Ireland: Anglo aid is affordable

IRELAND’S bailout of Anglo Irish Bank, a key factor behind the country’s soaring budget deficit, is “costly but manageable,” the head of its central bank said yesterday.

Patrick Honohan, who is also on the ECB’s governing council, said the total cost of bailouts of all Ireland’s banks and financial institutions would be around 20 per cent of GDP.

Honohan said last week the net cost of the recapitalisation would reach 15 to 16 per cent of GDP, though the final bill would depend on the price Anglo got on sales of loans to Ireland’s bad bank.