Kenny claims ‘bad bank’ plan is unworkable

FINE Gael leader Enda Kenny slammed the “bad bank” idea as unworkable yesterday.

Comments made by Michael Somers, head of the national Treasury Management Agency, to a Dáil committee last week seriously questioning the viability of the National Assets Management Agency NAMA), meant “the plan was already holed below the water line,” he said.

Fine Gael’s proposal would park the bad debts of the banks without having to try and put a value on them, an impossible task in the current economic climate, he said.

The Fine Gael plan would free the banks of their bad debts and allow them to the start pumping vital funding into the struggling Irish business sector, he said.

He was speaking at the launch of an 18-point rescue plan to support small business that would save the average firm about €50,000 a year. The strategy would also protect 80,000 jobs currently under threat and deliver a further 100,000 new jobs, he said.

The party’s enterprise spokesman Leo Varadkar said the plan would cut costs, improve competitiveness and protect jobs.

He ruled out the idea of an assault on the minimum wage which hits the most vulnerable of the working population. As it stands it provides a wage of €375 for a 40-hour week and wasn’t much higher than what those “who are not working” get to live on.”

In that context: “We wouldn’t propose to cut the minimum wage,” he said.

The measures to support small businesses include the tackling of business costs such as rent, a freeze on Government charges, and concrete steps the Government can take to protect jobs.

“Small businesses are the backbone of the Irish economy. There has been a silent haemorrhaging of jobs from small & medium enterprises across the country,” added Mr Kenny. “Despite that the Government has failed to produce any concrete measures to support SMEs and stem the tide of rising unemployment.”

Recent budgets made a bad situation worse for both workers and employers.

The increase in VAT rates that drove millions of euro of business north of the border is a classic example of that type of poor decision making by this Government, Mr Kenny said.

He also spoke of the need to free up the banks to lend to businesses. He knew of one case where a man in business for 50 years had to let five people go recently for the first time ever. Both he and the five workers “cried” the day he made them redundant, he said.

Yet when the same businessman sought an extension of his overdraft his local branch manager had to refer the matter to Dublin and it was refused.

“That decision was taken in Dublin by a guy who never created a job in his life,” and it further highlighted the need to get the banks back lending.