Monday

23rd Apr 2018

Irish 'rage' after bank cheated on multi-billion bailout

  • Anglo-Irish collapsed with debts of €34 billion (Photo: William Murphy)

Irish leader Enda Kenny has said he understands "the rage and the anger" of Irish people on Monday (24 June) following a leak of taped conversations by two Anglo-Irish bank bosses which indicate the Irish government was conned into propping up the bankrupt lender.

The taped conversations, obtained by the Irish Independent newspaper, between John Bowe and Peter Fitzgerald, who led Anglo-Irish's capital markets and retail banking arms, respectively, indicate the Irish government was duped into pumping €7 billion of emergency cash into the bank on the assumption that it would plug the lender's funding crisis.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

But the €7 billion figure was just a ruse to get the government to put "some skin in the game," with the bankers assuming that politicians would have no choice but to provide further emergency funding once they had been "pulled in".

“That number is seven, but the reality is that actually we need more than that,” Bowe is recorded as saying.

"But you know the strategy here is you pull them in, you get them to write a big cheque and they have to keep, they have to support their money, you know,” he added.

On the same tapes, Bowe is heard apparently mimicking officials at Ireland’s Central Bank when they reacted to an initial request for a loan, saying: “There was a bit of, ‘Jesus that’s a lot of dosh... Jesus fucking hell'.”

He also claims officials reacted by saying: “‘Jesus, you’re kind of asking us to play ducks and drakes with the regulations’ and we said: ‘Yeah’.”

The phone conversations took place in September 2008, at the onset of the financial crisis following the collapse of Lehman Brothers.

But they come nearly two years before the true scale of Anglo-Irish's losses became clear.

Speaking on Monday (June 24) following the revelations, Prime Minister Enda Kenny said: “I understand the rage and the anger of so many people who have been affected by all of this.”

He added that the government would make a decision on a public inquiry into the collapse of Ireland’s banking system in “due course."

When the true scale of the bank crisis was revealed, Ireland was forced to negotiate a €67.5 billion eurozone bailout in autumn 2010.

Its decision to guarantee the liabilities of Anglo-Irish and the Bank of Ireland left it facing a €39 billion bill and a budget deficit of over 30 percent of GDP.

Under the terms of its debt deal, Ireland will repay the costs of the bank collapse over the next 10 years.

Following three years of budget cuts and recession, the Irish economy has is expected to grow by 1.1 percent in 2013.

Anglo-Irish bank has been renamed as the Irish Bank Resolution Corporation and is in the process of being wound down.

Analysis

Lessons from Ireland's failed bank guarantee

Five years after the failed Irish experiment of giving a blanket state guarantee for banks, the EU has more rules in place, but taxpayers' money is still on the line.

Macron and Merkel pledge euro reform

France and Germany have pledged to forge a joint position on euro reform by June, despite German reluctance on deeper monetary union.

News in Brief

  1. Merkel and Pena Nieto praise EU-Mexico trade agreement
  2. Nahles elected new leader of Germany's SPD
  3. Report: EU budget to refocus on South
  4. Audit office: Brexit 'divorce' bill could be billions higher
  5. MEPs urge better protection for journalists
  6. Dieselgate: MEPs back greater role for EU in car approvals
  7. European parliament adopts new organic farming rules
  8. EU granted protection to half million people in 2017

Stakeholders' Highlights

  1. Nordic Council of MinistersWorld's Energy Ministers to Meet in Oresund in May to Discuss Green Energy
  2. ILGA EuropeParabéns! Portugal Votes to Respect the Rights of Trans and Intersex People
  3. Mission of China to the EUJobs, Energy, Steel: Government Work Report Sets China's Targets
  4. Martens CentreJoin Us at NET@WORK2018 Featuring Debates on Migration, Foreign Policy, Populism & Disinformation
  5. European Jewish CongressKantor Center Annual Report on Antisemitism Worldwide - The Year the Mask Came Off
  6. UNICEFCalls for the Protection of Children in the Gaza Strip
  7. Mission of China to the EUForeign Minister Wang Yi Highlights Importance of China-EU Relations
  8. Nordic Council of MinistersImmigration and Integration in the Nordic Region - Getting the Facts Straight
  9. Macedonian Human Rights MovementMacedonians in Bulgaria Demand to End the Anti-Macedonian Name Negotiations
  10. Counter BalanceThe EIB Needs to Lead by Example on Tax Justice
  11. ILGA EuropeTrans People in Sweden to be Paid Compensation for Forced Sterilisation
  12. International Partnership for Human RightsThe Danger of Standing Up for Justice and Rights in Central Asia

Latest News

  1. 'Strong suspicion' of corruption in Council of Europe assembly
  2. France tightens immigration law, sparking division
  3. ECJ ruling set to end 10-year 'mouth tobacco' lobbying saga
  4. Whistleblowers, Syria and digital revolution This WEEK
  5. MEP friendship groups offer 'backdoor' for pariah regimes
  6. Macron and Merkel pledge euro reform
  7. Obscurity surrounds EU military fund's expert groups
  8. New EU party finance rules short circuit accountability