As was indicated previously, the Irish Minister for Finance, Brian Lenihan, has confirmed the conditions under which a bail-out will be required
Minister for Finance Brian Lenihan has said that it is clear Ireland will need some sort of external assistance to address the problems in the banking sector.
Mr Lenihan said officials from the International Monetary Fund and the European Union were not in Dublin to direct Irish affairs, but to offer advice on the four-year budgetary plan and the banking sector.
Speaking on RTÉ’s Six-One News, he said he felt no sense of shame in fighting for the country’s interests.
“I certainly don’t feel a sense of shame about fighting hard for this country for the last two years to ensure its financial survival,” said Mr Lenihan.
“The big difficulty of course is that the banks grew to such a size that they became too unmanageable for the state itself; that’s the big difficulty here. And that’s why we have to consider external assistance to stabilise our banking system.”
Btw, everyone’s hero, Robert Peston, has a new hero
The reason is that Mr Honohan is refreshingly frank. He is the antithesis of the buttoned up, central bankers that are typical of his secretive and rarefied trade.
My favourite moment was when he was asked whether the Irish central bank has given super-special emergency loans to Irish banks that have been unable to obtain funding from the markets and from the European Central Bank’s emergency liquidity facility.
This is what he said:
“All I’ll say is there has been such a need, but I don’t really want you to press me on that, because I’m not allowed to talk about these things on a current basis. Of course I’d have to make sure…just in case it would sound as if I’m exceeding my powers, I would have to make sure that the other members of the ECB, the governing council, don’t object to making these loans“.
So that would be a yes then. Which means that however much it has been obvious that Irish banks are finding it almost impossible to raise finance from commercial sources, the reality is probably worse,