Tánaiste Eamon Gilmore has reacted angrily to comments by Fianna Fáil leader Micheál Martin that the bank guarantee was "the least worst option" and described it as a "disastrous option". Mr Gilmore said the Fianna Fáil-led Government had put taxpayers "on the hazard" for the liabilities of the banks, amounting to €440 billion, by introducing the blanket guarantee five years ago this weekend.

'Bloody bust'
"The theory was that the State would be so strong that the banks would survive. Instead the reverse happened – the banks were so bloody bust that they almost brought the State down," he said.

Speaking on the sidelines of the UN general assembly in New York, the Labour leader said the September 2008 bank guarantee had left the State in "a situation where it ended up without anybody in the financial markets willing to lend us a penny" and "plunged" the country into the EU-IMF bailout programme. Mr Gilmore's party voted against the emergency measures at the time.

'Torrid time'
Mr Gilmore said the guarantee had put the State "in the eye of the storm" that caused the crisis in the State's finances and put the country into receivership. "We are getting out of it. We will be out of the programme at the end of this year but my God what a torrid time we have had, households have had, companies, people at work," he said.

Earlier Mr Martin had said: “I would still hold the view . . . that it was the least worst option at the time,” he said on RTÉ’s Today with Sean O’Rourke radio programme.

He believed that if the bank guarantee had not been offered, the situation could have been much worse.