THE GOVERNMENT’S plan to take complete control of Anglo Irish Bank could prove “quite calamitous” for Irish public finances, Labour Party finance spokeswoman Joan Burton has claimed.
Ms Burton said she was amazed by the decision and disappointed that no indication of the likely cost of the move to the taxpayer had been mentioned by Minister for Finance Brian Lenihan.
“The Labour Party believes the Dáil should reassemble [today] to get a full briefing of the costs and implications this move will have and to establish the reasoning behind the decision,” she said.
Ms Burton said Taoiseach Brian Cowen and Mr Lenihan had “stumbled from one crisis to another” since the banking guarantee was introduced in September.
She said that if Ireland was to restore its reputation for financial probity the Government must release all the facts about Anglo’s affairs. “We need a mechanism like an inspector to establish what happened and we need to recall the Dáil so the fullest and most transparent debate can take place so we can restore full confidence in the probity of the financial system,” she said.
Green Party finance spokesman Senator Dan Boyle said he had spoken to the party’s Ministers, John Gormley and Eamon Ryan, who he said were both “satisfied” that taking control of Anglo Irish Bank was the “best course of action to follow”.
“It is necessary to maintain confidence in the banking system, protect the economy and, as a nationalised bank, it becomes a vehicle that can be used to bring about economic recovery,” Mr Boyle said.
“It is the best alternative that exists at this point . . . Nationalisation allied with a new board and management team mean the bank is better positioned to come out of the current situation.”
Fine Gael finance spokesman Richard Bruton said the Government had made the right move in abandoning their recapitalisation plan in yet another climbdown.
“The Government have finally been forced into recognising their mistaken approach to this bank,” he said.
Mr Bruton said it appeared the Government had taken note of plans outlined by Fine Gael on Wednesday in relation to trying to restore trust and confidence in Anglo Irish Bank.
“The handling of this issue confirms, once again, that the Government are all at sea on economic policy and are lurching from one U-turn to the next,” he said.
“First it was the multiple U-turns on the Budget, then the requirement for recapitalisation of Irish banks, then the idea of a pay freeze, and then finally their U-turn on Anglo Irish Bank’s entitlement to be included in the recapitalisation programme.”
He said the Government needed to clarify if the announcement had the effect of extending the State guarantee to any additional liabilities of the bank, including the owners of €2 billion in perpetual preference shares.
Meanwhile, the board of Anglo Irish Bank said it would work fully with the Government to ensure the long-term commercial viability of the bank following the decision to take it into public ownership.
