The Government had a comfortable majority of 78 to 71 votes tonight to pass the controversial legislation giving the Minister for Finance sweeping powers to restructure the banking sector.
Earlier, Brian Lenihan described the Credit Institutions (Stabilisation) Bill as “proportionate”, while the Opposition and a Government backbencher described as akin to something that North Korea might introduce.
Mr Lenihan described the legislation as necessary and said no TD should "doubt the importance of ensuring that the Minister for Finance is appropriately equipped with the range of legal powers necessary to continue to maintain financial stability in the State. That is the sole purpose of the legislation before us today”.
The Bill gives the Minister sweeping and far-reaching powers to reorganise the banking sector, including forcing losses on subordinated bondholders and stopping future bonus payments to staff. The legislation also allow the Government to put more money into AIB by year end and allow it begin winding down Anglo-Irish Bank.
The Opposition, however, claimed sections of the Bill are unconstitutional and objected to rushing it through after just four hours of debate.
Labour finance spokeswoman Joan Burton claimed the Bill “could probably teach the North Koreans a lesson in ministerial powers, because outside of totalitarian regimes, I do not believe there has been a proposal to give powers like this to a Minister for Finance”.
Former Fianna Fáil minister of State Ned O’Keeffe agreed the Bill was “based on something you’d hear in North Korea” and he sharply criticised Mr Lenihan, claiming Government policy was why “Fianna Fáil has gone down to 17 or 18 per cent in the polls”.
However, he voted with the Government on the second stage of the Credit Institutions (Stabilisation) Bill.
Mr Lenihan said that “extraordinary and exceptional challenges still face our banking system and the economy, and there is a strong public interest in the introduction of the extensive Ministerial powers included in this Bill”.
He said: “This Bill represents an intensification of the measures already adopted by the Government such as Nama and bank recapitalisation to ensure that there is a viable and long-term banking system in the State to meet the needs of the real economy and underpin our economic recovery”.
Fine Gael leader Enda Kenny had said it was “absolutely extraordinary that the Government would actually have the audacity” to expect a Bill with 77 sections to be passed in four hours. “This Bill will allocate to the Minister for Finance the most powerful positions in finance ever given to any Minister in any government in the history of the State.” He had called for the Dáil to sit on Tuesday to debate the Bill in detail.
Fine Gael finance spokesman Michael Noonan said the Bill allowed the Minister “to do anything he likes”. He also said “ am concerned about the role of the Governor of the Central Bank under this legislation. I would have expected resolution legislation to have conferred the special powers on the Governor of the Central Bank, rather than on the Minister.”
Labour’s Tommy Broughan and Sinn Féin finance spokesman Pearse Doherty clashed when Mr Broughan said Sinn Féin voted for the bank guarantee. Mr Doherty said Labour in Government “will use taxpayers' money to bail out the gamblers in Anglo Irish Bank”.
Finian McGrath (Ind, Dublin-North Central) said Ireland's banking system had been compared to Cuba. “One big difference, however, is that the Cubans nationalised the banks when there was money in them, but we take major shareholdings when the banks are broke.”
Earlier today, the Government won a crucial Dáil vote on the €85 billion EU-IMF bailout package.The Government had a comfortable majority of 81 votes to 75 in two divisions challenged by the Opposition.
Independents Jackie Healy-Rae, Michael Lowry and Joe Behan voted with the Government, while Fianna Fáil backbencher Mattie McGrath, who is without the parliamentary party whip, voted with the Opposition.