Anger in Fine Gael as fears snub to vulture fund Bill may spark election
TENSIONS are rising between Taoiseach Leo Varadkar and Finance Minister Paschal Donohoe over the minister’s reluctance to accept Fianna Fáil TD Michael McGrath’s proposals on vulture funds.
The finance minister had to face down a Fine Gael backbench revolt on the proposed Permanent TSB sale of 14,000 home loans to vulture funds, after failing to heed Mr Varadkar’s declaration that the issue of how Ireland regulates vulture funds would be jointly decided by Mr Donohoe and Mr McGrath.
Last week Mr McGrath published a Bill ensuring vulture funds would be subjected to the same regulations as other
‘Leo is watching this like a hawk’
financial institutions. But sources within Fine Gael have claimed that, instead of implementing the Taoiseach’s request, the finance minister is continuing to take a hardline position on the issue.
And there are fears in Fine Gael that failure to accept Fianna Fáil’s proposals could trigger an election before the next budget in October – with the matter working in favour for Fianna Fáil.
One source said: ‘There is fury among the TDs.’
A top-level Fine Gael figure said: ‘Leo is watching this like a hawk. Mortgage arrears is the only trip-up point that can scupper the current one-year plan to get to the budget and have our election then.’
Another senior figure said: ‘Mortgage arrears has the potential to spiral out of control like Irish Water.’ In a strong signal of support for the Fianna Fáil finance spokesman, Mr Varadkar told the Irish Mail on Sunday: ‘I think Michael McGrath’s work on this and on tracker mortgages before is genuine and wellintentioned, so I have asked Paschal to work with him on a solution that is legal, workable and doesn’t create any unintended problems.’
He added: ‘We are keen to put in place any additional protections to ensure people making an honest effort to settle their debts are treated fairly by banks and investment funds.
‘While the tsunami of repossessions – that some commentators have predicted for years – hasn’t happened, we want to make sure it doesn’t.’
But Fine Gael backbenchers claim Mr Donohoe has taken a far chillier approach – with some saying he’s starting to resemble his predecessor Michael Noonan. One source said: ‘There was a backbench revolt on this issue in the party last week. Twenty-six people spoke out saying that we should support McGrath.’
The source said: ‘Mr Donohoe gave an incredibly hardline speech saying there was no cash to purchase homes in arrears outside of vulture funds. He said it was the job of the Government to take pain on this and that Fianna Fáil’s job was to exploit it for political gain. Then, after the 26 of us made our speech saying we weren’t too keen on pain, Paschal replied to us with the same speech. I detect choppy waters ahead.’ Another TD said: ‘It was almost as though a bit of Michael Noonan has been grafted on to him and he’s turned into Noonan.’
One Fine Gael senior figure said: ‘Paschal has been driving everyone mad. His priority appears to be to protect the credibility of the bank because of our status as shareholders.’
One minister warned: ‘He doesn’t appear to understand our shareholders are the voters.’ A key Fine Gael strategist warned: ‘This could be Fianna Fáil’s last best chance to go to the country on a winning ticket.’
‘He’s turned into Noonan’