Ireland unveils deal to slash bank bailout costs

Finance Minister Michael Noonan defended the exceptional haste as necessary given the risk that private creditors of IBRC would file lawsuits Thursday seeking control of their properties.

Noonan said that shutting IBRC would "come as quite a shock" to the bank's 800 employees, who immediately lost their jobs. But he said the government had no choice after its plans, drafted months ago, were leaked to international news agencies Wednesday.

"Did you ever hear of a liquidation that was announced one day and not implemented for several days or weeks?" Noonan told lawmakers, many of whom were given just minutes to read the nearly 60-page bill. "Creditors will line up to strip the company of everything they can lay their hands on, and debtors will not pay a penny because they know the company is going into liquidation."

The deal removed a threat to the stability of Kenny's coalition government. Lawmakers in the smaller party in the coalition, Labour, had threatened to withdraw support if Ireland made the next (EURO)3.06 billion ($4.1 billion) payment due next month, given the country has been raising taxes and slashing spending since 2009 and faces the imposition this year of deeply unpopular new taxes on property and water.

Under terms of the 2010 rescue plan, Ireland was to pay (EURO)3.06 billion annually through 2023 and smaller amounts through 2031 to cover the costs of repaying the global bondholders of Anglo and Irish Nationwide. The total cost of that agreement including interest is (EURO)48 billion ($65 billion) - or more than (EURO)10,000 ($14,000) for every man, woman and child in Ireland.

The Associated Press


