How much worse can it get?

Brian Cowen, the Taoiseach, says we have no choice but to hand over the cash. "Anglo Irish Bank is a bank of systemic importance... this economy could not withstand the failure of a bank of that magnitude and the consequent impact that would have on other banks and the financial system. You just could not even contemplate it."

But that is precisely what he should be contemplating.

Anglo Irish is a dead bank walking. It has no future as a going concern. Anglo must be wound down, not supported indefinitely on a life support scheme funded by our taxes and yet more borrowings.

The pain of that wind-down must not be taken exclusively by the Irish people. The Government must discover the courage to confront Anglo's problems head-on, negotiating aggressively with its bond-holders so that they, too, pay part of the price of the bank's failure.

Depositors will be protected by the State guarantee, but any individual or institution who invested in the bank's debt must be forced to accept that all investments carry the risk of failure.

The wind-down will not be speedy, but it must be certain. The Government will argue that it cannot announce publicly that it is winding down the bank, because a public announcement would encourage a flight of deposits and it would have to find the money to pay them.

Mr Cowen and his Government are asking the people to accept on faith that their strategy for Anglo Irish is the only strategy available, but neither Mr Cowen nor his Government enjoy the people's faith. That was lost many months ago when the Government failed to respond to the economic disaster that was unfolding before it, and tried instead to tell the people that the economic fundamentals were sound.

It has been economic with the truth, too, on the banking crisis, and it has been slow -- unforgivably slow -- in extracting the real information about the state of the banks' loans. Only now do we discover that 20 per cent of Anglo's Irish loans are "impaired" -- meaning that no interest payments are being made -- and almost €30bn of loans are either in trouble or about to be in trouble.

How can we know where this litany of disaster ends? And how much more money does the Government propose throwing at Anglo Irish?

This rogue bank is not of systemic importance, but the scale of its mismanagement has reached a point where it poses a real threat to our financial system. Anglo Irish has no future, and will not emerge intact from nationalisation. An orderly wind-down represents the best option to protect the interests of the State and the taxpayers.