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Dublin: 2°C Monday 12 April 2021

Fears of Cyprus-style hit on bank deposits 'scaremongering', says MEP

Fine Gael’s Sean Kelly says there’s “no connection whatsoever” between the situations in Ireland and in Cyprus.

"As someone said, we're stealing money from back from them that stole money already."
Image: Mark Stedman/Photocall Ireland

A FINE GAEL MEP has said any suggestion that Irish bank depositors could be hit with an across-the-board levy to aid the banking sector is “unnecessary scaremongering”.

Kerry-based Seán Kelly said there was “no connection whatsoever between Cyprus and Ireland” and therefore no reason to fear that the model used in Cyprus’s bailout could be adopted in Ireland.

While a controversial one-off levy on the balances in bank accounts was rejected by MPs, the restructuring of the banking sector means depositors with over €100,000 saved in some banks could still be faced with a mandatory ‘bail-in’.

Kelly said Ireland was close to emerging fully from its financial crisis, however, and that most of the financial adjustment had already been completed.

“85% of the correction of the fiscal adjustment in Ireland has been done,” he told radioep.ie‘s Karen Coleman.

“There is no question of anybody in Ireland, whether they have €100,000 or less or more, being hit like they were in Cyprus.

“It doesn’t arise,” he said.

Kelly said the size of Cyprus’s banking sector had been “totally out of sync with its natural resources and its economy” and that the measures in Cyprus would proportionally hit Russian oligarchs, who account for a large fraction of the country’s banking deposits.

“It’s hitting those more than anyone else,” the Ireland South MEP and former GAA president said. “As someone said, we’re stealing money from back from them that stole money already.”

Click here to listen to Kelly’s comments (mp3).

Read: Eurozone head insists Cyprus deal not template for future bailouts

More: All banks in Cyprus will now stay closed until Thursday

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Gavan Reilly

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