Ireland must be first in the queue for bank recapitalisation support from Europe – McGrath

 

The Government should build on the comments by the Governor of the Central Bank Patrick Honohan last evening and seek a more equitable distribution of the Irish banking debt, according to Fianna Fáil Finance Spokesperson Michael McGrath.

Deputy McGrath stated, “The comments from Governor Honohan that temporary or permanent European bail-out funds should be allowed to directly recapitalise banks are a welcome indication of some new thinking on dealing with banking debt.

“The current ECB policy that senior bondholders should not be required to contribute one cent towards banking losses and that the taxpayers be left on the end of the hook is deeply unfair and economically regressive.

“With the required political will and some imagination, it would be possible for the European bail-out fund to take direct stakes in the Irish banks and relieve the burden from Irish taxpayers.

“It would be fundamentally unfair if other European countries, such as Spain, dealing with emerging banking crises were facilitated in having their banks directly recapitalised by a European bail-out fund while the Irish State is left with entire burden of bailing out Irish banks.

“The Taoiseach should raise this issue at the extraordinary European Council meeting planned for May 23rd.  Having injected €64 billion or 40% of Irish GDP into our banks, Ireland should unquestionably be first in the queue for European assistance when it comes to recapitalising banks.”