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Irish bailout: Package calls for extra 50bn to assist banks
Date 07/03/2011 11:32  Author webmaster  Hits 979  Language Global
07 MAR 2011

By Laura Noonan | Irish Independent

THE new Government's banking reform package calls for an extra €50bn in support for the banks -- but makes no mention of where this money will come from.

In the plan, Fine Gael and Labour say they will "seek to replace emergency lending" to Ireland's banks with "medium term, affordable, official financing".

The level of emergency lending to Ireland's banks is currently running at about €50bn -- ultimately provided by the European Central Bank when Ireland's banks pawn assets.

The source of replacement cash for that €50bn is not specified in the Programme for Government.

Fine Gael -- which will hold the finance ministry -- last night did not return calls seeking clarification on the issue.

The bailout does include a €25bn "contingency" fund earmarked for future unexpected losses at the banks but could be redirected.

The new banking programme also includes several elements that can only be carried out if the new Government can convince the European authorities and the IMF to overturn measures already agreed under the bailout.

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