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Morgan - Government lurching from crisis to crisis

15 December, 2008


Sinn Féin Economy spokesperson Arthur Morgan TD commenting on the government's announcement on the recapitalising of the banks said "Any money invested by the state in the banks must be given in return for semi or full nationalisation and there needs to be guarantees about renewed credit for business, measures to protect people at risk of losing their homes and strict regulation of the banking sector"

Deputy Morgan said:

"There is a lack of confidence among ordinary people that this government is capable of leading the country through this crisis and there is a concern that they are lurching from crisis to crisis. It is critical that the government gets to grip with the economic downturn and does not allow the banks to set the agenda as they have been doing to date. Last night's vague statement was another example of the Government's lack of strength in dealing with the financial crisis.

"It has been obvious for some time now that the Irish government would have to intervene to recapitalise the banking sector. The best options available at this time are the banks raising additional capital themselves and investment by the state. Any money invested by the state in the banks must be given in return for preference shares, ie, semi or full nationalisation. And in the longer term the government should keep one of the banks in state ownership to protect the national interest.

"Sinn Féin is totally opposed to offshore private equity involvement in the scheme. Allowing 'corporate raiders' to take any role in recapitalisation will have dire consequences as their short term profit driven agenda will take precedence over the needs of our economy .

"Any recapitalising scheme must also deal with renewed credit for business, protecting people at risk of losing their homes, accountability and full regulation of the banking sector.

· Renewed credit for business - The Government must ensure renewed bank funding for businesses, such as seed capital for new projects, more flexible overdrafts for businesses that are viable as a going concern, investment in and loans to businesses that are planning expansion. SMEs form the backbone of the Irish economy. They are one of our best hopes of economic recovery.

· No home repossessions - There should be no foreclosures on properties of people who get into financial difficulties as a result of the economic downturn for the duration of the Guarantee Scheme with the banks which is two years

· Accountability - It is imprudent lending by the boards of existing banking sector which led to this impasse. There must be accountability, whether through demotion, wage cuts or sackings. A change in banking culture can only be achieved through wholesale personnel change on the banks boards.

· Government role in banks - We need to know who will be representing government on the boards of these banks and how will they be accountable to the Oireachtas. The banking sector needs strict oversight and regulation. The banks cannot be trusted to regulate themselves.

· The bad corporate debts that are dragging banks bottom line down should be named and shamed.

"The government is still lurching from crisis to crisis. They are failing to provide proper leadership on the economy or anything else. And last night's announcement is another example of this. Once again they have not put in the open the terms and conditions being demanded of the banks, they have not set out their views in terms of taking a majority shareholding or set out any proposals to protect people at risk of losing their homes." ENDS

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