Belfast Telegraph

Top union boss says don't scapegoat ordinary bank staff in blame game over Irish financial meltdown

Ordinary bank staff should not be made scapegoats for the collapse of Ireland's once booming Irish banking sector, union leaders said.

About 6,000 finance jobs have already been lost since the start of the crisis, with another 1,000 workers due to be axed before the end of the year.

Bank of Ireland and Allied Irish Banks - two of six institutions put to stress tests yesterday - employ 2,540 people in Northern Ireland.

Unite trade union urged the human cost for workers to be carefully considered by parties involved in the overhauling of the banking system, announced by Finance Minister Michael Noonan.

Jimmy Kelly, general secretary, said: "There are many thousands of workers and their families who will be anxious tonight over their personal future.

"They have not caused the problems of the banking system but will now be afraid that they will be the ones asked to pay the ultimate cost in terms of their jobs and financial security."

Meanwhile, the country's former finance minister warned that Ireland's economy could buckle if the worst-case scenario outlined in the stress tests comes true.

Brian Lenihan said he hoped proposals by his successor to "literally stuff" the banks with capital to ensure international credibility succeeds.

"The clear assumptions of these stress tests are very dangerous for this economy, because unless our house purchase market, and unless investment takes place in the property sector generally, we will not have any economic recovery," said Mr Lenihan - rated the worst finance minister in Europe for two years running by the Financial Times.

"We'll continue in a vicious rather than a virtuous cycle of decline, both in relation to the economy generally and in relation to the banking sector.

"So it's very important that we make clear that the stress tests are just that, that they are testing an extreme scenario."

But Sinn Fein's Pearse Doherty accused the new Cabinet of continuing with the reckless policies of the previous Fianna Fail Government.

"It beggars believe that this so-called alternative Government is to pump another €24bn (£21.2bn) into the defunct banking system," he said.

"This open-ended commitment to cover bank losses plainly exceeds the fiscal capacity of the state.

"The losses of the banking sector have become the losses of the taxpayer.

"Bank debt has become sovereign debt. And that is the problem and it is the ordinary citizens who are suffering for these failings."

Mr Noonan earlier revealed the Government would reduce the number of domestic banks to two new "universal pillar banks".

Allied Irish Bank - once the country's biggest bank - will be combined with the EBS building society, while Bank of Ireland will form the first pillar of the new banking system but will be forced to sell off €30bn (£26.4bn) of assets by 2013. Irish Life -amp; Permanent (IL-amp;P) will be forced to sell its lucrative pensions division Irish Life.

IBOA, the largest trade union in Ireland's banking sector with 22,000 members, fears the proposals could result in significant job reductions.

General secretary Larry Broderick said: "Ordinary bank staff should not be made scapegoats for a short-term cost-cutting agenda. Short-termism has been a major contributory factor creating the current crisis.

"The problem will be compounded if we try to resolve the crisis through short-term actions."

Unite, which has 5,000 members in IL-amp;P, EBS, Bank of Ireland and AIB, has a pre-arranged meeting with the Central Bank on Monday.