to ensure that sufficient lines of credit would be available to small, medium and large businesses. Were the decision not taken, we would be facing a difficult situation. The situation continues to be difficult.

As a result of the scheme's agreement in the House, business plans and capital ratios are being investigated and the question of liquidity in the banking system is being examined at the behest of the Financial Regulator and the Central Bank. This work is at an advanced stage and reports to the Minister are imminent. It is important that we act on up-to-date and accurate information. I want to make it clear that the Government stands ready to make decisions that are in the interests of the economy and business and to consider all options, not just a specific option. Much of the information involved is commercially sensitive and it is important, therefore, for the House to realise that the work which is ongoing and which is being advanced will be considered by the Minister for Finance, in the first instance, and the Government in the coming days.

Since the Taoiseach entered office, the process of government has been characterised by indecision. An economic lifeline is required for small businesses. There is no point giving a blood transfusion when the patient has died or in providing capital flows through the banking system after businesses have closed. Some 10,000 people are joining the dole queues each month. I travelled throughout the country in the past two weeks and discovered that small businesses everywhere are in crisis. These businesses cannot obtain credit and their overdrafts are being called in. They will be obliged to shut up shop early in the new year.

This is a crisis and if the Government does not act quickly, thousands of jobs will be lost. This matter is not about the banks, it is about their customers and the protection of Irish jobs in Irish firms. The Government has ignored all the warning signs, from the events of the property boom through to the adverse financial indicators. We have reached the stage where people will be obliged to pass the keys of their houses back to the banks in the new year if the Government does not act. The Government must find a formula in respect of recapitalising the financial system in order that credit might flow through it and that business might be conducted.

People in every county are approaching Deputies from the Taoiseach's party, my party and other parties and stating that they cannot continue as they are doing at present because the position is too tight. Banks cannot lend on a long-term basis unless they can secure capital on the same basis. Does the Taoiseach accept that there is a need for recapitalisation, that there is a need to have credit lines flowing through the banking system and that thousands of jobs in the small business sector are on the line and will be lost unless the Government takes action?

What is the Taoiseach's plan with regard to recapitalising the banking system so that small businesses might survive and remain in operation and in order that jobs might be protected? It is about those jobs that I am concerned. I would like those involved in small businesses throughout the country to hear the Taoiseach's response with regard to what the Government intends to do to save the jobs to which I refer. What are his intentions in the context of recapitalisation?

I made it clear that the Government will continue to act in the overall interests of Irish business in order to ensure that employment remains at the maximum level and in order to maintain financial stability. We will do so on the basis of the most up-to-date information and accurate analysis of the material provided by those acting on behalf of the Financial Regulator, the Central Bank and Financial Services Authority of Ireland. We will not act in any other way. There is a number of major options available to the banking sector.

Capitalisation alone does not guarantee the access to credit we desire for Irish business. Recapitalisation has taken place in respect of certain banks and this has enhanced the capital adequacy ratios of those institutions without necessarily changing their lending policies. I will be insisting that in the business plans that have to be devised by those institutions covered by the State guarantee scheme, adequate lines of credit must be provided for Irish business. If the banks fail to make such provision, their business plans will not be accepted by the Government. We will be insisting that this mechanism be used as both an effective practical step and a means by which we can ensure that the banks meet their wider responsibilities.

The idea that recapitalisation alone can provide the means by which increased lines of credit might be accessed by business interests is not, despite the Deputy's suggestion to the contrary, a comprehensive one. There is every indication that the acquisition of capital might, as already stated, improve the capital ratios of the banks without increasing the lines of credit available to businesses. We are in an extremely difficult situation, the ramifications relating to which are extremely broad. The Government will take whatever decisions are necessary in the national interest.

When?

Those decisions will be in line with the most up-to-date analysis and information. The market acts on herd instinct and not always on full information.

Bank of Ireland shares are trading at 90 cent today.

The Taoiseach, without interruption.

Yes, but even if Bank of Ireland's shares doubled in value tomorrow, its capital would not double.

I know that.

The point is——

I am more interested in jobs.

I am also concerned about jobs. I did not interrupt the Deputy during his contribution.

Down in Tullamore as well as everywhere else.

What we need to do — this has been happening — is discover the level of impairment going forward in respect of bank loans.

We asked about that matter weeks ago.

An investigation in this regard is at an advanced stage. The level of impairment to which I refer can affect the capital of banks. On the issue in hand, namely, Irish business, the real question that arises is how we can ensure that lines of credit will be made available. We do so by ensuring the banks' business plans are adequate in this regard.

There will be no point coming up with solutions when businesses are closed.

The other matter, which is separate from this one, relates to the capitalisation of the banks. All options are being considered in this regard.

The Taoiseach must act now.

The Government should take control of the banks.