Anglo cash injection approved by Brussels
The European Commission today cleared the way for the Government to pump another €10bn into nationalised Anglo Irish Bank.
The rogue lender, put into state hands just over a year ago, is expected to announce the biggest corporate losses in Irish history of about €12bn as Brussels officials said the cash injection was needed for financial stability.
The Commission said it was investigating the total amount being pumped into the collapsed bank after €4bn of taxpayers' money was lodged last year.
Commission Vice-President for Competition Joaquin Almunia said the €2.7bn recapitalisation of building society Irish Nationwide had also been approved.
"There is no doubt that both Anglo Irish Bank and INBS (Irish Nationwide Building Society) need a significant recapitalisation to meet their obligations," he said.
"The measures are also necessary to preserve financial stability in Ireland.
"However, INBS needs to establish a viable restructuring plan and Anglo Irish Bank has to restructure profoundly in a way that effectively tackles the weaknesses of the past business model and ensures a sustainable future without continued State support."
It is estimated that Anglo's losses could run to €12bn for the 15 months to the end of 2009 with about €14bn of loans written off and losses being sold at half price to NAMA.
Full details are expected this afternoon.
Finance Minister Brian Lenihan revealed yesterday that NAMA will take €10bn of loans from Anglo in April paying 50pc of the book value.