'Socialism for bankers' to cost each taxpayer €22,000, claims Burton

RECAPITALISATION and the transfer of assets to the National Asset Management Agency (Nama) was “socialism for bankers and for developers”, but not for ordinary taxpayers who would each pay €22,000 for Anglo, the Dáil was told.

Labour finance spokeswoman Joan Burton said the national debt was “likely to end up doubling” thanks to “crony capitalism” that was an inherent cause of the banking collapse.

She said that unlike other jurisdictions, “we have actually seen no justice in terms of taxpayers taking the burden. We understand our legal process has to be slow and thorough, but how can you stand over what you’re announcing today?” she asked Minister for Finance Brian Lenihan.

She said the Taoiseach might suggest it was a tragedy for every country, “but it is not. It is due to an old-fashioned property bust that was stoked by Fianna Fáil, by a series of Fianna Fáil Ministers.”

The “massive bailout” was the “natural consequence of decisions made that fateful night of September 29th, 2008. That night, you were surrounded by bankers, you took advice only from bankers,” she told the Minister.

“You meekly promised to jump through whatever hoops they put in front of you and your Taoiseach even went on radio to say no cheque could be big enough for him to sign if it was necessary to meet their insatiable demands.

“The ‘too big to fail’ doctrine, applied with no economic justification even to Nationwide and Anglo, has taken a savage toll on the economy. Today, we get the first glimpse of the likely size of this cheque. A €36 billion bank bailout package on top of Nama – €20,000 for every taxpayer.”

Sinn Féin finance spokesman Arthur Morgan told the Government: “You do not have the authority to implement a bank bailout of this scale. Your Government is at record lows of support from the public. The largest stakeholders in this decision, the taxpayers, have no faith in what you are doing.

“Over the next 10-15 years, you will recapitalise the banks by potentially €22-€32 billion and put in up to €54 billion more in Nama operations.”

He added: “Eighteen months on from the bank guarantee, we are now no nearer to achieving” a functioning banking system.

“The Government opposed nationalisation and, as many predicted, is now being forced to nationalise by stealth.”

Minister for Communications Eamon Ryan said: “I believe our problem is on a scale we can manage and there is a lower cost solution, as shocking as it is and the figures here as difficult as they are, to manage it in the way we are managing it. There was no other European country taking a default option and the European Central Bank has set itself against banks of this scale defaulting.”

Taoiseach Brian Cowen insisted the Government was forcing the banks to recognise their losses and “rid the system of the scourge of these speculative loans . . .

“It is right that we should approach the issue in this way as all other courses of action would not result in a swift return by the banking sector to its function as a provider of finance to productive enterprises.”