Dáil approves bailout deal

 

The Government won a crucial Dáil vote on the €85 billion EU-IMF bailout package today.

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.

Minister for Finance Brian Lenihan said it mystified him that anybody in the Dáil could oppose the measure.

“The suggestion that the Opposition could negotiate a better interest rate from the IMF is, frankly, laughable,” he added. “The rate of interest charged by the IMF is calculated using the standard formula which it applies to all countries.”

Mr Lenihan said this was a standard calculation, and it was completely misleading to suggest that it could be renegotiated.

Fine Gael leader Enda Kenny said the Government’s commitment to continue, and, indeed, intensify its failed policies, was why the four-plan in its current form was not workable.

“In addition, it is why the plan has been greeted with deep scepticism by the financial markets,’’ he added. “That is why we cannot support the current agreement.”

Party finance spokesman Michael Noonan said the deal was an obscenity for taxpayers. “The direct cause of the banking crisis is the Government’s banking policy, which has led directly to the IMF/EU bailout which we are now discussing,” he said.

“The Government’s negotiations have led to a very bad deal. The deal needs to be re-negotiated and Fine Gael will look for a mandate to do so,” Mr Noonan said.

Labour leader Eamon Gilmore said his party was opposing the measure because what was on offer was a bad deal for Ireland. “In the coming election, we will seek a mandate to renegotiate the programme,” he added.

“It is not good enough, frankly, for the European Commission to treat Ireland as a contagion risk, that has to be contained, no matter what the cost to the people of Ireland. It was Fianna Fáil, the bankers and the property developers who caused this, not the people. “

Sinn Féin also opposed the bailout.

The Dáil this evening also passed the Credit Institutions Bill detailing new laws to oversee the multibillion-euro bailout and reduce the size of troubled finance houses. Some €35 billion of the EU-IMF loan facility is earmarked to shore up the banks.

The Government had a comfortable majority of 78 to 71 votes to pass the controversial legislation giving the Minister for Finance sweeping powers to restructure the banking sector.

The new rules will impose so-called burden-sharing on global money markets, with some subordinated lenders forced to take a hit on loans made to Irish banks.

The legislation, published yesterday, said a special manager will be appointed to a bank “in limited and exceptional circumstances in order to achieve the objectives of the legislation”.

The Bill will also underpin the Minister for Finance's pledge that State support will only be given to Allied Irish Banks if the controversial €40 million bankers’ bonuses are scrapped. Labour yesterday suggested the payouts could end up being given to 90 AIB staff who have taken court action over the bonuses, claiming the Government may not be legally able to intervene.

The laws will also give legal effect to the effective wind-down of Anglo Irish Bank, expected to be early next year, and Irish Nationwide Building Society.

The Department of Finance hopes the Bill will be enacted by the Oireachtas by the end of the week.

Mr Lenihan said once the legislation is passed, AIB will be given a cash injection by the end of the year.