The Labour Party has called for the temporary nationalisation of banks covered by the State guarantee scheme as part of a new 10-point plan aimed at improving employment creation and job retention.
Under the Labour Party proposal, which will be put forward in a motion in its private members’ time in the Dail in the coming week, the banks concerned would be taken into public ownership for a period, cleaned –up and later returned to the market.
Labour Party leader Eamon Gilmore said this afternoon that the party would also be proposing the establishment of a banking commission made up of persons from Ireland and abroad “of the highest reputation” to oversee the appointment of the boards and senior management of the banks and to approve their business plans.
The Labour Party proposal would also see the replacement of the present boards and senior executives of the financial institutions which would come under the supervision of the banking commission “as a means of beginning to restore Ireland’s reputation abroad.
Mr Gilmore said that existing shareholders would “have the option of putting the shares into trust for a period of time so that they could recover the value or part of the value of their shares when the banks would be returned to the market”.
He said that the Labour Party’s temporary nationalisation plan would apply to the six financial institution covered by the State guarantee scheme: AIB, Bank of Ireland, Anglo Irish Bank, Irish Life Permanent, Irish Nationwide and EBS building society. Anglo Irish Bank is already in public ownership.
Speaking at the launch of the proposals outside the headquarters of Anglo Irish Bank at St Stephen’s Green in Dublin, the Labour Party leader said that dealing with the banking crisis was central to its intention to prioritise the protection of jobs and the creation of new employment.
“The lack of availability of credit is putting viable businesses under terrible pressure. Unless a business can access credit to pay their bills and meet their payroll, more and more jobs will be needlessly lost”, he said.
Mr Gilmore described the Government’s plans for the banking sector as “a disaster”.
He said that the State guarantee scheme had exposed the taxpayer to all the risks of the banking system.
“It has not worked. The Government has now had to put €8.5 billion to recapitalise the main banks. Anglo Irish has had to be nationalised. Now the taxpayer is going to have to put up another €24 to €30 billion to buy up the toxic assets of the banks. That is going to put not only this generation but also our children and grandchildren into hock to rescue the banks for the bad lending and bad practices they went on with”
“A more sensible solution is to bring the banks into public ownership, to clean them up, to establish a banking commission, to bring in the best of international expertise to be appointed as bank directors and top managers of our banks, to get the Irish banks back into healthy state again to get them lending to business so that jobs can be created.”
“And when the economy recovers and the banks are in a healthy state to return them to the market and hopefully at considerable gain to the taxpayer who has borne the risk in the meantime”, he said.
Mr Gilmore said that there was a difference of political and economic opinion about the way to go forward.
He said that FF was going one way – “leaving the banks in private ownership and by using taxpayers money to guarantee the banks and to buy up the toxic assets to create what is in effect a HSE for sick banks and sick loans” .
He said that the Labour Party was looking another way and was proposing a temporary nationalisation of the banks.
In its ten-point plan for job protection and creation the Labour Party has also proposed the establishment of a national investment bank, the re-establishment of eircom as a public interest company and the provision of tax breaks to employers to take people off the dole.
It has also urged the training initiatives for people who have lost their jobs and the introduction of a guarantee that no homes will be repossessed for two years.