IRISH BANKING CRISIS! – Helping to undermine the euro

Irish workers march through Dublin against the cost of bailing out the banks
Irish workers march through Dublin against the cost of bailing out the banks

A FRESH banking crisis is developing, with the credit ratings agency Moody’s reducing the Anglo-Irish bank’s debts to just above junk status.

It is estimated that the cost of rescuing Anglo Irish or writing off its debts by the irish government will be at least £35 billion.

At the same time Bank of Ireland revealed that it has lost more than £35 million on just one property company, McDaid Developments Ireland.

The continuing crisis of the Irish banks sent the euro plummeting against the dollar.

Moody’s has slashed its ratings on Anglo-Irish’s ANGIB.UL lower-grade debt, rattling investors and angering Irish workers who are being made to pay the costs of a continuous bailing out of the banking system.

Moody’s cut the Anglo-Irish bank’s senior unsecured debt by three notches to Baa3 – just one notch above junk status – amid fears over the escalating cost of covering the bank’s losses.

There is now real fear in Frankfurt and brussels that the Irish government will default on its own debt repayments, effectively a declaration of state bankruptcy.

German business daily ‘Handelsblatt’ reported yesterday that the European Central Bank gave serious consideration to activating the eurozone’s bailout fund for Ireland, but in the end decided not to.

Irish Finance Minister Brian Lenihan has said it is unthinkable that Ireland will default on senior debt.

However, no such assurances have been given on ‘subordinated paper’, and this debt might face a ‘buy-back’ at cut prices.

There are fears that the ‘debt contagion’ is resurfacing and will once again crash the world banking system, this time with no limits to the fall, with governments running out of funds.

The situation faced by the United States and Japanese economies is also dire.

But in Europe there is real panic about the plight of the euro.

Yesterday morning the euro continued its fall after plunging to below $1.35 on Friday.

The Irish government will make an official announcement of the cost of bailing out the Anglo Irish bank this Friday.

Irish ministers yesterday rushed to deny that they had been locked in crisis talks all weekend about how to cushion the crushing blow of the real cost to the taxpayer of the bailout.

‘I don’t know where that came from,’ said a spokesman for Finance Minister Lenihan.

* Meanwhile direct action is beginning by the UK public against the British banks.

A Bournemouth branch of Barclays bank was bricked up by locals on Sunday, in an angry protest at the dire situation faced by small businesses unable to persuade the banks to give them loans.

Cameron Hope said he had been refused £240,000 in loans and getting credit was like ‘talking to a brick wall’ – so he built one in front of the bank’s front doors!

The wall of breeze blocks was topped off with a sign saying: ‘Robbed by the banks we own.’

He was joined by other local people who supported his stand.

Cameron Hope said: ‘Over the last year we’ve had different problems with the banks thinking things are getting better and better but they are not, they are getting worse.’

A Barclays spokesman said: ‘We are extremely disappointed that Mr Hope randomly chose a branch of Barclays Bank to stage his protest.’