FINANCE Minister Brian Lenihan has conceded that a more precise calculation on the cost of the Anglo Irish Bank rescue package will have to be worked out for once and for all to restore confidence among international investors.
“We have to bring closure to this matter in a matter of weeks,” he said.
Mr Lenihan was speaking after Anglo published its six months accounts which, as expected, showed it had lost €8.2 billion in the first half of this year.
The total cost of guaranteeing and nationalising Anglo is now estimated to lie somewhere between €22bn and €35bn.
Fine Gael’s finance spokesman, Michael Noonan, said such a wide difference in the potential liability for Irish taxpayers could not be allowed to stand.
And he said the minister should come out with a more definitive figure and let taxpayers know the size of the hole that they will be expected to fill.
He said there was too much confusion between definitions of the exposure and when everything was factored in, the €35bn sum recently suggested by the ratings agency Standard & Poor’s was feasible.
“Even though the exact total figure is very important, to give certainty to the markets is even more important. There is an obligation now on Brian Lenihan to give exact figures so the markets know what the total liability of the Irish taxpayer will be.
“The problem is that most people investing in the bond markets and investing in Irish bonds and Anglo Irish bonds are not particularly interested in a big discussion about Ireland. They get the line from two sentences from Bloomberg in the morning.
“So long explanations won’t do. What the minister has to come out with is a figure that gives certainty to the markets,” he said.
Shortly afterwards Mr Lenihan said the final amount would depend on whether the European Commission gives the go-ahead for the rescue plan tabled for Anglo. This was sent to Brussels yesterday.
The minister did not indicate the measures it asked the Commission to approve. But he agreed the guessing game could not continue.
“I agree with, and I very much welcome, what Michael Noonan said that we must bring finality and certainty to that figure and that is part of this exercise we are doing with the European Commission,” he said.
The Labour party’s finance spokeswoman Joan Burton said the constant marking up of the bill for saving Anglo was casting doubts on the ability of the country to even estimate the extent of the problem it has to solve.
“The strategy of Brian Cowen and Brian Lenihan of drip-feeding the bad news on Anglo is a strategy which is undermining Ireland’s capacity to regain credibility in the international financial markets.
“It is undoing all the cuts and sacrifices endured by the Irish people to reduce the budget deficit... The result of this will be that in every budget for years to come the cost of borrowing will remain crippling high simply to bail out Anglo and the Irish banking system,” she said.
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