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EU approves Irish cash input
Source: Agencies |
June 27, 2009, Saturday
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Print Edition
Print Edition
IRELAND won the European Union's approval yesterday to spend 4 billion euros (US$5.58 billion) to recapitalize troubled property lender Anglo Irish Bank Corp.
The EU's executive commission said they approved the cash injection because it was "required as a matter of urgency to preserve the financial stability of the bank" and maintain confidence in Irish financial markets.
The Irish government took over the bank in January as it lost massively on dud loans in Ireland's now-collapsed property market. It also gave the bank a 1.5 billion euro recapitalization last year.
EU regulators must check large state subsidies to ensure that they don't distort competition by giving one firm an unfair advantage over rivals.
The Irish government must draft a restructuring plan for the bank by the end of November for the EU to approve. This could require the bank to shed units and jobs to show that it can stay afloat without state help.
Anglo lost 3.8 billion euros in the six months ended March 31, citing widespread defaults in its loans to property developers. It expects to lose 7.5 billion euros on loans by September 2011.
The EU's executive commission said they approved the cash injection because it was "required as a matter of urgency to preserve the financial stability of the bank" and maintain confidence in Irish financial markets.
The Irish government took over the bank in January as it lost massively on dud loans in Ireland's now-collapsed property market. It also gave the bank a 1.5 billion euro recapitalization last year.
EU regulators must check large state subsidies to ensure that they don't distort competition by giving one firm an unfair advantage over rivals.
The Irish government must draft a restructuring plan for the bank by the end of November for the EU to approve. This could require the bank to shed units and jobs to show that it can stay afloat without state help.
Anglo lost 3.8 billion euros in the six months ended March 31, citing widespread defaults in its loans to property developers. It expects to lose 7.5 billion euros on loans by September 2011.
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