Sinn Féin MEP Liadh Ní Riada has accused the Government of protecting their own vested interests in banks.
The Ireland South MEP was responding to a report released by the government today which claims there is ‘no compelling case’ for the establishment of a public banking system in Ireland.
Ms Ní Riada, who sits on the EU Budgets Committee and has long been an advocate of introducing public banking into Ireland said the report doesn’t present a single coherent argument against public banking and is mainly concerned with upholding the current monopoly of the existing pillar banks.
“It’s quite clear this report is designed to soothe the fears of the existing pillar banks and assure them that as far as monopolies, corruption and outrageous fees go, Fine Gael and Fianna Fail will make sure that it’s business as usual,” she said.
“Public banking has been an outstanding success right across Europe. Indeed, in countries like Germany people find it hard to believe there is no public banking system in Ireland.
“Ireland is experiencing a long-term liquidity crisis brought on by a failure of the banking system. Since then, cosmetic reform is all we have seen, while underlying problems have not been addressed and scandal after scandal have been allowed to go ahead.
“Public banking is a tried and tested alternative that needs serious consideration. Public banking models have proven more resilient to economic shocks, better for regional development and more capable of providing financing to SMEs.
“Yet the government claims to see no merit in them? It’s quite clear this report was not an investigation into the pros and cons of public banking but a tactical rejection of a model that would upset the status quo.
“Indeed, the best argument against the government is their own report. It highlights the fact that the banking market in Ireland is highly concentrated, with only five banks operating, three of which have over 90% of the market-share.
“It further details how this lack of competition and past banking failures have led to Ireland having some of the highest interest rates in Europe.
“The report even highlights the government’s conflict of interest in evaluating the potential of a publicly owned banking network in Ireland, detailing the government’s role as a significant player in the private banking market, through its shareholdings in AIB, Bank of Ireland and Permanent TSB.
“Private banks have been reluctant to enter the market or expand operations. This has caused real interest in public banking models that have proven successful in countries such as Germany.
“The most successful German model is the Sparkassen and the report directly assesses the merits of this model and its potential to work in Ireland. It describes the Sparkassen ethos as “not profit maximisation; rather it is public interest based, promoting financial inclusion and economic development within their regions.”
No wonder this government has no interest in it, their ethos flies in the face of everything they have done since getting into power.
“The government offers no valid reasons why the Sparkassen model could not be successful in Ireland. Instead, it questions the very need for reform at all, as it claims the banking environment has marginally improved in recent years compared to the depths of recession.
“Given this is the bar they have set for themselves is it any wonder the much vaunted recovery seems to have been restricted largely to the leafier Dublin suburbs and to inside Leo’s head.
“These are not serious refutations of the proposal nor the potential merits of public banking. It reflects a complete lack of interest in really improving banking in Ireland. These are lazy dismissals of an initiative because it would offer people an alternative to the pillar banks the government is determined to protect.”