I was surprised to see the Minister for Finance announce at the weekend that the Government was not aware of the extent of the economic tsunami coming to our shores until July, after which its members went away on their holidays. I had thought the budget being brought forward by a number of weeks was the economic plan for survival for the country's economy and the road to the future for economic recovery and the protection and creation of jobs. The fact of the matter is that since then the Government has demonstrated it is rudderless and leaderless, and has neither coherence nor competence. In fact, the Minister's declaration was nothing other than a declaration of unfitness for office and unfitness to serve, and it particularly pointed at the Taoiseach himself in that he was Minister for Finance for a number of years before taking up his present position.

For 11 weeks since the Dáil passed the deposit guarantee legislation, we have waited for a decision in regard to recapitalisation of the banks and we have simply pointed out that businesses are in serious difficulty, there is no access to credit, overdrafts are being squeezed and 35,000 people have lost their jobs since that legislation was put through. At 8.45 p.m. on Sunday, an announcement was made not of action but of inaction with regard to the provision of €10 billion for recapitalisation of banks. The statement was vague, unconvincing and had neither specifics nor a strategic plan attached to it. It has failed to reassure anyone that the Government has a coherent plan to stabilise the banking system so that credit can continue to be provided for small businesses throughout the country.

As the Minister was unable to answer any question comprehensively on Sunday night about the Government decision taken on Sunday, will the Taoiseach clear up the confusion by answering a number of questions in this regard? First, when will the Government provide this €10 billion fund for recapitalisation of the banks? Second, what amount of money is to be provided by the Government from the National Pensions Reserve Fund either as preference shares or ordinary shares, or is any to be provided from that source? If that is the case, when does the Government propose to introduce the change in the legislation which will be required to get authorisation from the House to provide money from that source?

Is it the Taoiseach's intention to force or pressurise the banks so that, for example, by the end of January they will demonstrate they have internationally accepted levels of capital adequacy ratios available? Is it his intention to tell the banks it is not just the case that if the banks want to recapitalise, it is at their own discretion? If we are serious about protecting jobs that are now under serious threat, and about maintaining the economy throughout the country then, given that the Government is deep into the banking sector, as the Minister for Finance has said, it is in a position to exert leverage on the banks in a way that will guarantee that if the Government allocates money from the National Pensions Reserve Fund, it will actually flow as credit when required, particularly to small businesses to keep them alive. Is it the Taoiseach's intention to seek an assurance from the banks by the end of January that there will be an adequate, internationally accepted capital ratio in place? How does the Taoiseach intend to proceed following the vague announcement made on Sunday night?

It is important to point out that the covered institutions meet the capital adequacy ratios set out under regulatory requirements. In a statement on 28 November last, the Minister for Finance indicated his position and that he was prepared to supplement and encourage private investment in the recapitalisation of credit institutions in Ireland with State participation. On Sunday in a further positive signal to the market, the Government decided either through the National Pensions Reserve Fund or otherwise, and subject to terms and conditions, to support existing shareholders and private investors where appropriate with a recapitalisation programme for credit institutions in Ireland of up to €10 billion. We released a statement on Sunday evening setting out the main principles that would guide us in our approach to recapitalisation of the banking system.

The statement also made clear that the next step was for the Minister for Finance to initiate detailed engagement with the credit institutions in respect of specific proposals. Institutions have been asked to submit their proposals by early January. In the context of a commercial transaction, it would not be appropriate or sensible for the Government to pre-empt the detailed and technical issues that might arise in respect of the design and execution of any recapitalisation of any particular institution. It would certainly not be consistent with ensuring the Government secured the best possible outcome for the State from such a deal. Based on the statements of last Sunday we will move this dossier along as we have indicated. We sent a positive signal to the markets concerning the level of contribution and supplementation that the Government is prepared to make in respect of this issue.

I emphasise that covered institutions meet capital adequacy ratios. There is a perception in the markets internationally of the need for banking institutions to further recapitalise in addition to meeting capital adequacy ratios. It was in that context that we wanted to send a positive signal to the markets. This matter must be taken in the way we have set out.

I refer to the question of the lending criteria of banks. The whole purpose of recapitalisation in the banking sector is to ensure that the real economy is provided with the maximum amount of lending possible in current circumstances. The banks appeared before a committee of the House this morning and outlined their position in detail on this matter. We continue to seek the provision of business plans from the banks as a means of ensuring transparently that they will maximise lending to the small and medium enterprise sector and the Minister for Finance maintains this view. Should recapitalisation take place we will see further confirmation of that fact.

The reply does not deal with many of the questions asked. The Taoiseach previously said that moneys would only be provided as a last resort, but now says money may be made available from the National Pensions Reserve Fund, or otherwise. What does that mean? Do the plans involve venture capitalists from abroad or other sources of private equity? My understanding was that business plans should have been provided to the Government following the detailed discussions with the banks. The statement on Sunday merely buys time for the Government to the extent of several weeks. We do not yet know of the specific date when the Government intends to implement this plan. Credit is going down the tubes and 35,000 jobs have been lost. I can see from travelling throughout the country that the keys of business premises will be thrown back at banks by the end of January and February.

My call for a recapitalisation of the banks several weeks ago was based on genuine concern. If it was genuine concern then it is a good deal more serious now. The Government requires the authorisation of the House to take money from the National Pension Reserve Fund for recapitalisation. When does the Government propose to introduce that legislation? Will it be this week or when the Dáil resumes following Christmas?

The Minister for Finance said one could not expect the people who led us into this mess to lead us back out of it. The same applies to the Government, because it was the Minister for Finance who said the reason we are in this mess is that this is where the people wanted us to go and that the housing boom was based on low interest rates from the European Central Bank. Will the Taoiseach comment on this and on whether the Government intends to set new capital ratios for the banks?

Another essential element of economic recovery is managing the national pay awards. I am at a loss to understand the Government position on this matter. Although other Ministers said this agreement would be paid, the Minister for Health and Children said on Sunday night that money would not be provided for the Health Service Executive next year. Do I take it from the Minister for Health and Children's statement to the nation that the revised health programme, approved by her, is predicated on the basis that there is no money for that revised programme in the HSE budget? I remind the Taoiseach of his comments to the effect that money was not provided for the national pay awards for the HSE next year. Will the Taoiseach confirm who is telling the truth? Is it the Minister for Health and Children or the other Ministers? What is the position regarding her statement on Sunday night? Will the national pay deal proceed or not? I have publicly given my view on this matter. The Taoiseach said he issued a statement saying the matter would be discussed with the unions, but later the same night another statement was issued stating something else. What is the position?