THE COALITION’S decision to extend the bank guarantee for another 12 months has been described as the “greatest and most expensive political U-turn in the history of the Dáil”.
Fine Gael and Labour comfortably won the vote to extend the guarantee, with support from Fianna Fáil.
Dublin North East TD Tommy Broughan was expelled from the parliamentary Labour Party after voting against the Government. He voted against his party colleagues and Fine Gael in a procedural motion as the Opposition demanded more time to debate the guarantee. Later he voted against the guarantee itself, which was extended after 99 votes to 30.
Mr Broughan joins two other former Government TDs, former Labour minister of state Willie Penrose and former Fine Gael TD Denis Naughten on the Independent benches.
During a contentious debate on the Eligible Liabilities Guarantee scheme, Minister for Finance Michael Noonan said about €100 billion in liabilities was covered, a reduction from €147 billion last year.
The scheme covers AIB, Bank of Ireland, the former Anglo Irish Bank and Irish Nationwide, Irish Life Permanent and EBS. It was due to expire at the end of December and was subject to European Commission approval every six months.
Mr Noonan said the need for the extension was beyond question, and both the Central Bank and the National Treasury Management Agency had advised the Government to continue it.
During the debate, Sinn Féin’s Pearse Doherty described the move as the “greatest and most expensive U-turn in Dáil history”. He said “we are being asked to write a blank cheque for the banks, including Anglo Irish Bank. Given the volatility in the euro zone it is likely that the scale of this liability will increase in the coming 12 months.”
Cork North Central Fianna Fáil TD Billy Kelleher said it was “one of the most breathtaking U-turns I’ve ever seen” in the Dáil and it showed the “absolute hypocrisy” of Fine Gael and Labour who had vehemently criticised the bank guarantee when in opposition.
Fianna Fáil finance spokesman Michael McGrath, whose party backed the extension, said the consequences of ending the guarantee would be extremely serious, and the State did not have a choice.
Richard Boyd Barrett (PBP, Dún Laoghaire) said Ireland was the first country “to initiate a blanket guarantee of private, profit-crazed institutions whose reckless behaviour plunged this economy towards an abyss”.
Shane Ross (Ind, Dublin South) said when the guarantee was introduced it was “an opportunity for the last government and this Government to take the banks by the scruff of the neck, control them and reform them. The last administration did not do so and nor is its successor.”
But Mr Noonan said Sinn Féin had spent 30 years “rewriting history” when Mr Doherty said his party voted against the guarantee.
The Minister said Mr Doherty was the Bart Simpson of the Dáil that ‘‘no one saw, it wasn’t me, it was the other fellow”. Sinn Féin, like Fine Gael, Fianna Fáil and Independents voted on the basis of the information received at the time of the initial 2009 guarantee, that the crisis was a liquidity rather than a solvency issue, he said.
Mr Noonan said Mr Boyd Barrett “dances around the edge of the great European crisis like a kid at a bonfire, cheering for more flames and looking for more burning but he does not really contribute to any solutions in the debate”.
The Minister reminded Mr Ross that in 2004 he had written in praise of Anglo’s business model.
