Thursday

22nd Feb 2024

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.

Read and decide

Join EUobserver today

Get the EU news that really matters

Instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

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.

EU's €723bn Covid recovery fund saw growth, but doubts remain

The €723bn Covid-19 recovery fund, launched three years ago, has been a success, according to a mid-term internal review — but less effective than initially predicted. And according to one NGO, the commission painted an "overly positive picture".

France's Le Maire 'goes German' with austerity budget

The French government announced €10bn in further spending cuts. However, defence spending is set to increase significantly, up to €413bn from €295bn, while €400m was cut from a fund meant for renovating schools, carpooling infrastructure, and other environmental projects.

Opinion

'Crying wolf' win for chemicals lobby at Antwerp EU meeting

EU politicians will cosy up with Big Toxics at a secretive event on Tuesday to discuss a new 'European Industrial Deal' — a blatant showcase of corporate capture and an attempt to shift the political agenda in a profit-minded direction.

France's Le Maire 'goes German' with austerity budget

The French government announced €10bn in further spending cuts. However, defence spending is set to increase significantly, up to €413bn from €295bn, while €400m was cut from a fund meant for renovating schools, carpooling infrastructure, and other environmental projects.

Latest News

  1. EU auditors: rule-of-law budget protections only partial success
  2. EU's €723bn Covid recovery fund saw growth, but doubts remain
  3. Von der Leyen rejects extremist parties, leaves door open to ECR
  4. Russian oligarchs failed to get off EU blacklist
  5. Podcast: Navalny, Ian Bremmer and "more Europe"
  6. Only Palestinians paying thousands of dollars leave Gaza
  7. Ukraine refugees want to return home — but how?
  8. African leaders unveil continent-wide plan to buy medicines

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Join EUobserver

EU news that matters

Join us