Green minister fears Greek-style crisis if banks don't get houses in order 'fast'
Ireland could be plunged into a Greek-style crisis unless the banks get their house in order "quickly''. That's the stark warning issued by the Communications, Energy and Natural Resources Minister Eamon Ryan yesterday.
"The final bill for everything, that is all the madness in mortgages, the developers and general finance could be as high as €34bn," he warned.
"We have done a job in projecting the Government's ability to manage its own finances. Now we have to convince the outside world that the banks have the capacity to manage their own finances," he said.
Mr Ryan also noted that within Government, the view was "the sooner we do it the better''.
Referring to the improved image of Ireland in the international community, he said of the banking crisis: "We have a limited window of opportunity to resolve this now. If we miss this opportunity it could be decisive."
In a chilling warning, he also noted that "the more honest the banks are, the better. If they try to cover it up and cod people, the markets will read through that -- look at Greece".
But in a tough warning for taxpayers, he said: "Banks are going to require a lot of capital. It is a woeful legacy from woeful mismanagement''.
But Mr Ryan has warned the banks that when it comes to raising capital "they are going to have to sell assets''.
However, he refused to rule out a raid on the State's much- depleted National Pensions Reserve Fund.
And he also reiterated his warning that there will have to be a fundamental reform of how the banks deal with mortgage arrears.
"The vast majority of mortgage defaults occur because of lost income and trends in unemployment." He noted that within the current situation "continuing the old Dickensian courts route and playing by the existing rules is not very clever''.
However, when it comes to the putative €34bn final costs, some believe that even Mr Ryan is being optimistic.