Ireland:Government nationalises Anglo Irish Bank-Plan to inject €1.5bn into the bank dropped
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The Government has announced plans to take complete control of Anglo Irish Bank, saying its previous plan to inject money into the bank is not the best way to secure its viability....
The Government had planned to inject €1.5bn into the bank, taking 75% of the voting rights in the process...The bank will continue to operate as normal and depositors and creditors should continue to transact as normal.. The Government statement said shareholders' rights would be respected, and that legislation will outline plans for compensation.(RTE)
Fine Gael has issued the following statement:
Anglo U-turn the Correct Decision but Latest in Long Line of Climb downs
The Government have been forced to abandon their own recapitalisation plan for Anglo Irish Bank and have directly adopted the plan set out by Fine Gael in this regard just yesterday, according to Fine Gael Deputy Leader Richard Bruton T.D. He was speaking after the Government announced the nationalisation of Anglo Irish Bank this evening.
"In December Fine Gael said it was not appropriate for the Government to pour taxpayers' money in to a recapitalisation plan for Anglo Irish Bank, given the information that had emerged regarding Anglo's lending practises. We formed the view that the public were entitled to have trust and confidence in the banks that they were being asked to recapitalise. This trust and confidence was clearly not there for Anglo. The Government, however, regardless of the advice offered ploughed on with a plan to put €1.5bn of taxpayers' money in to Anglo.
"Tonight the Government have finally been forced in to recognising their mistaken approach to this bank. They have adopted the plans set out by Enda Kenny yesterday in relation to Anglo Irish Bank, the latest Fine Gael proposal that they have been forced in to adopting. The handling of this issue confirms, once again, that the Government are all at sea on economic policy and are lurching from one u-turn to the next. First it was the multiple u-turns on the Budget, then the requirement for recapitalisation of Irish banks, then the idea of a pay freeze, and then finally their u-turn on Anglo Irish Bank's entitlement to be included in the recapitalisation programme.
"This latest of u-turns, while the correct decision that will help protect the viability of the remaining banks, does not bode well for the steady and assured management of the economy in the future. Finally, the Government needs to clarify if today's announcement has the effect of extending the State guarantee to any additional liabilities of the bank, including the owners of €2bn in perpetual preference shares."
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