THE Government has insisted it is “united” in its determination to resolve the Anglo Irish Bank issue and that no rifts exist between Fianna Fáil and Green ministers.
It follows days of damaging speculation about the final cost of the Anglo bailout to taxpayers and its effect on the Exchequer.
The issue was top of the agenda as Cabinet ministers met for the first time yesterday following the summer recess.
The Greens had indicated ahead of the meeting that they wanted a speedier wind-down of Anglo than originally envisaged by the Department of Finance.
That led to suggestions of a rift between the coalition parties, but the Cabinet sought to present a united front following the meeting.
In a statement, it said: “The Government is united in its determination in relation to the resolution of the Anglo Irish Bank issue: that it must be done at the least practicable cost to the taxpayer and in a way that gives finality.
“The Government is working with the EU authorities to that end; it is also in active discussion with the EU Commission about the future of the bank guarantee.”
Inclusion of the word “finality” in the statement led to further speculation that the Government would seek to wind-down Anglo fully rather than split it into the “good bank” and “bad bank” envisaged by the troubled institution’s management.
But the Department of Finance last night said “finality” referred only to determining the solution to the issue and putting a final cost on the bill to taxpayers.
The department has sent documentation to the European Commission outlining the various options for the bank, and is awaiting a response.
“The EU Commission and the Irish Government are considering different options. There is no final decision,” a department spokesman insisted.
“The documentation sent by the Department of Finance (on Monday) further develops issues arising from the detailed discussions between the EU and the Irish authorities.”
The Commission will effectively have final say on what happens to the bank.
Finance Minister Brian Lenihan expects to have discussions on the issue when he attends a meeting of his European counterparts in Brussels on Monday and Tuesday.
Mr Lenihan admitted that the Government was concerned about the fact that Anglo continues to drag down international confidence in Ireland’s ability to shoulder the bank bailout.
“We’re all concerned as a Government at any threats to Ireland’s fiscal position, we’re all concerned in Government about the appalling loss which the march of events in Anglo has inflicted on the state, and our common purpose is to reduce that cost to the taxpayer as much as possible,” he said.
The Cabinet also discussed the latest Live Register figures at the meeting. But a Government spokesman said the budget did not feature, as the Department of Finance was instead continuing discussions with individual departments about how best to cut spending by €3bn in December.
- Anglo: the longer the bank’s future remains unclear, the more uncertainty internationally about Ireland’s own future. The Government has been keen to suggest the final bill to taxpayers will be contained at €25bn – but is having immense difficulty convincing the money markets of this. As a result, speculation about whether the Exchequer can bear the Anglo load is increasing. The Government needs the European Commission to give its verdict on the plans for Anglo, so that its future – or lack of it – can be spelled out.
- The Budget: To meet commitments to Brussels, it must cut spending by a further €3bn in the Budget. An estimated €1bn will be taken out of the capital budget – spending on infrastructure projects such as hospitals, schools and roads. The remaining €2bn will have to come from further cutting day-to-day services or increasing taxes.
- Unemployment: Dole queues continue to grow, and the Government seems bereft of a plan. Taoiseach Brian Cowen said earlier this year that reducing costs and increasing exports represented the only way back for the economy. In other words, economic recovery first, jobs second. It was an honest assessment but one that has led to much criticism. “No plan, no initiative, no leadership” was how the Irish Small and Medium Enterprises Association summed up the Government’s response to the unemployment crisis yesterday.
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