Lenihan's sweeping bank laws face legal challenge
PRESIDENT Mary McAleese is now widely expected to refer the new banking laws to the Supreme Court today, rather than signing the legislation.
Taoiseach Brian Cowen will brief his cabinet colleagues this morning on his approach to this afternoon's meeting with the President and her advisory council on the laws.
Finance Minister Brian Lenihan's sweeping new powers to reform and restructure the banking sector were dealt a separate blow when the European Central Bank (ECB) raised serious concerns about the controversial banking legislation.
The questions raised by the President and ECB cast a doubt over the minister's plans to overhaul and restructure the banking system.
The President called a meeting of the Council of State for this afternoon to decide if the banking legislation is potentially unconstitutional.
Government sources say there is now an expectation the President will refer the bill to the Supreme Court.
President McAleese has seven days to sign the Credit Institutions (Stabilisation) Bill 2010, which was rushed through the Dail this week, or refer it to the Supreme Court.
Mr Cowen, Tanaiste Mary Coughlan and Attorney General Paul Gallagher are members of the Council of State.
Tourism Minister Mary Hanafin was careful not to pre-empt the outcome of the President's meeting, so stayed away from discussing the constitutionality of the bill.
"From a European perspective, the draft of the bill was sent to them and then a final draft was sent on December 11, but there's nothing in this bill that would reduce the powers for example of the Central Bank, they are the people who have to ensure the transactions are all in keeping with that independent authority, so we're satisfied from that perspective anyway.
"But other issues that the President will be discussing I think it's best to leave to them," she said.
Ms Hanafin said the legislation gives "very wide-ranging powers" to the Finance Minister. But the security of the ECB is guaranteed in the NAMA legislation and in this legislation as well, she added.
The President called a meeting of the Council of State, under Article 26 of the Constitution, to be held at Aras an Uachtarain to consult on the legislation. The council also includes the Chief Justice, the President of the High Court and the Attorney General.
It is only the fifth time during the President's two terms in office that she has called the council to specifically consider legislation. Of the six previous bills the council discussed, the President referred three to the Supreme Court.
Fine Gael finance spokesperson Michael Noonan said the law would empower the Finance Minister to do what he liked with the banks, while Labour finance spokesperson Joan Burton said the bill would allow him to override other laws.