Final cost of Anglo Announced

No more bond auctions until 2011.



FG said negotiations should've been conducted with senior bond-holders. Gov say senior bond-holders have same position in law as depositors.


General Gov Deficit for 2010 is 32% of GDP. (High this year because of recapitalisation but will not be as high next year). But Stability and Growth Pact demands deficit to be 3% of GDP by 2014. Capital support for the banks is 20% of that.

Taoiseach said in Dáil yesterday it will only cost 1.5bn euro annually to service the cost of recapitalisation (of c.30bn he estimated, before accurate figure announced)

3bn euro adjustment for 2011 budget is absolute minimum - Min Lenihan says more will be needed.

NAMA/EC Commission/Gov - decision:
if you have a loan with AIB or BOI less than 20million, you will not be transferred to NAMA. Threshold previously was 5million.

Min Lenihan said: there remain 650 debtors between 5-20million loans in AIB/BOI. These will now be dealt with by banks themselves.
- They account for 6.6bn of 80bn

-> Therefore, if this new rule was not applied, it's arguable the recapitalisation would be bigger still

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Gov are to announce a 4-year budgetary strategy in November. (Likely to outline how to bring deficit down to 3% of GDP