THE GREEN Party has changed its official policy position on Anglo Irish Bank and will now seek a “quicker wind-down” of the State-owned bank.
The party’s two Ministers, John Gormley and Eamon Ryan, are expected to tell Government colleagues at the Cabinet meeting on Wednesday that the Greens no longer support either of the options being proposed for Anglo Irish: a split into a good bank-bad bank; or the “orderly” wind-down of the institution.
A party source confirmed that the party has changed its stance and has adopted the position outlined by its finance spokesman Senator Dan Boyle in July that the bank be wound down in a shorter time than currently envisaged.
Mr Boyle has said that with the bank requiring €24 billion in State funding – and with no guarantee that the burden to the taxpayer would not rise further – there needed to be clarity and a definite decision on Anglo’s future.
Asked last night about the timing, he said it was not possible to be specific about the period, other than it would be shorter than the decade that is now envisaged.
“Under current policy, an orderly wind-down would take 10 years. The Greens believe it needs to be quicker than that. We are not saying, though, that it needs to be immediate,” he said.
The Greens’ change of policy comes as the bank prepares to report further substantial losses tomorrow – when Anglo publishes accounts for the first half of the year – and the need for further capital on top of the €14.3 billion already pledged to the bank.
Anglo had to take a writedown of €5.1 billion on €9.25 billion of loans, representing a discount of 55 per cent, sold in its first loan transfers to the National Asset Management Agency (Nama) in May.
The bank took a further write-down of €4.2 billion this month on €6.75 billion of loans sold in the second tranche of loan transfers to the State agency, representing a higher discount of 62 per cent.
The lower value assigned to Nama loans raised fears that the cost of Anglo could rise further.
While dismissing the recent estimate of ratings agency Standard Poor’s that the cost of Anglo could be €35 billion – €10 billion higher than the Government’s current estimate – Mr Boyle accepted that the final burden was unclear.
“We are talking about how long is a piece of string, or how deep is a hole? The Government policy was never going to be open-ended,” he said. Mr Boyle said the matter was likely to be discussed by Cabinet on Wednesday, as the bank was the “biggest draw on public resources”.
This was confirmed by a senior party source, who denied that the new position represented a reverse in policy on Anglo.
“The party has never been doctrinaire in its approach to this issue. The bottom line is that taxpayers’ money must be protected. We now believe their interest would be better served by a quicker wind-down,” said the source.
The official Government position is that it remains in talks with the European Commission and the European Central Bank on how to resolve the Anglo Irish crisis in a manner that will minimise the cost to the taxpayer.
The Department of Finance said two options were being explored - the proposal by Anglo management to split it into a good bank and bad bank, and the orderly wind-down that would take a decade.