FG applauds Anglo wind-up moves

FINE Gael last night welcomed moves that could see Anglo Irish Bank wound up over the next 20 years.

That would be done at a loss of €22 billion to the taxpayer.

Such a move represents a significant shift in the Government’s banking policy.

It has emerged that the European Commission is becoming dubious about the good bank, bad bank plan proposed by Anglo Irish management and has already privately indicated that no more money should be pumped into the troubled lender.

Finance Minister Brian Lenihan, who previously insisted that Anglo was systemic to the Irish banking system and should not be wound down, accepted in the Dáil in the past few days that winding down Anglo Irish over the long term could be an option.

Fine Gael senator Eugene Regan, a strong critic of the Government’s Anglo Irish policy, last night welcomed “the European Commission’s increased role in efforts to correct the Government’s flawed and expensive plans for Anglo”.

“I hope that the commission’s intervention will finally set the Government straight in its disastrous plans for Anglo,” he said.

Fine Gael and its finance spokesman Richard Bruton have long argued that Anglo should be wound down.

“From my discussions with the European Commission in Brussels on January 25, I am not surprised that it is calling for the orderly winding down of Anglo Irish Bank, a course of action I recommended to the Commission in my submissions,” he said.

In response to opposition questioning in the Dáil on Thursday, the Tánaiste Mary Coughlan still insisted that Government policy on Anglo Irish Bank had not changed.

It is understood that Anglo’s new bosses still believe that a good bank, bad bank is the way to deal with the bank.

Alan Dukes, Anglo’s chairman designate, said he believes the bank had a future role to play in a restructured Irish banking system.

One of the difficulties confronting the Government over Anglo is that a move to wind down the bank could result in massive withdrawal of deposits which could put added pressure on the national finances.