Bankers’ bonuses an injustice too far

The 26-County government has been forced into a sharp policy reversal over the payment of bonuses to senior bankers.

Legislation is to be introduced compelling the majority state-owned AIB bank to withhold around 40 million euro worth of bonus payments to its senior staff.

AIB, which has been the recipient of several billions of euro in state bailouts over the past three years, claimed it had been trying to get out of paying the bonuses.

The payments amount to almost a quarter of a million euro for some executives. They were announced last week at the same time as punitive austerity measures were introduced for low paid workers and welfare recipients to pay for the bailout.

The bonuses stem from 2008, the year a massive meltdown in the over-leveraged Irish banking sector led to state intervention. Some believe the extraordinary payments are being used as ‘hush money’ to prevent untoward revelations over Ireland’s corrupt ‘golden cicles’.

Announcing the decision, Minister for Finance Brian Lenihan evaded questions as to why, last week, he claimed it was impossible to prevent the payments.

He admitted it would have been “galling” for the taxpayer to have paid 40 million euro in bonuses to senior bankers at a time when he was asking everyone in the country to make “sacrifices”.

Asked why he didn’t move more quickly on the issue Mr Lenihan said only that Ireland is “not an easy country legally speaking”.

The reversal comes ahead of a vote to approve an 85 billion euro bailout loan deal for the 26-County state and its now state-run banking system. The deal with the International Monetary Fund and the European Union requires several years of broad-based austerity measures and will see foreign officials taking control of key government decision-making.

In the face of public hostility, Fianna Fail representatives have continued to announce their retirements, while many party workers have expressed reluctance to canvas angry voters ahead of next year’s election. Reports today confirmed that the coalition government is now looking to postpone a general election until March at the earliest.

The Opposition parties said the government had caved in to pressure and Fine Gael described the episode as a ‘debacle’.

Fine Gael’s Deputy Leader James Reilly says the decision was a victory for public outrage, but he criticised the government’s handling of the affair.

“I’m delighted that the public have been vindicated in their outrage about this, and that these bonuses have not been paid.

“But it’s very difficult to understand how the Minister could come out and tell us that what was impossible last week, according to himself and his government, and illegal, is suddenly legal and possible today.

“I think it’s been gross ineptitude.

“This government have created crisis after crisis and they’ve spent the last two years trying to undo them.”

Labour TD Pat Rabbitte said the decision was “yet another case where the government and the board of a State-funded bank have had to be shamed into reversing a decision that was patently unjustifiable”.

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