CONTROVERSIAL banking legislation which critics claim could expose the taxpayer to billions of euro more debt has been signed into law by President Mary McAleese.
In a surprise move, Mrs McAleese has decided not to send the Credit Institutions (Stabilisation) Bill 2010 to the Supreme Court for a ruling on its constitutionality.
The bill — which was the subject of just a four-hour Dáil debate last week leading to claims it had been deliberately rushed past TDs who narrowly voted in its favour — gives significant new financial sector powers to Finance Minister Brian Lenihan.
It includes new laws overseeing the €85 billion EU/IMF bailout, allows Mr Lenihan to parachute special managers into banks to control reform, make the non-payment of bankers’ bonuses a stipulation of bailouts, and confirm a new capital injection into AIB which is set to bring the state’s ownership of the firm up from 18.6% to circa 92%.
The European Central Bank has openly questioned aspects of the bill which also includes new powers for a sitting finance minister that Labour finance spokesperson Joan Burton said were rarely seen “outside of totalitarian regimes”.
This claim particularly focuses on section 28 of the bill, which Fine Gael finance spokesman Michael Noonan said potentially exposes the taxpayer to billions of euro more in losses.
It had been expected that after a rare meeting with the Council of State — which has met just 15 times since 1937 — President McAleese would either delay a decision on the bill or send it to the Supreme Court for a ruling on its constitutionality. However, after the four-hour meeting yesterday at Áras an Uachtaráin she agreed to sign the legislation into law.
The Council of State’s members include Taoiseach Brian Cowen, Tánaiste Mary Coughlan, Dáil Ceann Comhairle Seamus Kirk, Seanad Cathaoirleach Pat Moylan (all Fianna Fáil), chief justice of the Supreme Court John Murray and president of the High Court Nicholas Kearns.
Among the other members are attorney general Paul Gallagher, former taoisigh Liam Cosgrave, Garret FitzGerald, Albert Reynolds, John Bruton and Bertie Ahern, President Mary McAleese and seven presidential nominees, two of whom are Fianna Fáil members and another who is a Fine Gael representative
Speaking after the decision was announced, Ms Burton said while her party still had concerns over the legislation, under the Irish constitution “it is entirely the president’s decision”.
The Labour TD said she was happy concerns had been publicly raised about the bill and that President McAleese had consulted with the Council of State before deciding on it.
“As it stands under section 26 of the constitution it is now law. If any affected party wants to contest it, it is their prerogative.”
During last week’s Dáil debate Enda Kenny claimed it was “absolutely extraordinary” the Government would have the “audacity” to rush through a bill containing 77 sections which give “extraordinary powers” to the Finance Minister.
Mr Lenihan has said the bill is crucial to the restructuring of the bank system.
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