Lenihan offer on banking capital

 

Minister for Finance Brian Lenihan has said if Fine Gael and Labour write to him asking him to inject up to €10 billion into Irish banks immediately, he will accede to their request.

Mr Lenihan today rejected Fine Gael’s finance spokesman Michael Noonan’s contention that he had pulled a stroke by postponing the injection of capital until after the election. The delay will mean that a key deadline spelled out by the EU-IMF memorandum of understanding will be missed.

Speaking at a Fianna Fáil news conference on fiscal policy today, Mr Lenihan clarified the position of the EU, the IMF and the European Central Bank on the postponement.

Yesterday, he said the decision had been taken with the approval of those bodies. However, when Fine Gael raised doubts over this yesterday, Mr Lenihan said it had been done with the “understanding” of the bodies.

“I had the complete understanding of the EU and IMF,” he said. “[But] the decision was made by an Irish Government.”

Mr Lenihan defended the decision on the basis that the Government had deferred the decision because it no longer had a mandate.

He said that while Fianna Fáil agreed it was necessary, it believed it did not have a mandate to make the decision during an election campaign where other major parties disputed further recapitalisation.

“If Fine Gael and Labour write to me that they believe it’s in the national interest we will of course accede to that,” he said.
His colleague the Cork South Central TD Michael McGrath said that both Fine Gael and Labour would have been far more critical if the Government had proceeded with the injection.

“The accusation of political stroke would be done in a much stronger way if the Government had gone ahead with the recapitalisation,” said Mr McGrath.

During the conference Mr Lenihan claimed that in broad terms the Fine Gael plan was quite similar to the Government’s four-year plan. “It’s axiomatic that the bulk of tax proposals in the Fine Gael plan are derivable from Fianna Fáil’s four-year plan,” he said.