Ireland reveals full horror of banking crisis

Posted 1 hour 24 minutes ago
The Irish government looks set to ramp up the bailouts of two major banks, Anglo Irish and Allied Irish, which almost went to the wall when Ireland's property bubble burst.
Taxpayers are being left with the bill and deeper austerity measures, but the government says the banks are too big to fail.
Overnight taxpayers learnt they will be shouldering an even bigger burden to bail out the Anglo Irish Bank - to the tune of $41 billion.
"The banks have actually got us into this mess. They should actually get us out," one person said.
"It is too shocking when you see people still on the side of the road homeless and yet there were these people smoking their big cigars and yachts out in the Mediterranean," another said.
With unemployment at a record high of 14 per cent, Macdara Doyle, from the Irish Congress of Trade Unions, says citizens cannot afford the bailout bill.
"We started out at this place two years ago with what we were told was the cheapest bank guarantee or bank rescue scheme in the world," Mr Doyle said.
"[It] then went to $4 billion. It is now at about $29 billion or $34 billion depending on what scenario you believe. It is not working. It is killing the economy."
Irish finance minister Brian Lenihan says he understands the country's frustration, but says this should draw a line under the taxpayer's liability.
"The Irish people are entitled to be angry with the bankers who lent recklessly over a considerable period of time in the earlier part of this decade," Mr Lenihan said.
Irish government borrowing was heading to 12 per cent of its annual economic output.
This will now treble; a third of the Irish economy will now go towards supporting its banks.
Independent Irish senator Shane Ross says the astronomical costs will be reflected in the November budget, which was already set for cuts in public expenditure of $4 billion and tax hikes.
"I think we're probably going to have a property tax, which is totally an anathema to the Irish psyche. We'll probably also have a tax on water," he said.
Senator Ross says the Irish have to accept the party is over.
"We had a binge for so long that we are suffering from the hangover.
"We've had maybe a feeling of guilt and that we weren't doing too well that this was a bit of a false boom, so I think we have been very, very passive in accepting the last cuts."
Business editor David Murphy from Irish broadcaster RTE says Irish taxpayers are sceptical that pouring more money into the Anglo Irish Bank bailout is a smart move.
He says, however, there has been a heartening reaction on the international financial markets.
"The bond markets who wanted to charge the Irish government almost 7 per cent for borrowing money earlier this week, they've relaxed a little bit," he said.
Borrowing woes are also being felt by Spain, with a major ratings agency downgrading its triple-A credit rating overnight.
The one-notch drop is in anticipation of the Spanish government pushing through more radical spending reductions and is another reminder to markets that all the anxieties about the eurozone's financial instability are far from eased.

http://www.abc.net.au/news/stories/2010/10/01/3026943.htm?section=business