Bank support not part of Budget, says Taoiseach

ANY FUTURE recapitalisation of Anglo Irish Bank and other financial institutions will be separate from the Budget, Taoiseach Brian Cowenhas told the Dáil.

He was responding to Fine Gael leader Enda Kenny, who asked if there would be "€6,000 million for the further recapitalisation of Anglo Irish Bank, which of itself will wipe out at one stroke the impact of all the cuts that are going to be presented by the Minister for Finance today".

During Leaders’ Questions, Mr Kenny said that borrowing for 2009 of €26 billion already “included a figure of €4 billion for Anglo Irish Bank. This is real money from the taxpayer’s pocket.”

But Mr Cowen said that the recapitalisation of Anglo Irish Bank “and the investments taxpayers have made in other covered institutions” were clearly separate “from the budgetary statement to be made to the House by the Minister today”.

Mr Kenny said: “This is not a separate issue. The monies being pumped into Anglo Irish Bank, €4,000 million this year, is real money from real taxpayers from their pockets.

“You cannot keep this separate in some separated entity as if it’s not real money affecting real people”.

He asked: “Do the Budget figures include a cost of what we’re told is of up to €6 billion to further bail out Anglo Irish Bank?”

The Taoiseach said: “Clearly any future recapitalisation that may be necessary in the future aren’t incorporated in any figures in the Budget today”.

Mr Kenny had suggested that the Budget Mr Lenihan was presenting “may well be the last”.

He said that “the big idea in this Budget appears to be from both Brians to create jobs by reducing the price of drink” and he asked “why is it the Government has not acted tough with banks? Can we not take it now that we would in conjunction with the European Commission and the European Central Bank wind down Anglo Irish Bank in an orderly fashion ... rather than pouring more money down that black hole”.

Mr Kenny said that this should be done “and not have real people pay real money out of their hard-earned taxes for people who have swanned around the world as if they own the place and ... can do what they like immune from any law and immune from any action of Government”.

Labour leader Eamon Gilmoresaid that "so far this year, €4 billion had been paid to Anglo Irish Bank, and €3.5 billion to Bank of Ireland and AIB respectively. And that's before we come to Nama."

He said that the Taoiseach “seems to think that the euro that is taken out of the pocket of families in the Budget later this evening is a different kind of euro to the euro that’s paid over to the banks.

“It’s not. It’s the same euro. It has a harp on one side and a little picture of Europe on the other side. And this idea that somehow it’s different kind of money is just misleading people.”

Mr Cowen said: “I don’t suggest for a moment that one euro is any different to another. I’m simply being asked a question as to whether any prospect of any future recapitalisation of banks are being incorporated into the budget statement today and the answer to that is no.”

He added: “The important point is that we need a functioning banking system to have a proper economy. That is a continuing challenge for Government.

“But the real issue for the country today is that we take the necessary steps to confirm both at home and abroad our capacity to manage our own affairs to take the decisions that are necessary to reduce costs in our economy.”