Prime Minister Brian Cowen said his government had no choice but to pass a controversial emergency law guaranteeing deposits last week, as the national interest was at stake.
'The bottom line from our point of view is that last week's decision was an essential step by us to bring stability to the financial sector in Ireland. I stand by the decision that the Irish government took,' he told RTE state radio.
Ireland's lawmakers overwhelmingly endorsed the guarantee after the government proposed emergency legislation in response to what it said were threats to its financial system.
The two-year guarantee, which costs more than 420 billion euros (S$831.5 billion), covers Allied Irish Bank, Bank of Ireland, Anglo Irish Bank, Irish Life and Permanent, Irish Nationwide Building Society and the Educational Building Society.
Portugal became the latest European government to announce a similar measure Monday, following Greece, Denmark and Germany, while Britain has said it is considering extending a 50,000 pound (S$127,835) limit on what it guarantees.
Mr Cowen said he was not suggesting 'for one moment that it (the guarantee) is the panacea,' the solution to all Ireland's problems.
What it had done was 'stopped the outflows that were taking place that were putting at risk the whole financial sector'. 'We simply had to respond,' Mr Cowen told RTE state radio.
'We seek to deal with this matter in as cooperative a way as possible, but there are certain issues where our national interests were at stake and we simply had to move,' Mr Cowen said.
He said every government was trying to come to terms with the situation as it was developing.
'We are seeing developments by the day rather than by the week or the month so people are reacting and dealing with the situation as they see fit themselves,' Mr Cowen said.
Britain in particular has argued that the guarantee is unfair amid fears of a surge in switching savings from British banks into Irish deposit accounts. -- AFP