| 4.4°C Dublin

Britain propped up Irish economy with €16.5bn 'back-door' bailout

British taxpayers provided Ireland with a 'back-door' bailout of more than €16.5bn through their capitalisation of the Royal Bank of Scotland and Lloyds Banking Group, it can be revealed.

Accounts for the banks' Irish subsidiaries, Ulster Bank and Bank of Scotland (Ireland), show that one pound of every four injected by British taxpayers into the two banks ended up in the Irish economy.

Between 2009 and 2011, RBS made "capital contributions" totalling €9.13bn to Ulster Bank Ireland, while Lloyds transferred €6.41bn to Bank of Scotland (Ireland), before dissolving the business.

London analysts have estimated that RBS transferred another €2.3bn last year.

RBS and Lloyds used the funds to write off billions of euro of debt loaned to Irish commercial property developers and households in the Celtic Tiger boom years.

After the onset of the crash in 2008, Ireland ultimately fell into a €85bn bailout which included £7bn from Britain.

Together with the bank bailouts, the UK taxpayer has propped up the Irish economy with at least €23bn, which will renew pressure on Britain's Labour Party about how it handled the bailouts in 2008-2009. After the bubble burst, Ireland's banks brought the country to its knees and forced the government into a €67.5bn international rescue, including £7bn from London.

Since the financial crisis, the State has injected €80bn into its banks and nationalised or part-nationalised six of them.

Daily Digest Newsletter

Get ahead of the day with the morning headlines at 7.30am and Fionnán Sheahan's exclusive take on the day's news every afternoon, with our free daily newsletter.

This field is required


Most Watched





Privacy