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Extension of bank guarantee an admission of failure – Morgan

10 November, 2010

Speaking today after the EU agreed to extend the banking guarantee until next June, Sinn Féin Spokesperson on Finance Arthur Morgan described the Government’s decision as an admission of failure that is reflected in astronomical bond yields.

Deputy Morgan said the bank guarantee should be allowed to lapse and both Bank of Ireland and Allied Irish Bank should be nationalised.

Deputy Morgan said:

“Today’s announcement by the Government to extend the bank guarantee is an admission of failure by the Government; a failure that is reflected in the astronomical bond yields.

“The Government attempts to keep these banks on artificial life-support is recognition by them that without the scheme Irish banks are unlikely to survive on their own. This is inexcusable. These banks are a drain on the Irish economy and are not performing any productive function.

“The taxpayer is once again being asked to provide yet another lifeboat for the banks. The critical issue here is that the banking system, even with the aid of this guarantee has continued to flounder, and it is failing to service the domestic economy.

“The Government needs to cut the umbilical cord to the banking system that is choking the economy. It is an outrage that once more we are being forced to support a redundant banking system when peoples’ lives are about to be ravaged by a severe budget in under a month.

“Our banking system is crippled. The markets want growth and growth cannot come from being burdened with failed banks. We need to salvage a dynamic banking system from this mess and this cannot be done while the Government prolongs the bank guarantee.

“To ensure a proper, functioning banking system for the people of this State we must allow the banking guarantee to lapse and we must create a State bank by nationalising AIB and Bank of Ireland.” ENDS

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