THE COUNCIL of State will meet tomorrow to advise President Mary McAleese on emergency banking legislation which has come in for strong criticism.
Fianna Fáil TD Ned O’Keeffe yesterday described the Credit Institutions (Stabilisation) Bill 2010 as “a frightening piece of legislation” which would give the Government more power than the special legislation of the 1930s.
The former head of the National Treasury Management Agency, Dr Michael Somers, has also warned against the legislation approved by the Dáil and Seanad last week.
Dr Somers, who is now a public interest director of Allied Irish Banks, voiced his concerns at a meeting of Fianna Fáil TDs and Senators in Leinster House.
“Dr Somers said the legislation was draconian as it conferred extraordinary powers on the Minister to acquire and dispose of bank assets, appoint a special manager to run a bank, set aside existing agreements and even prevent publication about actions he has taken,” said one TD.
He added that Dr Somers asked what foreign investors looking at Ireland would think of a country that had a law which allowed the Minister for Finance to set aside a contract on a whim.
Under the terms of the Constitution the President is entitled to refer Bills to the Supreme Court “for a decision on the question as to whether such Bill or any specified provision or provisions of such Bills is or are repugnant to this Constitution”.
Before referring a Bill, the President is obliged to convene a meeting of the Council of State.
AIB and the Government are awaiting the outcome of the councils deliberations before finalising the banks capital raising plans. The bank needs about €10 billion in new capital by the end of February.
An announcement on AIB’s recapitalisation plans could be made before Christmas Day.Weekend reports suggested AIB could be fully nationalised but it is understood no final decision on this has been made. It is likely, however, that the State will end up with more than 90 per cent of AIB’s shares. The new legislation gives the Minister the power to de-list a financial institution from the stock exchange. But it is not clear if he will apply this to AIB.