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Government accused of ‘election stroke’ over decision to postpone recapitalisation

Brian Lenihan says that the recapitalisation has been deferred because the party no longer had a mandate – however, Fine Gael’s Michael Noonan said the move was an “election stroke”.

THE OUTGOING MINISTER for Finance and Fine Gael’s finance spokesman sparred over the postponement of bank recapitalisation – and the possibility of a new government renegotiating the EU/IMF deal –  last night.

Speaking on last night’s RTÉ Six One News, Brian Lenihan said that the current government had a “limited mandate” and, as such, it had decided to defer recapitalising some banks.

When asked if the move was an election ploy, Lenhian said: “I think you have to respect the mandate you have.”

Meanwhile, also speaking on Six One, Noonan said the move was an “election stroke” by Fianna Fáil. He said that the government should have gone ahead with recapitalisation of the banks, with exception of Bank of Ireland – which he said offered the possibility of raising private funds.

When asked how he had managed to depart from a major condition of the bailout, Lenhian said that Fianna Fáil had simply secured “an extension on the time limit” – and insisted that the ECB, IMF and Commission were in agreement.

He said that it did not necessarily indicate that the terms of the original deal can be renegotiated: “The time limit can be extended but the principles are binding,” he said

Noonan rejected the statement, saying: “The government is the government until a new government replaces it – there’s no mandate required”. He added: “We would hope to get a better deal. A number of options are on the table which will change the rules of the game.”

Lenihan agreed, in theory, saying that a change to the deal could happen provided Ireland could secure the agreement of wider EU and ECB.

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