Irish Bank Funding Boosts Budget Deficit To 32% GDP

[muriel_volestrangler]

Source: Wall Street Journal

The Central Bank of Ireland announced early Thursday that the state-owned Anglo Irish Bank Corp., Ireland's most troubled financial institution, will need total capital of EUR29.3 billion and then an additional EUR5 billion in a "stress scenario."

The central bank also said Allied Irish Banks PLC (AIB) will need an additional EUR3 billion by year-end. It was originally charged with raising EUR7.4 billion in capital by the end of 2010. Lenihan said the state will become the majority shareholder in the bank.

Putting a so-called "final" price tag on the cost of bailing out Ireland's diseased banking system is aimed at clearing a major black cloud hanging over the Irish economy. Anglo Irish previously indicated it would cost around EUR25 billion to restructure the bank.

The soaring costs of supporting the Irish banking system will cause the government's budget deficit to rise to 32% of gross domestic product this year, Finance Minister Brian Lenihan said in a statement Thursday.

Read more: http://online.wsj.com/article/BT-CO-20100930-703107.html

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That's compared to Greece's deficit this year of about 13%, or Iceland's at 16%. It's about $9,000 per person in Ireland.

[Warren Stupidity]

1. The background story here is one of abject corruption

between the ruling party and the swell fellows who own this bank. The 'rescue' has drained the irish treasury and is now threatening to push Ireland into insolvency. The bank itself was involved in a spread of development schemes of highly dubious merit and should have simply been allowed to fail, however as the ruling party intended to keep its positive cash flow of 'political contributions' from those same developers, the public was put on the hook for keeping it afloat.

[1776Forever]

2. Interesting information - Again Politicians saving their own asses - To H to their constituents! Sad...

Definitely what will happen if the GOP takes over here!

VOTE!