INDEPENDENT Shane Ross claimed the Government was “wearing the clothes of the last government of Brian Cowen” in its economic policy.

He asked why senior bondholders had to be treated in the same way as depositors.

“They are completely different creatures,” he said. “Senior bondholders go out there and take a risk and make an investment.”

Mr Ross claimed that Taoiseach Enda Kenny’s greatest cheerleaders in his policy were in Fianna Fáil.

“The support is coming from the last government,” he added. “And very few people can see the difference, if there is any, between this Government and the last government in its attitude to the banks.”

Mr Ross accused the Government of completely and utterly surrendering to the IMF and the EU. “They know that, we know that . . . everybody knows that,” he said. “Default, apparently, is the word which cannot be mentioned in this chamber.”

Denying that the Government’s policies were the same as the previous coalition’s, Taoiseach Enda Kenny said a decision had been made to reduce the number of dysfunctional banks and create two pillar banks.

Mr Kenny added that was a decision which brought “clarity and certainty” to the Irish banking sector. “It is not the end result of where we want to be,” he added.

“The end result of where I want to be is to have a situation where our country can say goodbye to the IMF, in terms of a deal, and get back to the bond markets ourselves and be in control of our economic destiny.” Mr Kenny said a space was now provided for Ireland to rebuild the nature of its relationship with many of its European counterparts.

Mr Ross said that setting up two major banks had its own serious dangers.

“You, yourself, would remember, as would everybody in this House, what happened when AIB and Bank of Ireland, in the past, dominated the market,” he added.

“It is one of the reasons why the banks have become the tyrants of the financial system here.”

Mr Kenny said the Government would move on to governance of the Irish banking sector. “Obviously, there are changes needed there,” he added.

Mr Kenny added that many international commentators were now looking with some degree of confidence at the decisions made by the Government in bringing certainty and clarity to the banking situation.

“I think that is important, and it is very different from where we were . . . proceeding on a path of confusion,” he added.

Sinn Féin leader Gerry Adams accused the Taoiseach of going from a “five-point plan to a five-point U-turn” on the EU-IMF deal.

But Mr Kenny insisted that the Government’s decision last week “brought about certainty and clarity as far as the Irish banking sector is concerned. It’s about time that somebody made a decision in respect of the Irish banking sector.”

Mr Adams also pointed out that the Government had given a further €3 billion to Anglo Irish Bank and Irish Nationwide.

Mr Kenny said the payments were based on a promissory note by the previous government “and when we opened the press this was part of what we found”.