Pressure mounts on Lenihan to wind down Anglo as Greens waver
Published 30/08/2010 | 05:00
Pressure is mounting on the Department of Finance to review its plans for the future of Anglo Irish Bank after it emerged Brussels is becoming increasingly sceptical of its proposal to carve a 'good bank' from the nationalised lender.
The news came as the Green Party shifted its stance on the future of the bank, saying Ministers John Gormley and Eamon Ryan were now of the "same mind" as party chairman Dan Boyle and were "leaning towards" the position that winding down Anglo might be the cheapest option.
"We've long said we will pursue what is the cheapest option for the taxpayer," a spokesman for the Green Party said.
No formal position has been reached within the party as no formal discussion has taken place.
But the party is "leaning towards" the argument that a winding-down of the bank may work out cheaper.
"It's becoming more likely that would be a cheaper option," the spokesman added. "We are moving in that direction."
Anglo submitted its restructuring plan to the European Commission on May 31 and is still awaiting approval.
Discussions between the finance department and EU officials on Anglo's future are said to be ongoing with a final decision expected "within weeks".
The current plan proposes dividing Anglo into a 'good' and 'bad' bank with the good unit taking assets worth between €10bn and €15bn and reinventing itself as a small business lender.
The rising cost of rescuing Anglo was partly responsible for a surge in Irish bond yields last week with interest rates reaching highs of 5.9pc last Friday.
The sharp rise in yields again prompted calls from opposition parties for the orderly wind-down of the bank.
Labour's Joan Burton said the Green Party's comments showed the Government itself was in "some confusion" about where its banking strategy now rests.
This confusion between Fianna Fail and the Greens is damaging Ireland's credibility, she said.
"Many people in both government parties now share the widespread view that Anglo is unsustainable but the Taoiseach and Finance Minister are sticking by their original analysis," she said.
Fine Gael's finance spokesman Michael Noonan said the government should use the imminent second anniversary of the bank guarantee scheme to re-examine its plans to rescue and restructure Anglo Irish Bank.
In a dig at the Greens, Mr Noonan said they were "wrong about most issues" but they may be right on Anglo Irish Bank.
When Mr Lenihan first proposed nationalising Anglo Irish Bank in January 2009, he estimated the rescue at €4.5bn.
Those estimates have now risen to €25bn, while Standard and Poor's have put the final cost at €35bn.