Taoiseach's move to extend bank guarantee not credible, says Gilmore

LABOUR LEADER Eamon Gilmore has sharply criticised Taoiseach Brian Cowen for calling on the Dáil to extend the bank guarantee before the final cost of bailing out Anglo Irish Bank is disclosed.

He said it was “not credible” that the “Government has asked for another extension on the guarantee without knowing the cost of the last one”.

Mr Cowen said the final cost of the bailout had not been made available by the Central Bank. He said work was being finalised on it “and as soon as it is communicated to us it will be provided”.

But the Labour leader said it was “quite extraordinary” that the Taoiseach told the Dáil he did not know the figure that would be announced the next day and he asked “is that the way financial affairs of the country are being run”?

Mr Cowen insisted however that “it’s not a question of a nod and wink to the Taoiseach of the day”. Mr Cowen said the Financial Regulator “acts independently of me, as does the Central Bank”.

He speculated that if the figure for the cost of Anglo Irish Bank was €30 billion, at an average interest rate for this year and last of 5 per cent, “it would mean a payment of €1.5 billion every year in interest that would arise” and the €30 billion “would be added to the national debt”.

During Leaders’ Questions before a debate on extending the bank guarantee for another three months, Mr Gilmore said the Taoiseach “told us on the day of that guarantee exactly two years ago that it wasn’t going to cost us anything”. Within three months €1.5 billion had to be found for Anglo Irish Bank, while in January last year the Minister for Finance announced the nationalisation of Anglo.

“On May 29th he announced a further €2,500 million for Anglo Irish Bank. On March 13th, 2010, another €8,300 million for Anglo. There was another €10,000 million after that. By August 10th the total figure had reached €24 billion.”

The Labour leader said: “We are to be told that figure tomorrow, the day after this House is asked to extend the guarantee. We’re being asked to write another blank cheque this evening and tomorrow we’ll find out what the details of the last blank cheque are.”

Mr Gilmore who described the bank guarantee as the “worst decision ever made” said they were at another “five to midnight situation” asking for an extension “when one of the most critical pieces of information that the taxpayer has to know” was unknown.

Mr Cowen said: “It’s for the purposes of bringing certainty, that we said we would have a figure by the end of this month.” It was “not a question of a nod and wink to the Taoiseach of the day”.

He added: “We are seeking to do this to provide greater certainty for ourselves and for markets who may factor that in their equation in supporting us on sovereign debt markets.” He said: “Labour alone in this House voted against that guarantee and have since sought to rewrite history to suggest that they merely objected to the extent of the guarantee. The truth is they opposed the guarantee in principle tooth and nail.”