Nation can't afford the bailout or bank guarantee
The size of the burden being placed on each taxpayer could amount to €60,000, writes James Fitzsimons
Published 13/02/2011 | 05:00
LAST week, Brian Lenihan deferred transferring the next €10bn of bailout money to the banks. It followed a fortnight of sidestepping and changes in the Finance Bill that crippled many established businesses and adds to the financial burden of workers who are struggling to survive. Mr Lenihan may claim that it is not politically motivated, but what other reason is there?
In December, Mr Lenihan presented the four-year recovery plan in the Dail. While it did not require Dail consent, he was presenting it for information and to inform discussion. Mr Lenihan told us that the four-year plan is vitally important to our economic survival, and woe betides any politician who departs from it. So why, when the banks are in dire need of capital to meet the Central Bank's capital adequacy requirements, are funds being delayed. The measure can only restrict lending at a time when it is in short supply.
Withholding funds increases financial risk, and this will have a damaging effect on money markets. Maybe holding back the €10bn gives us more time to reconsider what is best for the economy.