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Thursday 22 March 2018

Cowen rejects proposal to delay extending guarantee

Fionnan Sheahan and Patricia McDonagh

TAOISEACH Brian Cowen yesterday refused to wait until the end of the year to extend the bank guarantee.

Fine Gael leader Enda Kenny said the scheme was not due to run out until December 31 and an extension should be put back until talks with the European Commission, European Central Bank and the International Monetary Fund were completed.

However, this proposal was rejected by Mr Cowen.

The Taoiseach also defended the bank guarantee from attacks from Labour Party leader Eamon Gilmore.

Mr Gilmore said he warned in September 2008 that the blanket guarantee "was handing over the deeds of the country to the banks". "Now we know the truth of it. The deeds are being called in," Mr Gilmore added.

Mr Cowen said that without the banking policies, there would have been an "implosion" in economic terms in September 2008.

"The fact is that there is support for the guarantee system because it has been replicated in other countries," he said.

Junior finance minister Martin Mansergh said that if the scheme was not extended to the end of next year, there would be funding difficulties immediately.

"We must extend the scheme and, in doing so, heed the advice of the governor of the Central Bank, who strongly endorses the need to extend the scheme to safeguard the stability of the system and the overall economy -- a position shared by the European Central Bank, which has also endorsed the extension to the end of 2011 on financial stability grounds," he said.

Fianna Fail TD Michael McGrath said if there was a bailout, then the taxpayer should not have to foot the bill for it.

Irish Independent

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