Opposition parties have rounded on the Government over its rescue of Anglo Irish Bank, claiming the bailout had bankrupted the State.
As the Dáil debated the Government's latest estimate for restructuring the collapsed bank, Fine Gael's Michael Noonan said the Government’s reputation lay in “tatters” as a result of its decision to save the bank.
“We can no longer trade on bond market because the credit worthiness of the sovereign State is gone", he said.
Criticising the decision to guarantee Anglo debt, Mr Noonan said: “In a choice between the sovereign and a financial institution you must opt for the sovereign. I accept you were badly served by the Central Bank and your advisors but at the end of the day you are the minister and you are responsible for the disaster.”
Ireland was now nearly at the point where the rescue of Anglo Irish had brought down the country, he said. Contrary to assertions that Anglo was to big to let fail, Mr Noonan said in reality it was "too big to save” and “we shouldn’t have gone there”.
The Government is “like a losing gambler, doubling its bet in the vain hope it will win the last race".
Earlier the Minister for Finance Brian Lenihan said subordinated bond holders will share the burden of losses in Anglo.
“It is right and proper that subordinated bond holders should share the costs that have arisen, indeed I am of the view that a very steep discount must apply to these bondholders," he said.
Mr Lenihan said his department is working with the Attorney General to draw up legislation specific to Anglo Irish Bank and the INBS which will address the issue of burden sharing by subordinated bond holders.
He said he had no plans to change the position of senior debt obligations as legally to affect such changes is very in doubt.
"I am not saying on the record of this House that it is not legislatively competent to impose haircuts on creditors but were we to impose haircuts on senior bond holders equivalent haircuts would be required to be imposed on depositors.”
Labour's Joan Burton said the Government “had failed” the people and today would be remembered as “Brian Lenihan’s Black Thursday”.
She criticised Mr Lenihan over an interview he gave to the Financial Times yesterday, claiming the minister outlined the cost of the banking bailout while the Taoiseach was in the House saying he didn't know the figures.
“The minister looks to the foreign and the English media to make an announcement when it should have been given to the domestic parliament…this is putting us back into the 19th century," she said.
Sinn Féin’s Arthur Morgan said the bill for this bailout will “bankrupt the State”. “Why should we socialise the losses of the financial sector. Why should we inflict pain on our people for the unbelievable greed of bankers?” he asked.
"No matter what language the Government tries to hide behind the fact is that the taxpayer will have to pay."
“This Government has done more to ruin the future of this country in one day than any other group has ever done…The Minster has led Ireland on a trajectory of perpetual debt for decades to come.”
He described what is happening as frightening and said he didn’t believe the Government had a mandate to carry it out.
Independent TD Maureen O’Sullivan said it “seems there is a bottomless pit of money and guarantees when it comes to banks but when it comes to ordinary people they are told to accept cuts.”
She said: “reckless financial and fiscal management” are at the core of what is happening in the country now and she asked when the “enormous salaries and bonuses” are going to be tackled and finished once and for all.
“It’s a mark of a civilised society how it protects its vulnerable, well I’m not seeing to many marks of civilisation in this country at the moment.”
Independent Joe Behan accused the banks of misleading the Government. “The mess we are in now is partly because the full facts were not given to the Government by the banks at the time,” he said.
Minister for Communications Energy and Natural Resources Eamon Ryan said there is “deep regret and anger” at the level of the banking failure. But he added that by following the Nama approach we at least now “know the scale of the problem”.
“As horrible and as difficult as those losses are, I prefer to know what they are,” he said.
“I believe we can recover from our situation, I believe we will as a people…We are a capable and skilled country,” he added.
