Lenihan won't estimate final cost of the bailout
Published 01/09/2010 | 05:00
FINANCE Minister Brian Lenihan last night refused to put a final figure on the cost of bailing out Anglo Irish Bank.
But he rejected the estimate from Standard and Poor's (S&P) that it could cost taxpayers €35bn. The minister claimed that S&P had made "basic errors" when it downgraded Ireland last week.
Anglo itself claims that the rescue bill will come to €25bn.
The Government will now bring "certainty and finality" to the issue in the coming weeks, Mr Lenihan said.
He said S&P, like other rating agencies, had made "wrong assessments" in the past and that it was wrong to attribute no value to the assets of NAMA.
His comments came as Anglo Irish Bank reported losses yesterday of €8.2bn for the first six months of the year -- double the €4.1bn losses for the same period last year.
But Mr Lenihan said these figures were in line with the bank's own expectations and wouldn't require the Government to amend any of the figures already in the public arena.
"That doesn't mean they're not serious losses, horrendous losses for any bank," he said.
With discussions in Brussels at an "advanced stage" on what to do with Anglo, Mr Lenihan said a number of options were currently being evaluated.
Anglo's bosses want to divide it into a 'good' bank and a 'bad' bank, with the good unit taking assets worth between €10bn and €15bn and reinventing itself as a small business lender.
The other option is to wind-down the institution over a "very long period of time", Mr Lenihan said. This, however, is at odds with the Green Party, which has changed its position and is arguing for a faster wind-down over four to five years.
Mr Lenihan said he too wanted to minimise the loss to the taxpayer. However, he insisted that a very rapid wind-up would expose the taxpayer to a "very substantial" cost and that this option was not on the table.
But Fine Gael's finance spokesman Michael Noonan urged the minister to abandon his "misguided" policy of bailing out Anglo. Up to €6bn of taxpayers' money could still be saved if the minister began an orderly wind-down, he said.
Labour's Joan Burton said: "These figures represent only the first six months of 2010 and we can expect more grim news when results are published for the second half of the year."