Toxic bank threatens to drag down whole country

The figure of €35 billion is an awful lot of money. That is how much independent analysts estimate it will cost to complete the bailout of Anglo Irish bank. If you took that €35 billion in €5 notes and laid them end to end, the line would stretch around the earth 21 times. That's a lot of €5 notes. That's why there seems to be a touch of 'Comical Ali' about the Government's response to ever more distressing figures about the state of our economy - swearing blind that there were no American tanks in Baghdad, even as camera crews filmed them over his shoulder sweeping unchallenged into the heart of the Iraqi capital. Well, in the last few weeks, the Irish people have seen a few recessionary tanks parked on their lawns and it isn't doing them any good to have Brian Lenihan insist, for about the fifth time now, that a corner has been turned, stabilisation is happening and we're through the worst. We're not. That's the simple, miserable fact of the matter. Unemployment is up to 13.8 per cent and still rising. That translates to 455,000 people on the live register, 12,348 of those are from Meath. A massive number. Other indicators, in the past week alone, confirm the same thing. Huge numbers are now in serious arrears with their mortgage - 36,000 and rising fast. With mortgage interest rates shooting up, that number will continue to rise, while on the high street, consumer spending has started to slow again over the summer months. It's not by chance that the Financial Times in London wrote on Thursday that Irish banks remain on "life support" and that Anglo was "still the rotting corpse in the disaster zone of Irish banking". The day before, the New York Times asked in a headline: "Can one bank bring down a country?" when considering the impact of the Anglo bailout. And that is the correct question. At the moment, Anglo is threatening to do just that; drag down the whole country. With independent estimates of the final cost to the taxpayer of €35,000 million, it is acting like a monstrous lead weight around the Irish economy, dragging us ever deeper in to an economic mire. It's hard to get our heads around just how much money this is. That's more money than we will collect in all taxes this year. It's twice what we will spend on health services this year and, if we could use that amount in a stimulus package, it would boost the economy and put tens of thousands back to work. The cost of the Anglo Irish rescue is an astonishing cost for us all to bear, but, because of the choices made by Brian Cowen and Brian Lenihan, that is exactly what we face as a nation. Those choices are turning a recession in to a depression with workers, families and the elderly all bearing the brunt of the pain. One example of the choices made illustrates this reality. Over the next four years, the Government will cut €18 billion from our capital budget while at the same time pumping more than €22 billion to date into Anglo. Instead of pouring money into useful job creating capital programmes like new infrastructure, new schools or new health care facilities, our money is going in to the black pit of Anglo. What a sickening waste. The question now is where to next and can anything be done to protect the taxpayer even at this late stage? I believe a couple of key things need to happen now as a matter of urgency. Minister Lenihan must now give a definitive figure for the cost of saving Anglo Irish. Taxpayers have a right to know and the information is essential to lower interest rates in the bond markets. He may not be able to give a figure to the nearest euro but, at this point, I'd accept his estimate to the nearest billion euro. Minister Lenihan must also abandon his misguided policy of bailing out Anglo Irish, no matter what the cost, and adopt the Fine Gael policy outlined 20 months ago in Carton House, Maynooth. We called for Anglo Irish Bank to be wound down in an orderly manner over five to seven years, thus forcing professional investors to share the burden of Anglo's losses. Billions of euros have already been wasted on the bank, but Fine Gael believes up to €6 billion of taxpayers' money could still be saved if Minister Lenihan began an orderly wind-down of Anglo Irish. If he doesn't pursue this course of action, then Anglo will continue to drag us down. Borrowing costs will rise, capital spending will be cut while billions are poured into a zombie bank, our banking system will remain dysfunctional and all of that means that our economy will not recover and our jobless numbers will continue to rise. Our economy can't afford Anglo. Our people can't afford Fianna Fáil. Both need to go. Michael Noonan is Fine Gael's frontbench finance spokesperson.