Lenihan defends bank guarantee extension

Lenihan defends bank guarantee extension

Finance Minister Brian Lenihan has defended his decision to extend the Government's bank guarantee scheme which was due to run out tonight.

Minister Lenihan said he is bewildered by Opposition attempts to suggest that the scheme introduced two years ago is the source of all economic evil.

Labour is voting against the extension - describing it as another blank cheque for the banks - while Fine Gael is expected to support the plan with certain conditions.

Fine Gael leader Enda Kenny earlier accused Minister Lenihan and Taoiseach Brian Cowen of colluding with bankers in introducing the bank guarantee, a decision which he called "the most catastrophic in the history of the State."

But Minister Lenihan said the Irish economy would have collapsed if the guarantee had not been introduced.

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