Taoiseach Brian Cowen has denied a Fine Gael claim that up to €6 billion will be announced in today’s Budget to further “bail out” Anglo Irish Bank.
But Mr Cowen said the recapitalisation of Anglo-Irish Bank “and the investments taxpayers have made in other covered institutions” were clearly separate “from the budgetary statement to be made to the House by the Minister today”.
Fine Gael leader Enda Kenny asked during leaders’ questions in the Dáil if there would be a further “€6,000 million for the further recapitalisation of Anglo Irish Bank which of itself will wipe out at one stroke the impact of all the cuts that are going to be presented by the Minister for Finance today”.
He said borrowing for 2009 of €26 billion already “included a figure of € 4 billion for Anglo-Irish bank. This is real money from the taxpayer’s pocket.”
In a clearer response later to Labour leader Eamon Gilmore, Mr Cowen said he had been asked whether there was any prospect of any future recapitalisation of the banks being incorporate into the budget statement today. “The answer to that is no”.
Mr Gilmore said that, so far this year, €4 billion had been paid to Anglo Irish Bank, and €3.5 billion to Bank of Ireland and AIB respectively. “And that is before we come to Nama,’’ he added.
There were sharp exchanges between Mr Gilmore and Mr Cowen when the Labour leader accused the Government of being responsible for the tough budget later in the day.
“The reason is that you and your party and your friends, the developers, and your friends, the bankers, have ruined this economy,’’ he added.
Accusing Mr Gilmore of engaging in “political rhetoric’’, the Taoiseach said that every developed country in the world was facing a very difficult financial crisis.
“We have a divided opposition, who, on the one hand, claim that there should be no cuts in services and welfare, no cuts here no cuts there, but at the same time suggest that we are going to tax our way out of this problem by imposing further impositions on labour and companies,’" he added. "That won’t maintain jobs; that will destroy jobs."
Fine Gael deputy finance spokesman Kieran O’Donnell said the Government’s expected borrowing for 2010 takes no account of the fact that Anglo Irish Bank will need to be recapitalised to the tune of €6 billion next year.
"The Taoiseach confirmed to Enda Kenny in Leader’s Questions that future recapitalisation monies for Anglo, predicted by Brian Lenihan and estimated by commentators at up to €6 billion for next year, are not required or reflected in the borrowing requirement figures for 2010,” Mr O'Donnell said.
“That means that all the pain due to be inflicted on ordinary members of the public in the Budget will be wiped out, and then some, as the Government pours hard-earned taxpayers’ money into the failed Anglo Irish Bank," he said.
“This appalling waste of taxpayers’ money should be stopped. And as Fine Gael has been advocating for a lengthy period, Anglo Irish Bank should be wound down in an orderly fashion, saving an estimated €3 billion in the process," he added.
“The Taoiseach was also factually incorrect in the Dáil when he stated that recapitalisation monies for banks in 2010 will not affect the Exchequer borrowing requirement. The monies used to recapitalise the banks in 2009 were represented and recorded as part of the borrowing requirement for last year.”