Responding to the announcement about an EU wide banking union today, Sinn Féin Finance Spokesperson Pearse Doherty TD said the Irish people deserved to hear from their government what they were doing to separate banking debt already incurred in this state, from sovereign debt.
He said the party had concerns about the details of the banking union, but the important issue of retrospective recapitalisation of Irish banks was still not being dealt with.
Deputy Doherty said:
“Twice this week the government has glossed over the retrospective recapitalisation of Irish banks that it promised was on the table after the ‘game-changing’ June 2012 summit - once in their medium term economic strategy and now with talk about the EU wide banking union. Where is the ESM in all this?
“While a common resolution regime for future bank failings is important, we as a State cannot move on until our legacy bank debt, caused by our government bailing out our failing banks with taxpayers’ money, is addressed.
“I am concerned about the details of this banking union and will study them further in the coming period. It does appear to have altered from the original plan. The single deposit scheme appears to have been dropped and the complexity of the issue means shutting down failing banks will be nowhere near straightforward.
“I am concerned that the cost of bailing out a failing bank is still to be initially born by the sovereign while a common fund, which Ireland will contribute to, is to be established over the next ten years. Reports say this fund will amount to €55 billion. Bearing in mind the government put €65 billion into the Irish banks.
“We have always cautioned that the banking union could just be another step towards a federalised Europe and European politicians have implied this in various speeches. What we do not want is a banking union that gives Europe all of the rights, but none of the responsibilities.
“We do want to see a common resolution regime which sees failed banks closed without incurring a cost for the taxpayer and we want harmonization of regulation. However, the most important issue for us right now is the address of Ireland’s bank bailout, which this government continues to ignore.”