Varadkar expresses support for banker pay cap

The €500,000 cap on bankers' pay should remain in place, according to Taoiseach Leo Varadkar.

Answering questions in the Dáil about the bank bailout and guarantee following the Comptroller & Auditor General's (C&AG) report, Mr Varadkar also said that "we have recovered all the money from Bank of Ireland. We will in time recover all the money from Allied Irish Banks."

He said it would "not be possible to recover the money that was put into Anglo Irish Bank and Irish Nationwide because those institutions were dead".

The C&AG said the bailout cost €64 billion, with a recurring annual interest cost of €1.1 billion to €1.3 billion and a net cost of €45 billion to the taxpayer.

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Mr Varadkar was responding to Labour leader Brendan Howlin who said the €64 billion cost of the bank bailout was almost equivalent to the €66 billion spent in total by all Government departments in a year.

He said there was pressure to remove the cap on bankers’ pay but people would find this “repulsive”. He also called for a “modest increase” in the current bank levy to recover an additional €250 million.

Mr Howlin stressed that an end to the levy in 2021 “cannot be tolerated”.

He said the banks should continue to pay through levies until the debt and interest are fully paid back to the people.

‘Right or wrong’

Mr Varadkar said: “I do not believe anyone will ever know for sure whether the decision to guarantee the banks on the fateful night in question was right or wrong”.

The bank bailout of AIB and Bank of Ireland made sense because the money would be recovered and they were "functioning, surviving, living banks", he said. But Anglo Irish Bank and Irish Nationwide "should not have been bailed out" because these banks were dead, he added.

“Unfortunately, the money involved in the shameful bailout of Anglo Irish Bank and Irish Nationwide will never be recovered”

But he said the guarantee was made to protect the deposits and savings of the Irish people. “Those banks were bust; they were empty.”

He said: “In countries where a different course of action was followed, such as Iceland and Cyprus, it was not just the bondholders who lost their money. Savers did also. That is what would have happened here.”