State did not bail out banks during economic collapse, Taoiseach says

Micheál Martin says bank shareholders not bailed out but ‘State took equity’

Taoiseacch Micheál Martin said “shareholders in the banks were not bailed out. The State took equity. The shareholders were not bailed out.” Photograph: Francisco Seco / POOL / AFP

Taoiseacch Micheál Martin said “shareholders in the banks were not bailed out. The State took equity. The shareholders were not bailed out.” Photograph: Francisco Seco / POOL / AFP

 

Taoiseach Micheál Martin has insisted in the Dáil “the banks were not bailed out” during the economic collapse over a decade ago.

The banks received €64 billion in borrowed funds in 2008 which is still being paid back but the Taoiseach said while it was not a popular thing to say “but it is a fact” that the banks were not bailed out.

Mr Martin said in response to People Before Profit TD Richard Boyd Barrett: “I’ll talk to you about the banks. The banks were not bailed out. Shareholders in the banks were not bailed out. The State took equity. The shareholders were not bailed out. That’s not a popular thing to say, but it is a fact”

But the Dun Laoghaire TD insisted “they were”.

The Taoiseach made the comments in a Dáil row with Mr Boyd Barrett about the treatment of Debenhams workers following the liquidation of the Irish arm of the department store.

Mr Boyd Barrett contrasted the response to the Debenhams employees who have been protesting outside stores across the State for more than 250 days, with the treatment of the banks during the recession.

The 1,200 workers who lost their jobs have been seeking the implementation of a redundancy package of four weeks pay per year of service that had been agreed with the company a number of years ago, but only two weeks’ statutory redundancy is currently available.

The Government is to set up a €3 million fund to assist Debenhams workers and the money will go towards training and upskilling, and will also support a business start-up initiative.

Mr Boyd Barrett who has consistently raised the Debenhams case in the Dáil since the spring liquidation, described the offer as an “insult” to the workers and said the Government’s “failure to ensure justice for these workers is appalling”.

Pointing out that Debenhams owed the Revenue Commissioners and Department of Social Protection €18 million, he said the Taoiseach had said he could not put money on the table because it would create a precedent.

The Dun Laoghaire TD added that he “did not mind setting a precedent when it came to bailing out banks to the tune of €64 billion”.

“There was no moral hazard there or no worry about the implications, but when it comes to workers who have worked for decades” and who had done nothing wrong “we cannot underwrite them”.

He said the Government should give the workers what they deserve and “then it should pursue Debenhams.

“The Government is just standing idly by while the workers, who are the most decent people you could imagine, and who have worked for this company, which has betrayed them cruelly, and it is saying there is nothing it can do.”

But accusing Mr Boyd Barrett of “acting the populist” he told him “you never want to hear the facts because you live in a fantasy economic wonderland.

The Taoiseach said: “I am sickened by the way Deputy Boyd Barrett leads people up the hill all the time, pretending there are easy simple solutions”.

Mr Martin added that “I said that we would do everything we possibly could within the law”.