Wednesday 14 November 2018

Get army ready to protect banks: Central Bank’s warning to Taoiseach during crisis

The dramatic plea for a “fallback position” to be drafted was made to Taoiseach Enda Kenny sometime after he came to power in 2011.
The dramatic plea for a “fallback position” to be drafted was made to Taoiseach Enda Kenny sometime after he came to power in 2011.

Niall O'Connor, Fionnan Sheahan and Ralph Riegel

THE Government had contingency plans to provide armed Defence Force security for major Irish banks over public order fears if a cash shortage was triggered at the height of the financial crisis.

The emergency "fallback position" was put in place under former Taoiseach Brian Cowen and then ratified when Taoiseach Enda Kenny and the Fine Gael/Labour Coalition took power.

Tanaiste Joan Burton (Lab) confirmed the measure but warned it was important for Ireland to now look forward and not back.

"It seems like a long time ago though it is less than four years since we came into Government."

"Yes, the times were very difficult. There was a huge emphasis on security because the Queen of England was about to visit as was (President) Barack Obama," she said.

"There were concerns in relation to the banks though, thankfully, none of that contingency type of planning was necessary."

"The important thing today is that, year on year, unemployment has fallen...what that means in practical terms is that a lot of people who were not working are now working and families have an income."

"I think what we really need to concentrate on now, interesting and all as the history is, is how we move the economy forward and how we get a social recovery into the economy."

The revelation that army units were being prepared to provide armed security around Irish bank cash centres came as Defence Minister Simon Coveney launched a staunch defence of Taoiseach Enda Kenny and his leadership of both Ireland and Fine Gael.

Mr Coveney's comments came as former FG Cabinet minister, Ivan Yates heavily criticised Mr Kenny's leadership and suggested the party could now start looking for his successor.

Mr Yates, who served in Cabinet alongside Mr Kenny under former Taoiseach John Bruton, said the water charges issue had seriously damaged Mr Kenny and his leadership.

However, Mr Coveney insisted that Ireland owed an enormous debt to Enda Kenny and cited how Ireland, now the fastest growing economy in Europe, was once worried about providing armed protection for banks.

"We were losing about 1,000 jobs per week. The economy was wrecked and the country was bust," he said "The Taoiseach was getting briefed by the Central Bank that actually he needed to have a fall-back position whereby the army might be needed to surround banks to protect them because we could literally run out of money."

"That is how close to the edge we were as a country because of political mismanagement in the past."

The Cork TD said that from that precarious financial position Mr Kenny had guided Ireland out of the 'Troika' governance programme and helped make the domestic economy the fastest expanding in Europe.

Mr Coveney also said that Ireland is now creating record numbers of jobs and is set to drive unemployment below 10pc.

He said that while mistakes had clearly been made in relation to the water charges issue, the Government had helped restore Ireland's economic and financial credibility to the point where the future is very bright.

Mr Kenny personally hit out at Mr Yates' comments.

He accused the former Wexford TD of being "a mercenary" and said he had been "very wrong in the past."

Mr Yates is now a top broadcaster with Newstalk and has written an acclaimed biography detailing his political career and the personal financial challenges he faced over the failure of his betting firm at the height of Ireland's economic crisis.

Speaking on the Isle of Man today, Mr Kenny said the country was "perilously close to an economic abyss" and was just three months away from reaching a point where it could no longer afford to pay social welfare or the wages of civil servants.

Mr Kenny today said he believes the public need to reflect on "how bad things were" in the months surrounding the election of the Fine Gael/Labour government.

But he refused to confirm claims by Minister Coveney that he was briefed to have the army ready to prevent a run on the banks.

"I think it's an indication of just how bad things were that you had a situation where the State had about three months money left to pay social welfare, to pay gardai, the teachers and nurses and everything else," Mr Kenny said.

"The situation was perilously close to an economic abyss," he added.

"I don't want to comment on the individual things that the minister referred to but to reflect that the situation the government inherited was absolutely perilous."

Meanwhile, Mr Kenny told reporters that the decision facing voters at the next election is to return Fine Gael to power or to opt for a coalition "possibly led by Sinn Fein".

He said that Fianna Fáil "have no place" forming a Coalition with Fine Gael and that many TDs in Micheal Martin's party appear to favour joining forces with Sinn Fein.

Online Editors

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