Government Announces Recapitalisation of AIB, Bank of Ireland and Anglo Irish Bank (Cost €5.5 billion)

From the Department of Finance

......In relation to Anglo Irish Bank, the Minister for Finance announces an initial investment of €1.5 billion of core tier 1 capital to assist in restructuring the bank’s capital. The Government will continue to reinforce the position of Anglo Irish Bank and will make further capital available if required so that it remains a sound and viable institution. The investment will be in the form of €1.5 billion of perpetual preference shares with a fixed annual dividend of 10%. The preference shares carry 75% of the voting rights of Anglo Irish Bank. The investment is subject to the approval of the ordinary shareholders at a general meeting which will be convened as soon as possible. On the basis of positive contact with the European Commission, the Minister said he was confident that the Anglo proposal will meet with EU State Aid requirements when formally notified in due course.

Good progress continues to be made in the capital discussions with other institutions. In particular, subject to shareholder and regulatory approval, the Government has agreed with Bank of Ireland and Allied Irish Banks plc that they will each issue €2bn of perpetual preference shares to the State with a fixed annual dividend of 8%. These shares will have voting rights in respect of change of control and any changes in the capital structure. They will also confer 25% of the voting rights in respect of appointments of directors and 25% of the directors on the board, currently including any directors to be appointed in connection with the Government’s Guarantee Scheme.

All the institutions may redeem the preference shares within 5 years at the issue price or after 5 years at 125% of the issue price. The preference shares are non-convertible and will be treated as core tier 1 capital by the Financial Regulator and are replaceable only with other core/equity tier 1 capital.
The capital injection for Anglo Irish Bank is likely to take place following an Extraordinary General Meeting in mid-January, and for Allied Irish Bank and Bank of Ireland, by the end of the first quarter of 2009.

The Government has a substantial pool of additional capital available to underwrite and otherwise support the issuance of core tier 1 capital by the relevant institutions.The Government need not be the principal source of this additional capital and encourages each institution to access private sources of capital. Nonetheless, the Government is prepared to underwrite further issuance of core tier 1 capital and both Allied Irish Banks plc and Bank of Ireland have indicated an interest in such an underwriting in an amount of up to €1 billion each.
The measures announced today have been designed having regarded to the recent European Commission Recapitalisation Communication and are subject to State aid approval....

Harney and Gormley seek a statement of clarification from Bertie Ahern on Mahon Tribunal evidence - no threat to the Government

Today PD Senator- and candidate for the party leadership- Fiona O’Malley called on Bertie Ahern to clarify his sworn testimony to the Mahon Tribunal. Her comments must be seen against the background of the PD leadership race. It is generally believed that Cllr Ciaran Cannon is ahead in the race. This was a nice stroke by O’Malley to garner soft publicity. In making the statement she had nothing to lose.

Later Mary Harney was asked by journalists to clarify her position on the issue. In a carefully crafted answer she agreed with O’Malley’s statement but referred to her good working relationship with Bertie Ahern. She was especially careful not to dump too heavily on the Taoiseach. She said she had confidence in all members of the cabinet. The PDs have signed on for the duration of this Government. They have no intention of withdrawing from the government. They are window dressing. This should not be too surprising as they come from the FF gene pool and have never supported any other major party in Government. A PD apologist speaking to Damian O’Reilly on RTE today waxed lyrical about Harney’s courage. A formula of words is not courage. Withdrawal from Government would indicate serious disquiet.

Green Party leader John Gormley has said Taoiseach Bertie Ahern should make a clarifying statement following the latest evidence at the Mahon Tribunal. Mr Gormley said such a statement would be in the best interest of the Taoiseach and the country at large and could be made at the Tribunal. Mr Ahern is not due to appear at the Tribunal for two months. Both Harney and Gormley were especially careful in their choice of words. Since the formation of this Government they have consistently stated that it is the tribunal's function to make judgements. Today’s comments from Gormley and Harney mark a change in emphasis designed to buy time and mollify party supporters. They mean little else. The PDs and Greens have no intention of withdrawing from Government.

Aspiring FF leadership candidate Dermot Ahern said that FF would look after its own business. That comment is open to several interpretations. Undoubtedly pressure on Bertie Ahern has begun to increase from within FF with several councillors expressing concern. The Taoiseach is due to address the Joint Houses of the US Congress on April 30th so a leadership heave appears unlikely within the next two months. One thing is certain. This Government will remain in power for the next four years. The PDs and the Greens have the political clout of a butterfly.

Statement by Mike Huckabee in Response to Gov. Romney's Endorsement of Sen. McCain:

"I am seeking the Presidency because I care deeply about important issues facing America



—Life, Marriage, the Fair Tax, the Second Amendment, American Border Security and Sovereignty.

I am as committed to those issues as I ever was, and my campaigning around the country has convinced me that the majority of Republicans want me to continue to fight for these and other conservative causes. So I will.I know all about the rumors swirling around. That's why I just went on national news show this afternoon, to knock those rumors down. I am still in this race. As I have said all along, I am in this race until someone gets to 1,191 delegates. That has not happened yet, and so I will keep campaigning for the Republican nomination. Period. That’s my ironclad commitment to my supporters."

Burma-UN Security Council in a shameful abdication of responsibility

The UN Security Council has “strongly deplored” the use of violence by the military junta against peaceful pro-democracy demonstrators. In a compromise wishy-washy statement, the Council called for “genuine dialogue” between the Burmese junta and Opposition, including detained leader Aung San Suu Kyi. But the formula of words was much watered down from the one proposed by the United States, Britain and France after opposition from Russia and China. It reeks of insincerity.


According to the statement “The Security Council strongly deplores the use of violence against peaceful demonstrators in Burma.” The statement also emphasised “the importance of the early release of all political prisoners and remaining detainees”. The US and others endeavoured without success to include the word condemn in the statement and sought the immediate release of all political prisoners, including Aung San Suu Kyi. China and Russia refused to accept the word condemn so this was replaced in the statement with the words “strongly deplore”. A reference to “immediate release” of political prisoners was dropped.


The milk and watery statement is a graphic illustration of the relative powerlessness of the UN Security Council. It could not even condemn the slaughter and brutality in Burma. Russia and China have combined to protect the butchers of Rangoon. The junta can continue the crack down on the pro democracy group happy in the knowledge that its worst excesses will go unpunished in the short term. The UN is a toothless tiger. It is a waste of tax payers money. Russia and China continually abuse the veto at the UN and allow war criminals in Burma and Darfur to murder and torture with impunity.