Belfast Telegraph

McAleese calls talks on bailout law

President Mary McAleese has called for a meeting of the Council of State to examine new laws covering the multi-billion euro bailout and the banks.

In an unusual move, the president will on Tuesday convene the body, made up of the country's most senior serving and former office holders, to discuss the Credit Institutions Bill rather than simply signing it into law.

The body advises the president on whether a law is constitutional, but Mrs McAleese alone will make the decision on whether to refer the legislation to the Supreme Court after the meeting.

The Credit Institution Bill details new laws to oversee the controversial 85 billion euro bailout from Europe and the International Monetary Fund.

The Government plans to draw down 10 billion euro initially to pay into banks, with another 25 billion euro set aside as a contingency fund.

The radical rules will impose so-called burden-sharing on global money markets, with some subordinated lenders forced to take a hit on loans made to Irish banks.

The Department of Finance said the legislation allows the minister to issue directions or prevent actions in order to support the Government's banking strategy and to transfer assets and liabilities to facilitate restructuring.

It will also set in stone how the Government can make subordinated liabilities orders, on a case-by-case basis and under particular conditions, to achieve burden-sharing with international lenders.

Finance ministers will be given the power to parachute special managers into banks to oversee reforms.

The Bill will also underpin Minister for Finance Brian Lenihan's pledge that much-needed money will only be given to Allied Irish Banks if the controversial 40 million euro bankers' bonuses are scrapped.

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