Taxpayers bear brunt of bailout
YESTERDAY Brian Lenihan set the scene -- or tried to set the scene -- for today's announcements on the collapse of the Irish banking system and the construction industry. The decisions of which we learn today will be of historic importance, and the sums involved breathtaking.
The political and financial worlds expect the minister to announce a further injection of capital into the banks, in return for which the State will take a majority stake in AIB and something less than a majority stake in the Bank of Ireland. The cost of the bank rescue has been estimated at €16bn, but some believe that it could exceed €20bn.
To put the latter figure in context, the Labour Finance spokesperson, Joan Burton, points out that it equates to a series of four national budgets with severe cuts and other painful measures, as well as gloomy implications for the real economy.