Taoiseach Brian Cowen has opted to leave the fate of Quinn Insurance in the hands of the Republic’s Financial Regulator and High Court.
Although both he and Brian Lenihan are being briefed on the situation by their officials, there has been a conscious decision not to do anything which would constitute interference with the work of the regulator Matthew Elderfield or prejudice today's High Court hearing.
According to a Government source, there is an awareness Mr Elderfield has to be allowed “do his stuff” to restore the battered reputation of financial regulation here. And although Agriculture Minister Brendan Smith spoke favourably of the employment provided by the Quinn Group in his native county of Cavan, the source said he was merely representing his local area rather than indicating any government support for the position of Quinn group owner Sean Quinn.
Dublin has refused to say whether it is in favour or opposed to the deal proposed by Anglo Irish Bank to take a majority stake in Quinn Insurance — so that it can improve its chances of recovering some of the €2.8bn (£2.4bn) it is owed by the Quinn Group.
It is leaving the ultimate decision on the deal to Mr Elderfield — and will assess the Anglo proposal if he gives it the go-ahead. The government is conscious of the public anger at the weak financial regulation in the past which allowed Anglo Irish Bank to engage in reckless property lending — and which has required the taxpayer to prop it up with €12.3bn (£10.7bn) so far in recapitalisation funds.
A spokeswoman for Mr Cowen yesterday said he had always emphasised the importance of respecting the independence of the Financial Regulator. She said the government would be waiting until the regulator had made his decision before deciding on its response.
Mr Cowen re-affirmed the independence of the regulator last week when he was personally contacted by Sean Quinn, the owner of the Quinn Group.
Mr Smith told RTE's This Week that the Quinn Group employed 5,500 people and was a major export earning company — with 55% of its business transacted outside this jurisdiction, but 95% of its workforce based here. He also said the company had 70-80 lorries leaving Cavan and Fermanagh every week with building materials, glass and other products for the UK market. But Mr Smith said any deal to resolve the crisis needed to meet the requirements of the Financial Regulator.
“Nobody's interfering with the work of the regulator,” he said.