Further money from the taxpayer should not be used to shore up toxic banks because the country cannot afford it and is in danger of defaulting on its sovereign debt, Sinn Féin’s finance spokesman Pearse Doherty claimed today.
"We need to wake up here, we need to recognise that Ireland is in danger of defaulting on its sovereign debt and it's not just me saying that there are Nobel prize winning-economists saying that," Mr Doherty told RTÉ's Morning Ireland.
He said the massive private debt “lumped onto” the sovereign needs to be separated out and should the party enter government after the election it would tell the European Union that Ireland needs to reduce its deficit.
He said Sinn Féin would not put any more taxpayer’s money into banks until there was a new nationalised state bank from the merger of Allied Irish Bank and Bank of Ireland that got rid of the bad debts and was in a position to operate in the “way a bank should”.
Mr Doherty said claims by Minister for Finance Brian Lenihan that the State would run out of the money needed to pay social welfare and pensions if the country walked away from the EU-IMF deal were “absolute nonsense”.
“Brian Lenihan can come out with as much spin and waffle as he wants…he’s trying to scaremonger people that pensions won’t be there,” he said.
Speaking on the same programme, Mr Lenihan described Sinn Féin’s policy on the banks as “totally irresponsible” and “grounded on populism”.
He said if Mr Doherty had made his proposals at last night’s meeting of EU finance ministers he would have been “laughed out of the room”.
Speaking at the Fine Gael manifesto launch this morning, finance spokesman Michael Noonan said that unless the terms of the bailout are eased, Irish banks could move into a default position.
Last night, economics commissioner Olli Rehn warned that Ireland’s international sponsors expect “continuity” on the State’s rescue plan after the election as he backed eventual lower interest charges on bailout loans. Mr Rehn said flexibility was not in prospect immediately but he held out the prospect a review in future years.
