07 SEP 2010
By Leigh Phillips
EUOBSERVER / BRUSSELS - Ireland's finance minister, Brian Lenihan, in Brussels for discussions with the European Commission over the bail-out of nationalised Anglo Irish Bank, whose costs are ballooning, insisted the debt black hole at the heart of the company will not bankrupt the government.
The bank has recently announced that it will probably need some €25 billion in fresh capital, equivalent to a full 19 percent of the country's GNP. Credit rating agency Standard & Poor's has said that it believes this to be low-balling the true figure, estimating that the real cost could come to €35 billion.
The vast sums have frightened markets, which worry Dublin will have trouble paying its debt.
Finance minister Brian Lenihan met with competition commissioner Joaquin Almunia on Monday (6 September) to discuss options for the bank, which recently posted the largest loss in Irish corporate history.
According to domestic media reports, before heading to Brussels on Monday, Mr Lenihan stressed that it is "simply not the case" the bail-out could bankrupt the state and that the debts that have effectively transferred from private hands to the public were "infuriating but manageable."
"Management have put forward a case that if the bank were allowed to engage in lending, it might reduce the cost to the taxpayer further," he said.