State set to become BoI majority stakeholder

THE Government is set to take a majority stake in Bank of Ireland as part of a projected €85 billion bailout of the banks, it was reported last night.

The development came as the bank’s share price tumbled further amid continuing fears about the weaknesses of the sector.

While not fully nationalising the bank, the Government will take a majority stake in the troubled financial institution, thereby further increasing State control of the sector, several sources were quoted as saying.

It came as the EU insisted the terms of the bailout, once agreed, could not be changed by an incoming Government.

Meanwhile, Taoiseach Brian Cowen’s position worsened as Fianna Fáil backbenchers vented their outrage at his handling of the IMF crisis, would-be successors vied for position, and EU chiefs intervened in Irish affairs to effectively stamp on Opposition demands for a pre-Christmas poll by insisting it was “essential” the budget was passed as soon as possible.

Mr Cowen refused “consensus” offers from Fine Gael and Labour to bring the December 7 budget forward as he faced open rebellion from within his party and Enda Kenny accused him of trying to “cling onto power” at any cost.

The Greens’ decision to collapse the Coalition once the budget process is over in the new year provoked bitter exchanges during yesterday’s tense Cabinet meeting.

FF ministers rounded on John Gormley and Eamon Ryan, according to Government sources. Tourism Minister Mary Hanafin was alone in voicing public criticism saying she did not believe the Greens had the best interests of the country at heart.

Ms Hanafin also moved to position herself to take over the helm of FF from Mr Cowen, stating she would enter a future leadership race while insisting she would not take part in a heave.

The blame game within Government over last week’s shambolic communications effort also intensified after the Taoiseach’s spokesman said Finance Minister Brian Lenihan’s department was responsible for handling the issue.

In a firm intervention in Irish affairs, the European Commission insisted the bailout contract being negotiated with the EU, European Central Bank and IMF would be binding on any new government as it will be an agreement with the State, not a specific administration.

Fine Gael and Labour had demanded a pre-Christmas poll so that a Government with a strong mandate could cut the deal with Europe and the IMF, but Mr Cowen indicated March was probably the earliest date for a general election — despite the Greens insisting they would force a January poll.

In what was interpreted by some as a “no budget, no bailout” warning, EU economics commissioner Olli Rehn said the bailout negotiations should be conducted next week and advised against delaying the December 7 budget.

And in an apparent bid to try to head-off the risk of Greek-style civil unrest on Irish streets, Mr Rehn emphasised at a meeting with MEPs that there should be greater emphasis on raising taxes than cutting social spending in the Government’s four-year plan.

Fine Gael leader Mr Kenny called on the Taoiseach to bring forward the budget to next week, with a “slimmed down” version of the Finance Bill to be put through the Oireachtas and facilitate an early poll.

Opposition leaders accepted the Taoiseach’s offer to meet with EU/IMF negotiation chiefs, which was seen by observers as an attempt by Mr Cowen to try to get their support in pushing through the budget.

More in this section

Puzzles logo
IE-logo

Puzzles hub

Visit our brain gym where you will find simple and cryptic crosswords, sudoku puzzles and much more. Updated at midnight every day.

Puzzles logo
IE-logo

Puzzles hub

Visit our brain gym where you will find simple and cryptic crosswords, sudoku puzzles and much more. Updated at midnight every day.