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Credit Institutions (Stabilisation) Act 2010: Motion (Continued)

Friday, 14 December 2012

Dáil Éireann Debate
Vol. 786 No. 4

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  12 o’clock

(Speaker Continuing)

[Deputy Pearse Doherty: Information on Pearse Doherty Zoom on Pearse Doherty] Sinn Féin will oppose this motion, as it, Fine Gael, including the Minister for Finance, Deputy Noonan and the Labour Party did in 2010.

Acting Chairman (Deputy Olivia Mitchell): Information on Olivia Mitchell Zoom on Olivia Mitchell The next speaker is Deputy Seamus Healy, whom I understand is sharing time with Deputy Boyd Barrett.

Deputy Seamus Healy: Information on Seamus Healy Zoom on Seamus Healy I will not be sharing time.

Deputy Michael Noonan: Information on Michael Noonan Zoom on Michael Noonan An early Christmas in Killiney.

Deputy Seamus Healy: Information on Seamus Healy Zoom on Seamus Healy I welcome the opportunity to speak on this motion. The extension of the Credit Institutions (Stabilisation) Act 2010 is inadequate in terms of protecting the interests of Irish people, bank customers and, to use the words of James Connolly, "The re-conquest of Ireland by the Irish people".

More than €60 billion in borrowed public funds have been poured into failed Irish banks, for which the State - I should say Irish families - will have to pay €9 billion in debt service in 2013. These are the same families attacked in a blunt and brutal fashion by this Government's recent budget, in which there was no sense of fairness or equity. These families are already under serious pressure and are unable to bear this burden. The banks have been allegedly recapitalised to enable them to alleviate the burden on hard pressed mortgage holders and to provide finance for small businesses. We now know that the banks are doing neither. Central Bank figures published yesterday indicate that one in four mortgages is in distress and 86,000 mortgage holders are in arrears of more than 90 days. The situation in the buy-to-let sector is even worse. The banks are doing nothing about this despite their having been recapitalised specifically to address mortgage difficulties. As already stated, mortgage interest rates are a rip-off of mortgage holders. We recently learned that the Government is to facilitate the banks in the repossession of homes by way of the introduction of new legislation.

Earlier this week we heard yet again that the rate of refusal of funding for small businesses has increased. This has led, and will continue to lead, to business closures and job losses. Every Deputy in this House knows that businesses in the high street of every town and city in this country are closing. Most of the businesses in Market Place, Clonmel have closed. The money poured into the banks was used to bail out European banks and finance houses that had over-loaned to Irish banks in a financial gamble. That is exactly what has happened.

The claims that he has no power under the Act to force banks to reduce massive salaries and pensions to current and former bank executives. Currently, a retired chief executive officer of the Bank of Ireland is being paid an annual pension of €650,000. Under public pressure, the retired chief executive officer of Allied Irish Bank voluntarily took a modest cut in his annual pension. It was stated - admitted might be a better word - at a recent Oireachtas committee hearing that €1 billion of recapitalisation money for Allied Irish Bank had been transferred to its pension fund to meet the cost of some of these enormous salaries and pensions. The Minister said he cannot force changes in this area for legal reasons, which is unacceptable. This matter must be addressed.

The Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, recently stated that the promissory note in respect of Anglo Irish Bank, now, Irish Bank Resolution Corporation, was not paid last year. It is important to state that it was paid last year and that the State incurred additional costs as a result. A further €3.1 billion is due next March. This will cost an additional €1.9 billion in interest. This money should not be paid. Another matter that must be dealt with is that of public interest directors in the banks, of which there are two in Allied Irish Banks, Bank of Ireland and Permanent TSB, who were nominated by the previous Government and have, since their appointment, accumulated significant directors' fees. For example, the fees for the public interest directors on Allied Irish Bank, Mr. Michael Somers and former Tánaiste and Labour Party member, Mr. Dick Spring, are €248,000 and €132,00 respectively; for the public interest directors in the Bank of Ireland, Mr. Tom Considine and former Fianna Fáil Minister, Mr. Joe Walsh, are €240,000 and €217,000 respectively; and for the public interest directors in Permanent TSB, Ms Margaret Hayes and former Fianna Fáil Minister, Mr. Ray MacSharry, are €207,000 and €183,000 respectively. Between them, they have made more than €1 million in fees yet they have apparently never met or communicated with the current Minister in respect of their responsibilities. Why are these public interest directors in a minority on boards of banks in which the State has a majority shareholding at the same time as mortgage holders and small businesses are suffering on or going out of business?

The Government sold 35% of Bank of Ireland to an American venture capital company for just over €1 billion. The State owns 15% of that bank, for which it paid €5 billion in terms of recapitalisation. NAMA also purchased Bank of Ireland loans at a cost above their market value. Bank of Ireland is now more answerable to an American venture capital company, which purchased 35% of it for €1 billion, than it is to the Irish people who rescued it by way of recapitalisation of €5 billion. The recent call by the Minister of State, Deputy Joe Costello, for the former chief executive officer of the Bank of Ireland, Mr. Richie Boucher, to reappear before an Oireachtas committee is mere window dressing. Legislation is required to protect the interests of the Irish people in the banks and to make directors answerable to the Government and the Dáil.

Rather than extending this grossly inadequate Act, under which the Irish people are being swindled, legislation should be introduced to absorb the State-owned banks, Allied Irish Banks and Permanent TSB into the public service so that they can be brought under direct democratic control.


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