The Taoiseach will have studied the assessment made by the International Monetary Fund which concludes that Ireland will pay a higher price to re-stablise its banks than any other country and that the cost to the Irish taxpayer may be €24 billion, the biggest Government bail out of banks of any developed country. He will also have seen the opinion piece written by Professor Krugman in the New York Times this week in which he warns other countries against following the Irish Government’s example on the banks, which he described as an exercise in sacrificing the economy in order to save the banks.

The Taoiseach will also have seen the opinion from 20 economists from a wide range of economic opinion and perspectives, and differing ideological standpoints, in which they argued that the game is up for the Irish banks and there is now an inevitability that the Government will have to nationalise them at least temporarily.

Does the Taoiseach agree with the assessment of the International Monetary Fund that our banking situation, in terms of the Government bailout, is now the worst in the developed world? Does he consider it a damning verdict on his Government's handling of the banking situation? Does he accept the point has been reached where it is necessary to nationalise the banks, at least temporarily, and what consideration has the Government given to that matter?

On the first point Deputy Gilmore raised, as it happens the figures quoted in the newspapers this morning suggesting potential loss rates on foot of supports to the banking industry for Ireland do not appear in the IMF's final global financial stability report. I understand there was a figure in an earlier draft which the IMF did not use in the end. These figures should not be relied on as a measure of the likely cost for Ireland or any other country, although, from the point of view of the IMF, they may well be of use in calculating financial strains at a global level. The particular figures appear to be based on more or less mechanical application of various modelling tools, with a heavy reliance on technical assumptions. They do not represent the outcome of a specific examination of Irish banks' assets such has been carried out on behalf of the Financial Regulator by PricewaterhouseCoopers.

The principal reason the IMF approach gives a relatively high figure for Ireland is that our bank guarantee arrangement is broader ranging than that in other countries and our financial sector is larger relative to the economy. Obviously, we are open at all times to discussion with international institutions about technical assumptions they apply to the Irish case, but in the current case we are far from convinced that there is a significant new or additional informational value in the figures presented from a national point of view.

I understand from media reports that, following contacts with the UK authorities, figures on the UK in the final report have also been amended.

On what Professor Krugman or any other eminent economist or number of economists might be saying about the banking system, we are very much of the view that we stand ready to assist in relation to financial institutions of systemic importance. The question of impaired assets and how one deals with assets in this situation will be in line with the EU guidelines in these matters. The tool kit available to us is the same as that available to other countries.

As the Deputy will be aware, we have already provided support on the basis of getting a return for the taxpayers' money that we have invested in preference shares thus far. The Minister for Finance has indicated that, in the event of there being any further requirement for us to invest in any banks of systemic importance, we would obviously look to ordinary shares in the future.

It is also important to recognise the value that the market disciplines provide in terms of how we are viewed internationally in the banking system in the absence of a total nationalisation of the entire banking system in Ireland, and how that would be seen internationally. We have already seen the nationalisation of Anglo Irish Bank and a substantial shareholding taken by the Government — by the public — in Bank of Ireland and soon in Allied Irish Banks as well.

That answer is a mixture of clutching at straws and denial. No matter how the Taoiseach spins this, the IMF has used the same methodology in looking at the banking situation across all of the countries in the developed world and it has come to the conclusion that the Irish bailout will be the most expensive. Clutching at straws by saying that this or that figure is out or was in an earlier draft is neither here nor there.

We have moved from a situation where on 30 September the Taoiseach told us that the guarantee would avoid having to nationalise a bank or having to put money into any bank through a succession of attempts to deal with the banking situation. A recapitalisation plan was announced before Christmas which did not happen. A very short time prior to the nationalisation of Anglo Irish Bank the Minister was stating that there would not be a nationalisation. Two banks have been recapitalised with €7 billion already and one of those banks now states that it needs an extra €1.5 billion. On top of that, the Taoiseach has stated that the bad debts of the banks must now be all assembled in what is called the national asset management agency. These are anything but national assets. This is "an bord bail out" with a body being set up to assemble all of these bad debts.

Meanwhile, opinion from a range of sources is saying to the Taoiseach that the game is up and the banks in this country will have to be nationalised. People have expressed differing opinions about the way in which the banks are to be nationalised — whether it should be a temporary nationalisation with them being resold at another stage or whether, for example, shares would be put into a trust and protected so that there could be some possibility of recovery down the line.

It seems we are staring at the prospect of the nationalisation of the banks and I am trying to establish whether the Government will nationalise them. Has the Government made a decision on this, or will it be one Government policy today and another in two or three weeks' time, as we have repeatedly found regarding the banks?

With respect, I reject Deputy Gilmore's contention. He spoke about the game being up; we are not playing any game. We are in the serious business of trying to maintain financial stability in the State, against a background in which far stronger economies than ours are having to contend with the same mammoth task.

Deputy Gilmore continues to use populist phrases such as "bail-outs".

What is it then?

That is the term the IMF used.

I want to answer the question. We are interested in protecting the maximum number of jobs in the economy. If I have to say so once, twice or three times to Deputy Gilmore, unless we have a functioning banking system it is not possible to do that.

That is correct.

The Labour Party's position was to reject the State guarantee, an action which would have brought about the implosion of the banking system.

That is not the case.

We were right.

The Labour Party is against capitalisation and every other action because it wants to keep playing the populist game.

No, that is not the case.

That is the Labour Party's game. It is getting much political kudos for it and hoping it will get it to the far side of June.

It is time the Taoiseach made up his mind.

The Government is involved in a more serious business. Like every other government, we will do whatever is necessary to maintain financial stability.

The Government is not like any other, it is worse than any other government.

We are not worse than any other government despite the Deputy's contention.

Yes it is. That is what the IMF said.

Deputy Gilmore has quoted from a draft report but did not see the final report. When he saw the draft, he got his finance spokesperson to put out her statement in the morning. He then decided to come in here to have an argument about something that is not even in the final report.

That was irresponsible.

The Deputy is encouraged by that kind of action.

All the Government does is close down debate so that no one can ask questions about the banks.

The Labour Party will close down the country and wreck it if it goes on like this.

We have not seen much from the Labour Party yet.

We will never catch up with the damage Fianna Fáil has done to the country.