THE Irish banking system would have “totally collapsed” without the Government’s €400 billion crisis guarantee plan, the Tánaiste warned yesterday.
Mary Coughlan made the claim as opposition parties attacked the rescue bid’s “vagueness”.
The enterprise, trade and employment minister insisted failure to act would have tipped Ireland into economic meltdown.
“We would have found ourselves in a different set of circumstances if we had not brought in this legislation. We would have undermined the system of banking and it would have totally collapsed,” she told the Dáil.
Ms Coughlan was responding to demands from Labour leader Eamon Gilmore to explain exactly how much taxpayers were expected to put at risk to cover the rescue plan, and what banks would be charged if they take up the Government’s offer to cover their liabilities.
“This country is being asked to go guarantor for the banks and in effect we are being asked to put up the deeds of the country as security in doing so. “How much are we being asked to guarantee? Figures floating around have ranged from €300 billion to €500bn,” Mr Gilmore said.
The Labour leader ridiculed the Government’s apparent inability to give firm financial answers.
“What are we being asked to guarantee? No member of the House or member of the public would walk into a bank and sign a guarantee for anybody, even a close member of the family, without knowing how much he or she is going to guarantee and would certainly not sign it in circumstances where it was open-ended, with no limit to the guarantee.
“We need to know exactly what we are signing up to. It is a blank cheque for the banks,” he added.
Mr Gilmore attacked the Tánaiste for not stating in the legislation how much banks would be charged for getting the state to stand over their business activities.
“The charge applies only if the guarantee is called in. It is like having an insurance policy where one has to pay the premium only on the day one makes a claim. What is this charge and how will it apply?” he asked.
Ms Coughlan, who was standing in for the Taoiseach at Leaders’ Questions while Brian Cowen visited Paris, said there was little risk for the taxpayer, as the assets of the banks involved in the crisis plan were €80bn more than their liabilities.
“Regarding a fee, that is a matter for discussion with the Central Bank, which will determine what the fee will be,” she continued.
“...We are facilitating a guarantee that we hope will never have to be called in,” she said.
Fine Gael leader Enda Kenny expressed concern the Government had not properly thought through the impact of the rescue bid on banks operating in Ireland, but who were not covered by the deal.
Report by Shaun Connolly, Political Correspondent - Irish Examiner.
...So the country is going guarantor for the Irish banks and Central Bank will ultimately decide how much it will charge Ireland???
We are witnessing the demise of Ireland as we know it - the country has effectively been signed away - and without most Irish people even realising it!
...I wonder why the concept of "new world order" for Ireland comes to mind???
Mary Coughlan made the claim as opposition parties attacked the rescue bid’s “vagueness”.
The enterprise, trade and employment minister insisted failure to act would have tipped Ireland into economic meltdown.
“We would have found ourselves in a different set of circumstances if we had not brought in this legislation. We would have undermined the system of banking and it would have totally collapsed,” she told the Dáil.
Ms Coughlan was responding to demands from Labour leader Eamon Gilmore to explain exactly how much taxpayers were expected to put at risk to cover the rescue plan, and what banks would be charged if they take up the Government’s offer to cover their liabilities.
“This country is being asked to go guarantor for the banks and in effect we are being asked to put up the deeds of the country as security in doing so. “How much are we being asked to guarantee? Figures floating around have ranged from €300 billion to €500bn,” Mr Gilmore said.
The Labour leader ridiculed the Government’s apparent inability to give firm financial answers.
“What are we being asked to guarantee? No member of the House or member of the public would walk into a bank and sign a guarantee for anybody, even a close member of the family, without knowing how much he or she is going to guarantee and would certainly not sign it in circumstances where it was open-ended, with no limit to the guarantee.
“We need to know exactly what we are signing up to. It is a blank cheque for the banks,” he added.
Mr Gilmore attacked the Tánaiste for not stating in the legislation how much banks would be charged for getting the state to stand over their business activities.
“The charge applies only if the guarantee is called in. It is like having an insurance policy where one has to pay the premium only on the day one makes a claim. What is this charge and how will it apply?” he asked.
Ms Coughlan, who was standing in for the Taoiseach at Leaders’ Questions while Brian Cowen visited Paris, said there was little risk for the taxpayer, as the assets of the banks involved in the crisis plan were €80bn more than their liabilities.
“Regarding a fee, that is a matter for discussion with the Central Bank, which will determine what the fee will be,” she continued.
“...We are facilitating a guarantee that we hope will never have to be called in,” she said.
Fine Gael leader Enda Kenny expressed concern the Government had not properly thought through the impact of the rescue bid on banks operating in Ireland, but who were not covered by the deal.
Report by Shaun Connolly, Political Correspondent - Irish Examiner.
...So the country is going guarantor for the Irish banks and Central Bank will ultimately decide how much it will charge Ireland???
We are witnessing the demise of Ireland as we know it - the country has effectively been signed away - and without most Irish people even realising it!
...I wonder why the concept of "new world order" for Ireland comes to mind???