- Title: IRELAND: Final price tag of bank bailout revealed
- Date: 1st October 2010
- Summary: DUBLIN, IRELAND (RECENT FILE) (REUTERS) VARIOUS OF IRISH PARLIAMENT
- Embargoed: 16th October 2010 13:00
- Location: Ireland
- Country: Ireland
- Topics: Finance
- Reuters ID: LVA4PW62O68A4U8L4C4R6QRUH1IQ
- Story Text: Ireland put a 34 billion euros price on bailing out stricken Anglo Irish Bank under a worst case scenario on Thursday (Sep 30) with the country's finance minister announcing that the government now had a "clear structural resolution of the Irish banking crisis".
Many on the streets of Dublin however poured scorn on their banks and expressed distaste with the size of the taxpayer commitment.
In a round of interviews on Thursday morning, Irish Finance Minister Brian Lenihan said the bank costs would be spread over more than 10 years, and that additional budgetary efforts were required to get the country's deficit below 3 percent of GDP by 2014.
European Union officials had pressed Dublin to come up with a detailed plan for getting its fiscal gap -- the worst in the bloc -- under control by 2014 Along with Anglo Irish Bank, Ireland's regulator said Allied Irish Banks and the building society Irish Nationwide also need additional capital.
Lenihan said he would raise support for Irish Nationwide to 5.4 billion euros from 2.7 billion. The government may take a majority stake in Allied Irish.
Lenihan told journalists at his centrepiece news conference on Thursday morning that Anglo Irish and Irish Nationwide would be downsized to prevent them becoming a financial threat to the state, saying: "two institutions will be downsized over time as we have discussed already; the two major banks (Allied Irish and Bank of Ireland) are now well-capitalised, purged of their toxic assets and in a position to move forward on a platform of growth."
Ireland's government under Prime Minister Brian Cowen has a wafer-thin majority in parliament and faces a discontented electorate, making it politically difficult to toughen what's expected to be an already harsh December budget, even while attempting to direct blame at the banks themselves.
"Well the Irish people are entitled to be angry with the bankers who lent recklessly over a considerable period of time in the earlier part of this decade," Lenihan said. "It's clear that these losses were installed in our banking system and in some of the banks by the middle of the decade and it's clear that some of the banks have spent a considerable period of time trying to conceal the existence of these losses."
On the streets of Dublin, taxpayers derided the bank bailout package as "a fix", and "disgusting."
"Well I supposed something has to be done," added one man. "But it's hard to come to terms with those kind of figures."
- Copyright Holder: FILE REUTERS (CAN SELL)
- Copyright Notice: (c) Copyright Thomson Reuters 2011. Open For Restrictions - http://about.reuters.com/fulllegal.asp
- Usage Terms/Restrictions: None