Nationalised Anglo Irish Bank will be "decommissioned", with a decision on its fate expected within a few weeks, a junior government minister was quoted on Saturday as saying. The comments by Conor Lenihan, a minister of state in charge of science, technology, innovation and natural resources, was the latest signal from the government that it was about to bow to growing political pressure to shut down the lender.
"It has to be decommissioned, it will be decommissioned - fairly swiftly in terms of the actual decision being made in a few weeks with the permission of Europe," Conor Lenihan, who is the brother and ruling party colleague of Finance Minister Brian Lenihan, told the Irish Independent newspaper. Investors see the escalating cost of rescuing Anglo Irish as a major threat to Ireland's creditworthiness and the next potential eurozone troublespot after Greece.
European Competition Commissioner Joaquin Almunia, who will have the final say on Anglo's fate, said he would meet Brian Lenihan in the coming days to discuss the matter. "There should be burden-sharing and without putting too much debt on Irish taxpayers," Almunia told a news conference in Italy.
Anglo's new management has proposed carving out a small functioning bank via a "good bank/bad bank" split but ministers have signalled a shift in policy towards an eventual wind-down. The government - with a wafer-thin parliamentary majority - will be hard-pressed to ignore public opinion, already aghast at having to shell out 25 billion euros for the bank's reckless property lending while facing yet another round of tax hikes and spending cuts in this December's budget.
Prime Minister Brian Cowen said on Friday that a swift wind up could cost 70 billion euros or more and would not be in the taxpayers' interest. "There has to be an orderly wind-down," Conor Lenihan said. "But it would be costly and dangerous to wind it down quickly."