Ireland: Bonuses for bankers would have been ‘galling’ at a time of austerity

Irish Minister for Finance Brian Lenihan yesterday wrote to Allied Irish Bank to state that any further state support of the institution would be conditional on the non payment of a proposed 40 million euro in bonuses for staff, regardless of when these bonuses relate to.

He has commented that the decision was based on his belief that using taxpayers money to fund such bonuses would be ‘unacceptable’.

An emergency meeting of the AIB Board was held following Minister Lenihan’s letter and subsequently a statement was issued acknowledging that without the support of the state the bank would not have survived and that it would have to continue relying on that support in the future. AIB has decided not to pay the controversial bonuses.

According to Minister Lenihan no bonuses were paid at any Irish financial institution in 2009 and 2010, while some pre-existing bonuses from before 2009 were paid at Anglo Irish.

Legal commentators have highlighted that legislation must be enacted to make sure the bonuses are not paid. Minister Lenihan has indicated that an ammendment will be made to the Credit Institutions Stabilisation Bill; the EU-IMF bail out agreement as transposed into Irish law.

While European Alternatives remains concerned about the austerity measures adopted in Ireland and indeed spreading across Europe with alarming speed, Minister Lenihan’s actions are a welcome development.

Please see our previous commentaries on solidarity in Ireland and European alternatives to austerity and sign our petition for a European Social Convention, calling for citizens and civil society to be directly involved in re-designing Europe’s architecture of economic governance.