Anglo Irish failure would 'bring down' Ireland: minister

30th September 2010, Comments 0 comments

Ireland's finance minister has warned the failure of Anglo Irish Bank would "bring down" the country, as regulators prepared to reveal Thursday the cost of bailing out the stricken lender.

Brian Lenihan also pledged to stand behind the bank which will reportedly cost the state some 30 billion euros (41 billion dollars) to rescue, in comments to the Financial Times newspaper.

"Any Anglo failure would bring down the sovereign," the finance minister was quoted as saying in the FT.

"It is systemically important not because of any intrinsic merit in the bank. But because of its size relative to the national balance sheet.

"No country could contemplate the failure of such an institution."

Ireland will disclose Thursday the total cost of the state bailout of Anglo Irish. The Irish Times, without citing its source, has reported the cost could rise above 30 billion euros under a worst case scenario.

That would equal around one fifth of Ireland's total annual economic output, at a time when the eurozone member nation is struggling to cut a huge public deficit sparked by the global financial crisis.

Lenihan stressed that Ireland's financial health was better than other peripheral eurozone economies, saying it had borrowing already lined up to service debts and cover public services until the middle of 2011.

Ireland had a 24-billion-euro sovereign wealth fund and "a cash pile" of more than 20 billion euros, the minister said.

"We are not obliged to go to the markets. We are not under a clear and present constraint," Lenihan was quoted as saying in the FT.

The Irish government has previously rejected speculation that it could have difficulty raising funds and might have to seek help from a huge EU rescue fund set up after the Greek debt crisis earlier this year.

© 2010 AFP

0 Comments To This Article