Belfast Telegraph

Anglo Irish bailout set to cost Irish taxpayer €35bn

By Aine Kerr

The Republic's Finance Minister Brian Lenihan last night refused to put a final figure on the cost of bailing out Anglo Irish Bank.

But he rejected the estimate from Standards and Poor (S&P) that it could cost taxpayers €35bn (£28.8bn) and promised to bring "final closure" to Anglo Irish Bank's costs within a matter of weeks.

The minister claimed S&P had made "basic errors" when downgrading Ireland last week and estimating the final cost of the state-owned bank at €35bn. The bank itself claims the rescue bill will come to €25bn (£20.6bn).

The Irish government will now bring "certainty and finality" to the issue of Anglo Irish Bank in the coming weeks, said Mr Lenihan.

The rating agency S&P, like other agencies, had made "wrong assessments" in the past "which led to us having institutions such as Anglo Irish Bank", he added.

"Some rating agencies are over compensating by being too cautious in a period of economic decline. I didn't accept the Standards and Poor rating, although I will always treat the views of rating agencies with great respect," he said.

The minister said it was wrong to attribute no value to the assets of 'bad bank' NAMA.

His comments came as Anglo Irish Bank yesterday reported losses of €8.2bn (£6.8bn) for the first six months of the year - a figure in excess of last year's €4.1bn (£3.4bn) losses for the same period. But Mr Lenihan said these figures were in line with the bank's own expectations and won't require the Irish government to change any of the figures already in the public arena.

"That doesn't mean they're not serious losses, horrendous losses, for any bank to incur," he said.

With discussions in Brussels at an "advanced stage" on what to do with Anglo Irish Bank, Mr Lenihan said a number of options are being evaluated.

Final documentation was sent by the Department of Finance to the European Commission yesterday. The governor of the Central Bank is in contact with the European Central Bank, while Mr Lenihan is in touch with the European Commission.

Bank bosses want to divide Anglo into a 'good' and 'bad' bank with the good unit taking assets and reinventing itself as a small business lender. The other option is to wind-down the institution over a very long period of time.

Weekly Business Digest Newsletter

This week's business news headlines, directly to your inbox every Tuesday.

Popular