The Cheapest Bailout in Europe just got less cheap

The Tribune led with this in their business section yesterday – Anglo seek an additional €5.7bn if it is to resume lending to the ordinary public. This comes on top of the €4bn that has already been poured into the bank – a figure which we are looking to cut from our own budget this year through pay cuts, service cutbacks and shrinking public programmes.

It is interesting that our fabled ‘cheapest bailout in Europe’ circa nine months ago has become increasingly expensive as the costs of bailing out Anglo and subsidising AIB and Bank of Ireland to placate the ECB’s refusal to let any other bank go bust in the Eurozone are set to be added to the cost of financing NAMA. Granted there are accounting trickery that lets people take these costs off balance sheet, as if the fact it isn’t there in cold black (or red) ink means we can merrily forget about it. The problem is that all of these outstanding black holes into which we are pouring our money have to be filled.

They must be filled even though the ECB is now looking at the orderly windown of Anglo Irish Bank – effectively asking us to fork out a few billion to stave off the inevitable and protect the Eurozone’s integrity.

As they say, he who pays the piper….