Taoiseach says sense of crisis not justified

THE “IMPENDING sense of crisis” that some claim Ireland faces “is not a fair reflection of all the facts”, Taoiseach Brian Cowen told the Dáil.

He said those commenting on the State’s financial situation “should also remember that the exchequer is fully funded into the first half of 2011, so the impending sense of crisis that some wish to suggest the Irish State faces is not a fair reflection of all the facts”.

However, the Opposition insisted the Government would have to seek further funds from the markets by early February at the latest, and the only way to renew confidence was for the Taoiseach to resign and call a general election.

Fine Gael leader Enda Kenny said the €50 billion bank bill had cost “more money than this country drew from the social and cohesion funds since Ireland joined the EU”.

Opening a 40-minute debate on Ireland’s financial situation, Mr Cowen insisted “there is no immediate funding pressure”.

He said: “This Government’s priority throughout the banking crisis has been to safeguard deposits, and this is a concern shared by governments across Europe and by the European Commission.”

He also stressed the “strength of the Government’s commitment to safeguarding deposits in the Irish banking system in view of the recent ill-informed and inaccurate speculation by a small number of external analysts and commentators on this issue”.

He said “given the current market conditions, there have been ongoing contacts at official level with our international partners” and “this engagement has been particularly intense in the run up to the budget and the four-year plan”.

However, Mr Kenny said the bond markets, the EU and international media “have lost faith in a Government that boasted about a bank bailout it said would be the cheapest of its kind”.

He said “this is not a crisis of liquidity for our banks; this is about their solvency”. Anglo Irish Bank “was a complete disaster, but it is not clear that this Government has learned the lessons”.

“If media reports are to be believed, the Government seems intent on persisting with further bailouts of other institutions, this time with money borrowed from the EU and other European countries.”

The Fine Gael leader urged the Taoiseach to call a general election. “If the Government makes that decision, everything can change for the better.”

His call was repeated by Labour leader Eamon Gilmore, who said it was “one thing” that would help stabilise the markets. There was “no sense that anybody is in charge”.

The financial crisis was a European problem, “but the reality is that it is Ireland which is now at the apex of that storm”.

It was “quite astonishing that given what has been happening over the course of the weekend and over recent days, that there wouldn’t have been direct ministerial involvement in the discussions that have been taking place” with the EU.

He said “the fortunes of the bank and the fortunes of the State are now perceived to be as one by investors, and that’s what has us where we are”.

Sinn Féin finance spokesman Arthur Morgan accused the Taoiseach of “hiding behind words” and “this bluffing and fibbing that’s been going on for two years is part of the problem”.

He said “another fib you’re telling us that we’re doing brilliantly because we don’t need to go back to the markets for funding until mid-2011. You know that isn’t viable. You probably have on a very good day ‘til the end of January or very early February before you’ll have to go back to the markets.”

He told the Taoiseach: “The banks are absolutely and totally broke. They have no funding. And you’re telling us that this State can handle that burden.

“Already €50 billion has gone into the recapitalisation, plus in the order of €100 billion from the ECB, and you think that we can continue to fill that black hole that is the Irish banking system.

“Well, it isn’t good enough, and one of the reasons is because many of the crooks who were there at the head of banking through all of this are still in place.”

He said Sinn Féin remained “adamant that what is needed is a stable, steady trustworthy State bank. If you had put that in place two years ago instead of the nonsense you got up to, then I believe we would not be in the deep crisis we are in at the moment.”