Dukes: €35bn fund for banks may not be enough

Anglo Irish Bank chairman Alan Dukes has said he believes that the €35bn bailout fund for Ireland's banks from the EU/IMF rescue package may not be enough.

Mr Dukes' weekend comments have led to calls on the Government to renegotiate the EU/IMF bailout deal, which earmarks a short-term injection of €10bn for the banks, with a €25bn contingency fund.

Mr Dukes told the International Herald Tribune newspaper that no assessment had been made of possible mortgage defaults, and the money available would not be enough.

“I reckon €35bn is not going to be enough," the former finance minister said.

“The number that’s there at the moment is based on what we can expect of the commercial property market.”

He added: “I don’t think any assessment has been made of the possible impact of mortgage defaults.”

He was speaking ahead of Wednesday’s Dáil vote on the rescue package, worth a total of €85bn, which Fine Gael is today expected to confirm it will oppose.

Parliamentary approval is not legally required for the bailout to go ahead, but the IMF has postponed approval of its €22.5bn until after the vote, and the board is expected to discuss it on Thursday.

The Labour party has described Mr Dukes' remarks as "the worst Christmas present imaginable".

Research Professor with the ESRI John Fitzgerald today said there are concerns.

"One of the concerns is that in the case of AIB and Bank of Ireland we've got to downsize the banks and sell bits off," Professor Fitzgerald said.

He however added that selling off part of the banks at the moment could add to costs as people no longer had faith in them.

"The plan had been to let them work their way out of this," he said.