More questions on bank bailout
THE Governor of the Central Bank neatly encapsulated the Government's central dilemma when he spoke yesterday of countries' needs to convince financial markets about their determination and ability to cut their budget deficits and, in almost the same breath, indicated that the cost of rescuing Irish Nationwide is likely to rise to around €3.2bn.
Unease about Ireland's banking problems is a major reason for the high cost of our borrowings, although there was some relief yesterday when the National Treasury Management Agency's monthly bond auction showed a still healthy appetite for Irish government bonds.
The biggest question mark hangs over Anglo Irish Bank. Will the Government have to inject the €25bn already indicated, or will the bill be even higher? It is a question the Government is unable to answer for the time being, but the revised figure for Irish Nationwide, although relatively small, will not help soothe the markets.