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Credit downgrading undermines Government banking policy – Morgan

25 August, 2010


Speaking today after credit agency Standard and Poor’s downgraded Ireland's government credit ratings, Sinn Féin Spokesperson on Finance Arthur Morgan said that this further downgrade undermined the Government’s banking policy and called on the Government to wind down Anglo Irish bank.

Deputy Morgan also said that the effect of this downgrade would be crippling for the whole economy as the higher cost of borrowing will lead to a further obliteration of public services as more and more funds will be diverted to paying these increasing costs.

Deputy Morgan said:

“The cost of borrowing will increase once more for the Irish Government as a result of their perverse allegiance to an ailing banking system. Standard and Poor’s have lent their voices to the growing professional opinion that the ultimate costs of bank bailouts will surpass original estimations, doubling to as much as €50billion.

“Once more, the Government banking policy has been undermined. This Government are digging a huge hole in the public finances and the dual burdens of NAMA and Anglo Irish bank are crippling Ireland’s credit rating, making it impossible to borrow for stimulus and investment, which is needed to plug this black hole.

“The consequences of this downgrade for the wider Irish economy will be crippling- as the higher cost of borrowing will lead to a further obliteration of public services as more and more funds will be diverted to paying these increasing costs. Public services like health, education and social welfare will deteriorate as parasitic banks leech onto the public finances, eroding our competitiveness.

“The Government’s home grown crisis is once more curbing economic growth. Propping up zombie banks comes at a high cost to the ordinary people of this State as these costs are a direct obligation on our public finances.

“The Minister needs to wake up and realise that the Government are prolonging our crisis. It is time the Government reordered their priorities and placed less emphasis on redundant banks like Anglo Irish and more on domestic recovery through job creation. It is time for the Minister to wind down Anglo Irish bank, which is not only a drain on the public finances but is sabotaging our economic recovery.” ENDS

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