Cowen rejects amendments to bank bailout plan

TAOISEACH BRIAN Cowen has ruled out the Government accepting Dáil amendments to the bank guarantee scheme because it would put the agreement reached with the European Commission at risk.

Labour leader Éamon Gilmore questioned why the scheme, which will be discussed in the Dáil on Friday, could not be amended and stressed that "the EU Commission has no legislative role in making laws for this country".

Insisting that it is a matter for this legislative assembly, Mr Gilmore said he did not understand "the constitutional basis for the Taoiseach's comment that as the Government has, in effect, concluded an agreement with the EU Commission on the guarantee scheme, it is not open to this sovereign parliament to amend the scheme".

Of the agreement with the commission, Mr Cowen insisted however that "we do not wish to put this at risk. Even with the most honourable of intentions, people putting and taking amendments can then go back and find there is another problem."

The scheme guarantees all deposits and certain debts of six Irish financial institutions and five foreign banks with substantial retail involvement in the State.

Mr Cowen said it had received clearance from EU competition commissioner Neelie Kroes.

"On that basis, this is the scheme that has passed muster with the European Union in terms of meeting those requirements and, therefore, I could not envisage a situation where we would take amendments to the scheme and put at risk the compliance we have achieved as a result of the detailed technical and other discussions that took place," he added.

"We will put this by way of positive motion and I understand the Minister for Finance will be available in a question-and-answer session to clarify any aspect beyond the debate itself that deputies would have in regard to the scheme."

Fine Gael leader Enda Kenny accepted that "the legislation has been passed by the Dáil and the Seanad and signed by the President, it is now the law. That Act of Parliament authorises the Government to introduce a scheme."

Sinn Féin leader in the Dáil Caoimhghín Ó Caoláin said if it was the case that would see a "straight proposition that is either 'aye' or 'nay'?"

"Do we have the opportunity to make arguments or will they be disallowed because of the financial implications?"

Mr Kenny asked if consideration had been given under the scheme to "the significant talk around the place" that the Government might have to capitalise elements of the Irish banking system by borrowing.

Ceann Comhairle John O'Donoghue said that issue would have to be dealt with on Friday. Mr Gilmore asked when the scheme would be circulated to the Opposition parties.

"It is two weeks since the legislation was introduced and we would like to know that," he added. "This is not something we can simply walk into on Friday without having had ample opportunity to consider it."

Mr Cowen said he would arrange for the scheme to be circulated to the spokespersons today so they would have plenty of detail before Friday. The basic scheme, said Mr Cowen, had not changed in any significant way from that provided to the EU.

"After much detailed work. . . we have a State guarantee scheme for the financial institutions that come under the schedule in a way that complies with EU competition law.

"We need to get it passed and to ensure it is in compliance with the law and we need to get on with the work. Obviously, discussing it in the House provides an opportunity for people to make their views known and ask whatever questions they wish . . . not in its being changed, amended and referred back. We do not, with respect, have that luxury."