Fine Gael’s Brian Hayes said the Government was panicking as it did not need to bring forward the extension yet but was worried about the unravelling financial situation.
“There is fundamentally an issue of political credibility. The markets do not believe the Government, nor do the Irish people. The Dáil does not believe it. I suggest this is ridiculous,” he said.
He added that the debate should have been postponed until the Finance Minister – who is in Brussels – was available to defend it.
Labour’s Joan Burton warned the blanket guarantee scheme had done severe damage to the country since it was imposed in September 2008 and it should be scrapped and replaced with a new resolution scheme which would allow some institutions to go to the wall.
Junior department of finance minister Martin Mansergh insisted the scheme was essential.
“Were the scheme not extended to the end of 2011, make no mistake, we would be faced tomorrow with difficulties in funding that would jeopardise the financial stability of the state. We must extend the scheme and, in doing so, heed the advice of the Governor of the Central Bank, who strongly endorses the need to extend the scheme to safeguard the stability of the system and the overall economy – a position shared by the European Central Bank which has also endorsed the extension to the end of 2011 on financial stability grounds,” he said.