BRUSSELS (MNI) – It is “very unlikely” that Ireland will need to
turn to the European Financial Stability Facility for help, the head of
the Eurogroup club of 16 Euro-sharing nations and Luxembourg’s Prime
Minister Jean-Claude Juncker said on Thursday.
The Irish government said earlier Thursday that troubled lender
Anglo Irish Bank is set to cost it E29.3 billion in total according to
its base case scenario but could cost E34.3 billion if additional losses
are incurred.
And it confirmed that the additional costs would mean the country’s
government would have to look again at its budget plans.
Asked about these figures, Juncker told reporters, “they are not
good.”
But he added that it was “very unlikely” that Ireland would have to
go to the E440 billion EFSF fund.
“I think the Irish government will be able to bring this to an end
without going under the umbrella,” he said.
European Commissioner for Economic and Monetary Affairs, Olli Rehn,
said he welcomed the Irish government’s statement on its banks.
“The Irish government is finding a convincing solution,” he said,
adding that “the costs are very large but manageable.”
Rehn said he “strongly” endorsed Irish finance minister Brian
Lenihan and that he expected the Irish government to unveil a
“multi-annual” four-year budget plan “shortly.”
Ireland’s banking system became deeply indebted after the Irish
property boom collapsed. Earlier this month, the government said it
would split Anglo Irish Bank in two and wind-down or sell off bits of
it.
So far the government has injected around E4 billion in cash to
Anglo Irish, with the rest of the money coming as promissory notes to be
paid down over an unspecified timeline.
–Brussels: 0032 487 (0) 32 803 665, echarlton@marketnews.com
[TOPICS: MT$$$$,M$$FX$,M$$EC$,M$X$$$,M$$CR$,MGX$$$]
