Lenihan: Budget will be even more severe

Lenihan: Budget will be even more severe

Finance Minister Brian Lenihan has signalled an even more severe Budget than previously planned - saying the €3bn minimum cuts target will have to be increased.

Minister Lenihan's comments come after he revealed the final costs of bailing out the banks - saying we're at "rock bottom day".

Anglo needs €5bn, but in a worst case scenario it could require €10bn which would bring the taxpayer injection into the stricken lender to €34bn.

AIB is to be effectively nationalised with the State taking a majority stakeholding and pumping another €3bn into the bank - though it will be run on full commercial lines.

And Irish Nationwide also needs another €2.7bn.

Minister Lenihan is also to unveil a four-year budgetary plan in early November.

But the Finance Minister warned the cuts coming in December's Budget will now be increased.

Meanwhile the cost of the Anglo bailout has dominated Dail proceedings this morning, as expected.

Fine Gael leader Enda Kenny said the Government's banking strategy has failed.

"The banking strategy pursued by this Government and by Minister for Finance Brian Lenihan is now in shreds," Mr Kenny told the house.

"This banking strategy has closed Ireland off to the markets.

"The credibility of the Government, the credibility of the Taoiseach, and of the Minister for Finance - in respect of banking strategy - is now in tatters."

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