Cowen Spells Out Return To Financial 'Balance'

Beleaguered Taoiseach Brian Cowen has been addressing his party's annual conference - and given his view on the restoration of financial equilibrium.

Speaking at the weekend, he announced a radical reform of the Irish banking system and the setting up of a new banking watchdog.

He also said that taxation would increase to be paid by all workers, including the low paid.

In his first keynote address to a Fianna Fail Ard Fheis, Mr Cowen said taxes would definitely rise and at the same time, services would be cut in the short-term to help the State emerge from the recession.

"Everyone will need to pay more. And while no one can be insulated from this reality we will seek to do it in a fair way that is based on ability to pay.

"Those that can bear it best will have to bear it most. But all will have to bear some burden; the scale of the challenge is so big," he said.

However, he said that through a combination of higher taxes and increased cuts in spending balance would return to public finances by 2013.

Mr Cowen also promised to create more than 50,000 extra training places for newly unemployed people and to help graduates through job placement schemes.

He also explained that special 'back to education' courses will be offered to those who need them and a €100m fund will be administered by Enterprise Ireland to support viable companies.

Rallying his troops, Mr Cowen said that as Taoiseach, he was tasked with guiding the nation through "one of the biggest challenges of her history".

"It is the greatest honour of my life to lead this Republic, but like you, I wish these were better days," he said, also using the opportunity to attack bankers.

There was huge "anger and disgust" at the way some of our bankers behaved: "What they did was wrong, it was selfish and it caused a lot of pain and hardship to Irish people. They will not be forgiven easily," he said.

Mr Cowen said there was little return in wasting anger slamming the banks and that the Fraud Squad and the Director of Corporate Enforcement will look after that.

However, to fix the damaged caused, Mr Cowen said he would introduce new standards of banking regulation and new standards of corporate governance to restore the country's reputation and move us to the forefront of best international practice.

This new Central Banking Commission will incorporate both the responsibilities of the Central Bank and the supervision and regulatory functions of the Financial Regulator, he said.

"It will have new powers for ensuring the financial health, stability and supervision of the banking and financial sector," he said.

Within the new Central Banking Commission, the Government will appoint a new Head of Banking Regulation with "an international reputation".

(BMcC/JM)