Opposition politicians pledge to renegotiate 'bad deal'

Opposition politicians tonight vowed to renegotiate the €85bn bailout after next year's General Election.

The massive bank and State loan facility was passed by the Dáil with the crucial support of independents but also with promises from Fine Gael and Labour to get a cheaper deal.

Finance Minister Brian Lenihan said any suggestions that the Opposition could get a better interest rate from the International Monetary Fund was laughable.

The vote clears the way for €35bn to be set aside for the banks - €10bn being drawn right away, and 50bn for the State's running costs.

The average interest rate is about 5.8%.

Michael Noonan, Fine Gael Finance Spokesman, branded the IMF/EU deal an obscenity while Labour claimed it was bad for the country.

Mr Noonan said it was a disaster that taxpayers were being saddled with debts they never ran up.

"What a disaster. What an obscenity," Mr Noonan said.

"How can the Government stand over it? How can our European colleagues stand over it?"

Eamon Gilmore, Labour leader, said: "Such is the mess that Fianna Fáil have made of the country that we need outside help.

"The question is what form of external assistance is agreed and on what terms.

"This is a bad deal for Ireland."

The embattled Government bowed to calls for the bailout vote last week but a win was never in doubt after support was secured from independent TDs Jackie Healy Rae, Michael Lowry and Joe Behan.

Taoiseach Brian Cowen faces a potential General Election battering in February or March with support for Fianna Fáil party at just 13%.

The Dáil heard both Fine Gael and Labour pledge to throw out the package and negotiate a new deal if they can decide on a programme for government and take power in coalition.

Mr Noonan said the package placed subordinated and senior debt on the shoulders of taxpayers who held no liability.

"So the Minister in his Budget reduces social welfare payments, he punishes the blind, the disabled, widows and carers and the unemployed, he taxes the poorest at work and for what?" Mr Noonan said.

"So that the taxpayer can take on liability for debts that the country never incurred, and that arose from private arrangements between private institutions."

Mr Cowen said the passing of the plan "sent a very strong signal".

Some €35bn of the €85bn is set aside for the banks with €10bn being drawn down right away and the rest held in an overdraft or contingency facility.

The rest of the money, €50bn, is set aside to keep the State running on a day-to-day basis, such is the extent of the economic crisis.

Ireland is putting in €17.5bn of its own money, from the National Pension Reserve Fund.

Another €3.8bn has been pledged by Britain. UK Chancellor George Osborne said its contribution will be split into eight payments with the first available to the Irish in September 2011.

Mr Osborne told the House of Commons the interest rate on the first tranche would be approximately 5.9%, with each section of the loan on a seven-and-a-half year term.

Small numbers of protesters from trade union groups, workers' rights and Sinn Féin gathered outside Leinster House in central Dublin as the debate and vote took place.

Inside Mr Lenihan branded contributions profoundly dreary and claimed the debate was used as an opportunity by some to score cheap political points.

He said it was laughable that a better interest rate could be negotiated from the IMF.

The Dáil vote was carried by 81 to 75 votes.

Meanwhile, new rules on reducing the size and scale of Irish banks were also being debated by politicians under the Credit Institutions Bill.

The radical rules will impose so-called burden-sharing on global money markets, with some subordinated lenders forced to take a hit on loans made to Irish banks.

Finance Ministers will be given the power to parachute special managers into banks to oversee reforms.

The Opposition criticised the Bill and the length of time given over to debate, with the Labour Party claiming it was akin to a dictatorship.

"I think this Bill could probably teach the North Koreans a lesson in ministerial powers," deputy leader Joan Burton said.