Bruton Proven Right on Banks

The €21 billion extra cost of the Anglo / Irish Nationwide bailout will cost €2 billion in cuts every year for 10 years. This is the equivalent of an extra 10% on the top tax rate over that period.

Putting last years €4 billion for Anglo into the General Government Deficit has forced the government to be real. This is money down the drain and finally brings into stark relief the error in the government’s bank policy.

This week, I think that Alan Dukes and Dr Garret Fitzgerald should be saluting Richard Bruton for being correct over NAMA and the government bail out policy. But I suppose that is too much to expect.

Bruton suggests breaking up Anglo before September before the guarantee expires and moving ordinary depositors and institutional depositors into a good bank and leaving the rest in a residual asset management company which should be given to bond holders, professional investors and creditors to wind down over a period and rescue what they can for themselves on the basis that they themselves made the investments and took the risks not the Irish public.

The Fine Gael National Recovery bank is now clearly a policy platform whose time has come. Invest public money only where there is a likelihood of a return.

I believe that the Eurostat redesignation of Irish budget deficits will sound a claxon in the bond markets and we are in serious trouble. This will take some time to unravel because as the National Treasury Management Agency has looked after us for most of this year already.

This one policy that Fine Gael has got right.