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Extension of Bank Guarantee will penalise taxpayers – Morgan

29 June, 2010


Responding to the news that the European Commission has today extended the State’s guarantee over the liabilities of Irish banks until the end of December, Sinn Féin Spokesperson on Finance Arthur Morgan has hit out at the measure that will further expose Irish people to debts that they did not create themselves. He said that the State would be keeping bad banks on life support, while taxpayers themselves are penalised heavily.

Deputy Morgan said:

“The decision by the European Commission today to extend the State’s guarantee over the liabilities of Irish banks until the end of December will further expose Irish people to debts that they did not create themselves, further making them liable for the toxic debts of our financial institutions.

“Both the Government and the European Commission have a brass neck to extend the blanket guarantee further given that they are on a trajectory to inflict a further litany of harsh budgetary measures on the people of this State.

“A report released yesterday from the Bank of International Settlements warned that if measures like extensive bank guarantees were kept in place, never mind extended, there was an inherent risk of creating zombie banks dependant on direct support. Essentially the State would be keeping bad banks on life support, while taxpayers themselves are penalised heavily through pay cuts, welfare cuts and infrastructural
deficits.

“The Government and the European Commission are going down a dangerous road without a map – continuing to extend the bank guarantee without taking the tough decisions and making fundamental reforms will cripple the economy.

“Sinn Féin believes the only way to deal with the current crisis is to nationalise the two main banks, AIB and Bank of Ireland, turning these two banks into a state bank. Sinn Féin has always advocated for creating a state bank that will offer far greater security for the taxpayer, that will give credit to and invest in small and medium enterprises, that protects family homes and that will restore confidence in the Irish economy. With a state bank, the Government can adequately protect the investments and deposits of ordinary citizens and small businesses whilst wisely investing profits back into the public purse to the advantage of all.

“Our current Government needs to leave behind their obsession with the banking sector and worry less about extending the blanket bank guarantee and instead focus on ensuring each and every unemployed person in this State can secure a job.” ENDS

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